Insolvency could have been avoided had the ESFA spotted Hadlow College’s crippling loans in 2017

24 May 2019, 10:30


This week the government published the FE Commissioner’s Hadlow College findings and recommendations, based on four visits in February.

The description of what they found in terms of both leadership and financial failure is shocking, but will come as little surprise to FE Week readers.

We have been following the saga since being first to report the departure of the man in the middle of the scandal, the deputy principal at the time, Mark Lumsdon-Taylor.

But the report also hints at a major failing on the part of the Education and Skills Funding Agency in terms of failing to implement their intervention regime.

The report reveals that had the ESFA looked at Hadlow College’s published accounts in December 2017 they would have seen the full extent of the multi-million-pound loans and graded them as being “inadequate” for financial health.

Had that happened, a referral as part of the formal ESFA intervention process would have been made to the FE Commissioner’s team.

It is likely the resulting review would have exposed the seriousness of the situation by mid-2018 and a successful application to the restructuring fund could have been made.

Instead, the financial crisis only came to light in January 2019 after the FE Commissioner was tipped off that the college had run out of cash and the finance director was about to quit.

By then, it was too late to apply to the restructuring fund and the new insolvency regime was being implemented.

So had ESFA staff, more than a year ago, correctly graded the college as “inadequate” for financial health then the administration and “perilous position” as described by skills minister Anne Milton may never have come about.

Milton has said that an independent review will now take place to consider whether the ESFA financial oversight regime is fit for purpose.

The DfE should also review whether a college should ever again be allowed to go without an Ofsted inspection for more than nine years.

Like an ESFA financial score, a visit from Ofsted inspectors following Hadlow College’s falling achievement rates could have triggered FE Commissioner intervention.

The DfE review findings will probably never be published, but keep an eye on the three administrators now taking ownership of the college’s affairs.

They have a legal duty to investigate relevant activities leading up to the court order and will hopefully report on the extent to which the financial failure was hidden from, or missed by, the ESFA.

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