The troubled merger of two colleges in the Midlands has been given the nod of approval by Skills Minister Matthew Hancock, who had told them to take the plans back to the drawing board.

Proposals by Stourbridge and Birmingham Metropolitan to form “one of the largest and most significant further education providers in the country” were approved by governors last week.

They are now set to become one institution with the 12,500-student Stourbridge College dissolving and its property, rights and liabilities transferring to Birmingham Met, which had more than 26,000 learners two years ago.

But the proposals had been investigated by Mr Hancock’s officials at the Department for Business, Innovation and Skills (BIS) to “establish if appropriate processes have been followed”.

He wrote to David Beasley, clerk at Stourbridge College, saying: “I would request that the corporation review its processes and rectify any shortfall.”

However, a BIS spokesperson said there had been a constructive response to the letter and that the merger now had the minister’s blessing.

“Stourbridge Corporation has responded constructively to our concerns by demonstrating why it considers the merger to be the best option for learners, local employers and the community,” said the spokesperson.

“The corporation has now gone through the proper process and undertaken a college structure and prospects appraisal as set out in New Challenges, New Chances.

“We will continue to work with colleges in meeting expectations on the necessary steps when considering major changes like this to their delivery model.”

A spokesperson for the colleges said: “Both corporations have worked closely with BIS outlining the rationale for the merger and the many benefits it will bring to local learners, employers and the wider community.

“All the requirements have been met and we are now looking forward to delivering education and training to serve the needs of our communities.”

The merger plan was put out to a six-week formal consultation that ended on February 27.

It has been backed by the Birmingham Local Enterprise Partnership and, following the governors’ green light, is now set to be complete by June.

David Nolan, chair of Stourbridge College Corporation, said that the college’s governors unanimously supported the merger after considering the benefits it would create for learners, including greater choice of courses, improved facilities and enhanced connections to employers and the jobs market.

Vij Randeniya, chair of Birmingham Met, said that it was “delighted” to be merging with Stourbridge College which had a reputation for success and innovation.

“Working together will help both colleges respond to government’s priorities, particularly in light of the current economic climate and the need to develop the skills of our regional workforce.

“Our partnership will offer us the exciting prospect of developing our curriculum across our network of campuses, as well as delivering a host of new opportunities for both organisations to build on the quality and innovation they are already known for.”

A new audit system from the Skills Funding Agency has caused “major concern” within the FE sector.

Accountability reviews — described as “a key element of the agency’s intervention strategy” — will consider not just financial management, but also governance and strategic oversight arrangements.

The announcement, which sources have told FE Week came as a surprise to many in the sector, was accompanied by a 58-page guidance document on the agency website.

It is understood the reviews could be used to assess the progress of providers issued with notices of concern relating to finances.

But Paul Warner, Association of Employment and Learning Providers director of employment and skills, called for clarity on what action was needed from providers and whether audit would result in a straight pass or fail.

“We are unsure how these new guidelines fit with the existing Financial Health Guidelines which are applied to providers on the Register of Training Organisations [RTO],” he told FE Week.

“Does this new review override the existing guidelines and in particular the ratios submitted in an RTO application?”

He added: “The way that the audits are conducted will be crucial. While the guidelines themselves are generally acceptable, they cover a wide area and different auditors may reach different judgements on each aspect.

“If we have understood them correctly, they seem to suggest that if a provider is judged inadequate or ‘needs improvement’ in any part of the inspection, a straight fail will result and for us, this is a major concern.”

Agency guidance on the reviews says they will not be triggered by an Ofsted inspection, but will instead follow a risk-based schedule.

Key risks that would lead to a provider being flagged up on the schedule include “under-performance against allocations, key senior personnel changes or concerns and trends in success rates”.

Providers would be notified that an accountability review was coming three to four weeks in advance.

Julian Gravatt, assistant chief executive at the Association of Colleges, said the audit plan would be looked at soon.

“We discussed the agency’s plan to have targeted reviews to replace FMCE (Financial Management Control Evaluation) and we’re currently discussing the new BIS intervention arrangements and the College Finance Directors Group will be reviewing the detail of this document,” he said.

Each accountability review will examine management, including governance and strategic oversight, financial management and internal control arrangements.

The audit guidance added that reviews would not be undertaken at non-college providers with aggregate contracts under £10m.

