Financial warning notice for UTC found to owe government £500k

A university technical college which was found to have owed the government over half a million pounds after it overestimated its pupil numbers has been served with a financial notice to improve because it failed to produce a balanced budget or submit its audited accounts on time.

UTC@Harbourside, a specialist marine engineering college in East Sussex, has been criticised for its “weak financial position” and “governance and oversight of financial management”, and had requested financial support from the Education and Skills Funding Agency.

Its trust has now been ordered to identify savings and create a recovery plan to show that no further funding will be needed after 2018-19, and demonstrate that it will be able to create a balanced budget by 2019-20.

The UTC was left owing the government £562,762 in pupil number adjustment funding after missing its recruitment targets last year.

The recovery plan must also include a full repayment of this money and any advances received by 2018-19.

The UTC has been told it must be able to demonstrate “pupil growth at a realistic rate supported by evidence such as local demographics or feeder school knowledge”. It must also submit its audited financial statements for 2016-17 and 2017-18 by the end of the year.

The ESFA has asked for minutes of each meeting of the trust and its subcommittees, monthly management accounts, cashflow forecasts and monthly pupil number forecasts.

“The trust is responsible for its own financial management, control and governance and is expected to take appropriate action to strengthen the weaknesses identified,” said the notice.

If the trust is unable to fulfil the requirements within the timescales, ESFA will “begin to consider and explore the contractual intervention options available”, which could include termination of its funding agreement.

The notice was sent to the UTC’s chair of governors Dianne Smith on March 16, and published by the DfE today.

UTCs around the country were left with a combined debt of over £11 million after missing recruitment targets last year. Three owed over £500,000: UTC@Harbourside, Derby Manufacturing UTC and Cambridge UTC (now known as Cambridge Academy for Science and Technology).

The UTC movement launched in 2011 with the backing of former Conservative education secretary Lord Baker.

These specialist technical education providers, which typically recruit learners aged 14 to 19, are seen by many as unwelcome competition to more established general FE and sixth-form colleges.

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  1. The Govt website that enables one to compares schools and colleges across the UK has info on many things, including details on the workforce, and student numbers.
    The average teaching salary, ft equivalent, is approx £55K, whereas the national average is quoted as £39K.
    (55-39 = £16K!)
    The current total number of students is approx 141. (Approx 25% capacity!).

    Does Lord Baker’s backing extend to finding the occasional £500,000 to ensure the sustainability of the UTCs that are facing financial challenges?

    I will leave others to draw their own conclusions.