‘Deteriorated’ finances on the mend at large adult education college, FE Commissioner finds

Fee income dropped by 27% from £10.1m prior to the pandemic to £7.4m in 2020/21

Fee income dropped by 27% from £10.1m prior to the pandemic to £7.4m in 2020/21

14 Mar 2022, 13:09

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A well-known adult education charity has insisted it is on the road to recovery after the FE Commissioner warned of deteriorating finances caused by the Covid-19 pandemic.

The City Literary Institute said it was the first-ever college to produce more than half of its income through enrolment fees in 2018/19 – a feat which was short lived when multiple lockdowns caused a significant reduction.

The charity, which is the largest provider of community learning in Europe, saw its fee income drop by 27 per cent, falling from £10.1 million prior to the pandemic to £7.4 million in 2020/21.

As a result, City Lit has today received a financial notice to improve from the Education and Skills Funding Agency due to ‘inadequate’ finances.

In a report also published today, the FE Commissioner said in its team’s opinion, the college’s financial recovery plan is based on “sound analysis” which will see fee income recover to pre-pandemic levels of around 30,000 enrolments by 2023/24.

The report also points out that City Lit has no long-term debt and is asset rich because it owns its main campus in London’s Covent Garden, meaning the college is “not insolvent”.

Speaking to FE Week, City Lit’s principal Mark Malcomson said his college is “far from” becoming financially unviable and insisted that “things are slowly getting better” for both daytime and evening courses.

He explained that his provider’s 5,000-odd courses were all delivered face-to-face prior to the pandemic and the switch to online learning was impossible for some areas, particularly practical subjects such as performing arts.

But around 1,300 courses were successfully transferred online, predominantly provision for languages, humanities, creative writing, wellbeing and even music, once the pandemic struck.

Successive lockdowns continued to disrupt enrolments and led to some tough decisions around restricting staff and provision. Malcomson said his staff base has fallen by between 10 and 15 per cent since the pandemic, while an external “interpreting service” function offered by the college has had to close.

The FE Commissioner’s report is however full of praise for governance and leadership at City Lit. It said: “City Lit has been proactive and flexible in adapting its curriculum offer and delivery in response to the COVID-19 pandemic restrictions and challenges that have predominated since March 2020.

“The college has remained firmly committed to promoting and maintaining the engagement and participation of its learners, with the rapid development of online learning providing a viable alternative to face-to-face delivery for many programmes.”

The report also applauded the college’s quality of provision, giving the example that achievement outcomes on accredited programmes “improved substantially” in 2020/21, with “further improvements” likely in 2021/22.

Today’s report makes clear that the impact on fee income through the pandemic has been the “primary factor” in the “deterioration of the college finances”, which has reported two years of “significant operating deficits and are likely to see a third year of this in 2021/22”.

Malcomson said he was “proud” of the way his college has responded to the unprecedented challenge of the pandemic and is “happy” with the “supportive” approach taken by the ESFA and FE Commissioner.

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  1. “The City Literary Institute said it was the first-ever college to produce more than half of its income through enrolment fees in 2018/19 – a feat which was short lived when multiple lockdowns caused a significant reduction.”

    Firstly, City Lit isn’t a College. Plenty of other non College providers out there who get Gov funding and also have more than 50% income from fees.

    Secondly, If you look back through their accounts on Companies House, they have been reporting income from fees as being more than 50% of income since at least 13/14 (I didn’t bother to go back further).

    So why do they want to portray that they were the first ‘college’ to achieve this feat in 18/19…?

    When area reviews were a thing, this type of provider distanced itself from Colleges to protect their independence. Now, with Colleges being the favoured provider type, they want to be considered a College again!

    • The Lit is a college under the legislation at the end of the ILEA. Under the ILEA, and its predecessor the LCC,it was described as an Institute, the word used across London for all AE institutions post WW1. However, under the Department of Education’s 7/70 directive re Governance it was seen as a college. Indeed earlier than this, post WW2, it was designated as a ‘major institution’, along with its sister college in Manchester.
      It remains vitally important to present the history of adult education accurately.
      May I add, on a personal note, how much I deplore, and have deplored for over 50 years, attacks on Adult Education from other educational sectors. This undermines arguments for proper levels of funding for Education as a whole from Nursery to Postgraduate.

  2. Zin Keat Lee

    City Lit is a fantastic college, and it’s great to see that it is recovering from the pandemic. I’ve done many courses at City Lit and they are amazing.

  3. The impact of Covid on FE and HE institutions generally has been devastating. It has been impressive to see how City Lit have pivoted and adjusted to these long periods of uncertainty. While the decline in fee income had a marked effect on the finances of almost every FE and HE institution in the country, the ability of City Lit to adjust course offerings, quickly move large parts of teaching online, and still maintain such high level of quality and satifaction amongst their students is a tribute to the College’s excellent management and strong governance. It’s good to see them on the road back to financial strength as well – underpinned by solid foundations. I look forward to seeing their future successes.