The new interim chief executive at Hull College Group has launched an investigation after FE Week revealed the organisation had signed a £240,000 three-year rugby stadium naming sponsorship deal.
The cost of the deal signed in July 2019 with Hull Kingston Rovers came to light after the college fought and lost a year-long freedom of information request to keep it secret.
The rugby club stadium was renamed Hull College Craven Park at a widely publicised ceremony in August 2019.
Lowell Williams, who recently joined the college as the fourth interim chief executive, has told FE Week there “may have been a breach of the college’s financial regulations when senior management at the time entered into the contract”.
Quizzed on whether the sizable deal was signed without the college chair and other board members knowing, as well as whether any spending rules had been broken, Williams said: “My view is that a contract of £240,000 plus VAT did indeed require board approval. I have asked for a legal opinion on this matter.
“There is no record of management bringing to the attention of the board the full value of the contract.”
Hull College Group is supposed to be carefully watched by the government as part of a formal FE Commissioner ‘intervention’ process following a well-reported £50 million bailout in 2018.
Government ‘fresh start’ budgets are meant to be carefully scrutinised and an observer from the Education and Skills Funding Agency attends board meetings. Several board meetings at Hull College have also be attended by the deputy FE Commissioner.
The college marketing budget has been a concern for the government since FE Week first revealed in October 2019 that thousands was spent by the husband of the then-chief executive of the college to hire the 80-piece Hull Philharmonic Orchestra to play computer-game music at the Hull City Hall in June 2019.
The FE Commissioner undertook an “analysis of marketing expenditure” in November 2019 and found more than £1 million was spent in a single year.
The draft report leaked to FE Week said: “2018/19 actual marketing expenditure was £1.077 million compared with a budget of £0.938 million.”
The final report published nearly a year later in October 2020 omitted the expenditure figures and this week the government declined to comment on when they were made aware of the Hull Kingston Rovers contract or value.
Williams said: “The contract with Hull Kingston Rovers was listed in a paper on college’s global marketing spend in a paper to the board on 18 December 2019 [four months after it was signed], but only at its in-year value without VAT with no reference to the three years.
“The paper was then deferred at the meeting and was considered at the following meeting on 29th January 2020.”
In addition, Williams admitted he was “concerned senior managers at the time did not make best use of legal advice they had obtained when negotiating the contract”, adding that “the college welcomes our educational partnership with HKR but I would not have recommended to the corporation entering into a contract of this value and nature in July 2019, if I had been in post.”
Hull Kingston Rovers declined to comment on all questions put to them concerning the stadium naming and educational partnership with Hull College Group.
It is understood that the FE Commissioner and his team is due into the college tomorrow (22 January).
When asked what action the FE Commissioner would take the DfE spokesperson said: “The ESFA and FE Commissioner’s team continue to work with Hull College through the formal intervention process.
“As an independent body the college has responsibility to decide how its marketing budget is spent. The department is clear that college leaders must treat taxpayers’ money in a way that benefits their students and represents value for money.”
In an email to all staff on Tuesday afternoon, seen by FE Week, Williams said the vice principal for learner experience and business development, who had worked at the college for two years and is responsible for the marketing department, had resigned to take up a job at Hull Kingston Rovers.