A college in Yorkshire is to make over 100 staff redundant and its principal has branded the government “short-sighted” after their apprenticeship Covid provider relief application was rejected.
Bradford College, which almost went bust last year, is aiming to save £1.5 million through a restructure that involves winding down two of its subsidiary companies to “keep financially sustainable”.
After experiencing a “significant” £2 million fall in apprenticeship income since lockdown, leaders applied for supplier relief support from the Education and Skills Funding Agency to ease budget pressures, but their application was turned down last month as they had too much cash in the bank.
Principal Chris Webb has now hit out at the decision and told FE Week: “The ESFA are short-sighted in not supplying colleges with support into next year which will detrimentally impact on the recovery opportunity for apprenticeships. By this time next year it will be too late.”
A spokesperson added that they are “deeply saddened” to be in this position, “especially after the exceptional efforts by all our staff who went above and beyond expectations to ensure learning continued online and students remained supported” throughout the pandemic.
But there has been a “significant reduction in apprenticeship starts, which is further impacting the college’s income, and therefore we have no option but to reduce staffing costs in this area”.
“At present, 32 per cent of our apprentices are either redundant, furloughed or have been allowed to take breaks in learning which has result in the loss of funding for those apprentices,” the spokesperson added.
A total of 107 jobs are now to be lost.
University and College Union regional official Julie Kelley said she understands that Covid-19 has placed “additional pressures” on Bradford College but “this looks like a knee-jerk decision.”
The news comes a day after Association of Colleges boss David Hughes told MPs on the education select committee that college sector income, which currently totals around £7 billion annually, could fall by £2 billion next year as the “enormous impact” of Covid-19 bites.
He said the AoC had recently surveyed the 17 colleges that provide apprenticeships and they predicted a 50 per cent drop in starts next year, which would equate to a £30 million loss just to those 17.
Hughes added that government “must must must” do something to support them instead of offering “warm words”.
Bradford College said it hopes to mitigate its job losses by filling vacancies and identifying potentially new roles through their redundancy consultation.
Forty of the 107 losses are from the college’s apprenticeship provider, City Training Services, which will be closed after it made a £664,000 loss last year, according to its 2018/19 accounts. It had forecast that its revenue would drop by £200,000 each month from March 2020 due to the pandemic.
Bradford College’s other subsidiary to shut will be its recruitment firm Beacon Recruitment. Both services offered by the subsidiaries will be brought into the college.
The remaining 67 jobs to be lost are mostly in support departments in the college, such as admin, HR, finance, and student services. Class-based learning will mostly be unaffected.
The college’s spokesperson reiterated that apprenticeships are “particularly hard hit and, like other colleges across the country, we expect a further drop in income for the 20/21 academic year, causing further impact”.
They added that “unfortunately in six to 12 months when apprenticeship roles are needed to restart the economy we won’t have those staff in place”.
Last month FE Week revealed how the ESFA had rejected a third – 58 out of 165 – of provider applications to their supplier relief scheme, for apprenticeships and adult education budget funding, claiming they were unable to prove immediate “need”.
Asked to comment on Bradford’s rejection, the agency said their scheme reflected Cabinet Office guidance that there must be clear and consistent parameters when considering any request for supplier relief.
They added that any training provider that was unsuccessful in their bid was able to appeal if they believed their application had not been properly assessed.
This is the second time in two years that Bradford College has had to take drastic steps to survive.
In a rare move and as revealed by FE Week in 2019, officials from the Department for Education last year forced a major bank – Lloyds – to halve a £40 million unsecured loan after threatening to put Bradford College into insolvency.
The deal involved the college being given £12.9 million by the ESFA to pass on to the bank while the bank gifted an equal amount of £12.9 million to the college, in what they called “debt forgiveness”.
The college’s spokesperson said that in addition to mitigating the effects of Covid-19, the proposed restructure should “ensure that the college continues to meets it financial obligations to lenders and ensures we do not risk breaching our banking covenants following last year’s financial restructuring”.
Bradford’s 2018/19 accounts show the ESFA gave them an emergency grant of £4.866 million last year, following a £9.274 million bailout the year before.
The financial statements also show £2.8 million in redundancy costs that took place last year when more than 100 jobs were lost.
Commenting on the fresh round of staff cuts the college’s spokesperson said: “These proposals have been developed in order to make essential cost savings and create a sustainable financial platform for the future following the Covid-19 outbreak the government’s lockdown measures.”
They added that it is hoped that a “large number” of job losses will be made through voluntary redundancies and that compulsory redundancies are kept to a minimum.
UCU’s Julie Kelley criticised the “completely unrealistic” timeline of the consultation as the college told staff of the redundancies yesterday but “wants them axed a week later”.
“Bradford College needs to make sure it doesn’t put itself at risk of unfair dismissal claims and instead work with us to make the case for government funding to defend its academic capacity,” she added.