How DfE can better support colleges in crisis

3 Dec 2018, 5:02

As she leads her new institution to financial recovery, principal Karen Redhead reflects on what can help and hinder this difficult process

I took over at Ealing, Hammersmith and West London College in September, in the wake of a financial notice to improve from the Education and Skills Funding Agency, and an intervention from the FE commissioner, fully aware of the scale and extent of the issues faced by the college.

This is my initial insight into what it’s been like leading a college towards financial recovery, what is working and what could be done better.

The first stocktake visit from the commissioner’s team in October was thorough and purposeful. It genuinely gave me access to what felt like high-quality consultancy, coaching and mentoring that is vital in such a challenging scenario. It acknowledged that we’d done an overwhelming amount of work but that there was still much to do.

The process has been as burdensome as it has been supportive, and there’s a real danger of overwhelming a college that is by definition already weak. Deteriorating financial health is often the first sign to the outside world that all is not well. But that’s usually the tip of the iceberg.

The financial controls at West London College were certainly weak, but in addition, the college had no strategic plan, no costed curriculum plan, no workforce plan, a financial plan that was not fit for purpose, no estates strategy – despite having multiple and complex projects on the go – and the risk register hadn’t been updated since 2016.

Compounding this can be the difficulty in attracting senior leaders and board members. At one point we had vacancies in the post of chair, vice chair, clerk, deputy principal for curriculum and quality, director of finance and resources, and director of management information systems. I’m really pleased to have appointed some strong candidates to the executive team, but they don’t take up their posts until the new year.

The hoops the college has to jump through become the biggest barrier to improvement

We have to report to three separate agencies: the ESFA, because we’re under a financial notice to improve; the FE commissioner’s team, following their diagnostic assessment in July; and the transaction unit, because we’re in receipt of an exceptional financial support loan.

And perversely, what happens is that the hoops the college has to jump through, mainly in relation to the financial support loan, become the biggest barrier to improvement.

There’s simply not enough time to do the crucial development work with the finance department and senior team because they’re too busy providing data about the college’s weekly cash flow, in order to calculate the bare minimum loan payment we need each month.

We’re lacking some of the underpinning processes that would be taken for granted in a well-running college, and due to the onerous reporting requirements, the team doesn’t have time to set them up.

Data requests include items such as course-level costing. But if the college is still developing its curriculum plan and workforce plan, that information is not available. It can feel quite challenging when the various agencies are making demands for information for which the processes are not yet in place.

The power imbalance in this kind of situation leads to a temptation to acquiesce to administrative requests, in the interest of maintaining harmonious relationships, that under other circumstances I would question.

The three agencies are trying hard to minimise duplication of demands on the college. However more could be done to achieve this. Rather than the separate processes requiring different recovery plans, it would make more sense to combine these into one plan from the outset. It would also have helped to have access to a model recovery plan template that could be modified according to the circumstances.

More clarity about the new insolvency regime would also help. Asking a college in crisis mode to create its own specification for an independent business review, for example, is just one more unnecessary burden.

And finally, if we’re to avoid these situations in the first place, leaders must be encouraged to ask for help early – and this requires a radical rethink. If the only option is to trigger a formal process with high personal consequences, then of course leaders will be reticent.

We know very few people set out deliberately to do a bad job, so we need to think about how to create a no-blame, no-shame process.

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