Leading college starts redundancy process after finding a shock £6m deficit

A high-profile college that uncovered a shock £6 million deficit when the finance director went on sick leave has put 26 jobs at risk and says it is considering an application for emergency funding.

Gateshead College has remained tight-lipped on how the shortfall came about. However, it has confirmed a new interim finance director was appointed last month and that the principal Judith Doyle CBE retired with immediate effect.

Deputy principal Chris Toon has taken over as acting principal of the grade one college.

“These proposals will help us address some short-term financial pressures”

He announced a redundancy consultation is underway today.

“Currently 26 posts are at risk, mainly from business support areas, however no final decisions will be made until consultation concludes,” Toon said. “We have opened a voluntary severance scheme to mitigate as far as possible the number of compulsory redundancies.

“These proposals will help us address some short-term financial pressures the college is facing at the moment.”

A team of independent forensic accountants was drafted in after the unexpected deficit was found “to establish the explanation” and its investigation will be completed by the end of January.

A spokesperson for Gateshead College said: “We appointed a highly experienced interim financial director just before the Christmas break and he and the executive team, supported by governors, are working on the college’s recovery plan.

“This includes options for short-term funding loans and we are in close dialogue with the ESFA while we assess what is required.

“Our absolute focus is on retaining the highest standards of teaching and learning while addressing the current financial situation.”

It was previously confirmed that a new three-year financial plan, which is hoped to return the college to a surplus by 2020-2021, is to be delivered with the support of the ESFA and FE Commissioner.

The college declined to comment on the details of the deficit until the investigation is concluded. Governing board minutes do not offer any mention or explanation of the shortfall.

Gateshead recorded a surplus of £748,000 in 2017-18, according to its latest accounts. They add that the financial objectives for 2018-19 had included achieving a surplus of £535,000 and continuing to improve the college’s financial health score to reach ‘outstanding’.

In the latest minutes from the college’s audit committee, which met on June 19, 2019, a number of items, including the risk-management plan presented by the finance director, were withheld as confidential.

There were also confidential items in the most recent meetings of the board of governors on July 4, 2019, such as the draft budget for 2019-20 presented by the finance director, and on October 10, 2019, including the principal’s strategic update.

Judith Doyle

Judith Doyle retired with immediate effect on December 31.

The college said she had previously informed the board of her intention to retire at the end of this academic year.

A spokesperson for Gateshead said the decision to bring this forward was “hers, in the belief that it was in the college’s best interests to step aside now, enabling the new three-year plan to be delivered by the team with the support of the ESFA and FE Commissioner”.

Prior to this, Doyle was the highest-paid principal in the country, receiving a salary of between £340,001 and £350,000 in 2017-18.

The college’s financial statements for the year ended July 31, 2018 also showed six other key management staff were paid between £110,001 and £190,000.

Doyle spent 33 years in the FE sector and was appointed principal of Gateshead in 2013, having previously held the position of deputy principal. She was one of seven principals to be chosen by the FE Commissioner to advise government officials on skills policy in 2018.

Gateshead received an ‘outstanding’ grade from Ofsted following a full inspection in July 2015.

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  1. So let’s get this right. A £6m deficit and the principal and board didn’t see cash was declining or creditors increasing !

    Incompetence at best but off to become an assistant to the commissioner I bet with her £100k pension and lump sum.

    Another ceo who can’t read a balance sheet or doesn’t feel the need to

    • Anthony Halford

      I completed a 4 week course last year at Gateshead college,the big claim is that the college has a 96% pass rate,10% better than any other college,this is very misleading,on my course everyone passed,including one poor man who had massive reading and writing problems.I think that the college gets funding on the so called results

  2. Yet another college leader rewarded very handsomely for incompetence. Yet another example of hard working teachers paying the price for mangers’ ineptitude. Yet another board of gullible, ineffective governors. Yet another indication than FE leadership is in a dire state. Perhaps a maximum wage would attract people with the interest of students at heart rather than lining their own pockets.

  3. John Andrew Hartley

    Is it any wonder education is struggling. Teacher stress and workload issues resulting in teacher shortages and at the same time college and school heads and principles wanting to play at being business CEO’s taking massive wages and pensions. The problem is they are failed managers would couldn’t make it in the real world and viewed education as a soft target for their career progression!

  4. Yet again staff pay for the cost of poor management. Senior leaders do not lead, but rather blame everyone else for their own shortcomings. An investigation should be held into the salaries, pensions and perks these people receive and it should look at the impact, a word they often abuse, that they have had on an organisation. There is a huge difference in pay and conditions where SMT are concerned in relation to the people that daily struggle to do their best in challenging and constantly changing environments.

  5. Jordan Steel

    The pass rates are very misleading for courses. I delivered the rail NVQ courses for this college. If you check the figures or call the learners you will find non of them in work. But yet the college will put down 80/90 in work!
    You will also find the college sub all the rail delivery out to company’s like Cidori
    McCrory’s and Redstone Training! Without any contracts in place! As long as the college got 49/51 % profit.
    These courses was just away of pumping money though no quality in anything they did!
    30/35 leaners in one small room! At 5k a head promoting work opportunities and giving them one shift and some not even that then been dropped. No one has enough work for you these lads!
    Getting paid by the college, was never paid on time, then paid by credit card to clear off there debts
    Shocking way to do business, don’t deliver courses if you have to sub it all out
    Rail courses really need investigation with this college

  6. Jordan steel

    We definitely all the Rail outcomes was. Hardly any leaners went into work.
    Paying agency’s who have a training arm to take them. Once the training is done we all know they get dumped only odd one will get the odd few shifts
    All the outcomes are % are incorrect