An agency spokesperson said: “We would welcome comments from colleges and training organisations on how they could be further developed and refined in the future, particularly in respect of their scope, usefulness and content.”

Further education bosses have welcomed the appointment of Lord Lingfield (pictured) as chair of the group that will give out chartered status, a new quality indicator for the sector.

Skills Minister Matthew Hancock asked the Tory peer to take on the role as he had the “right background and expertise”, the Department for Business, Innovation and Skills (BIS) told FE Week.

Lord Lingfield will now put together a panel before the summer recess, in time for a formal launch in November.

Providers will put themselves forward for chartered status, which will be awarded for the first time in the early part of next year. If providers met certain criteria, such as showing strong leadership and management, and having excellent feedback from learners as well a programme of community activity endorsed by local enterprise partnerships, they could use the status in their titles.

A BIS spokesperson said: “Ministers want to put chartered status on a long term, independent footing as soon as possible and are appointing the chair and panel members directly.

“This is consistent with views expressed in response to a consultation on the matter.”

He added that the positions of chair and the rest of the panel would be unpaid.

Lord Lingfield sits on the EU sub committee for home affairs, health and education. He is also pro-chancellor of Brunel University, deputy lieutenant of Greater London and chairs a range of organisations, including the Centre for Education Management (now CEFM).

He previously served as director-general of St John Ambulance and chaired the Grant-Maintained Schools Centre throughout the 1990s.

Last year he wrote an independent review on professionalism in FE at the request of former Skills Minister John Hayes. His report explored how to “raise the status of further education professionals” and ultimately resulted in the creation of the FE Guild, currently being developed to set professional standards across the sector.

Lynne Sedgmore of the 157 Group, described the new chair as a “significant champion” of the “quality and excellence of colleges”.

She said: “We welcome the appointment. Lord Lingfield is someone who has spent time understanding and supporting the work of FE colleges and our sector.”

“He has already made a compelling case for greater professional autonomy for FE,” she added.

The Association of Colleges’ deputy chief executive, Gill Clipson, said the group “looked forward” to working with Lord Lingfield in developing chartered status for colleges.

“This work will build on his recommendations in last year’s report on professionalism within FE and, in this context, we will be interested to see how the charter will relate to his other recommendations concerning the establishment of a guild and the role of inspection within FE,” she said.

Providers have been invited to open days to find out about taking on the business of a struggling college being broken up following a failed merger.

Two events will be held at K College, in Kent, for organisations looking to take over its provision.

The possible break-up of provision comes after the college, which was formed of a merger between West Kent College and South Kent College in 2010, ran into debts of £6m and was issued with a notice of concern by the Skills Funding Agency.

The college’s new principal, Phil Frier, later conceded the merger hadn’t worked and proposed splitting the college in two.

He suggested one half should incorporate the Dover and Folkstone campuses, while the other comprised Ashford, Tonbridge and Tunbridge Wells.

The proposal was approved by Skills Minister Matthew Hancock after an independent review which took into account the needs of the area K College serves.

The agency said two open days had been organised for providers to find out more about taking on the college business. Two of the college’s five campuses will host the open days, with the first at the college’s Tonbridge site on May 22 before a second event at its Folkestone site the following day.

An agency spokesperson said: “Along with the Education Funding Agency, we are looking to commission education and training provision currently delivered by K College across its five campuses.

“This is an opportunity for interested parties to find out more about the commissioning process and attend a Q&A session.”

They added: “The Higher Education Funding Council for England will also be inviting tenders for the College’s higher education provision.”

The college is still recruiting for the next academic year, starting in September and will continue to offer courses offered in line with the college plan until July next year, subject to learner numbers.

A prospectus providing more information about the college’s provision would be published before the open days.

Email kopenday@skillsfundingagency.bis.gov.uk for more details.

The post of Skills Funding Agency advisory board chair is up for grabs.

The agency, which manages an annual budget of more than £3bn, is advertising the three-year unpaid job on its website and is expecting the successful candidate to be in place in around two months’ time.

They will head a board made up of representatives from the FE sector, employers and other stakeholder groups, including Association of Colleges chief executive Martin Doel and NUS president-elect Toni Pearce.

The agency wanted someone with “ideas for reducing bureaucracy” and “better and more simplified ways of implementing programmes”.

The job specification reads: “It [the board] provides independent support and challenge on both the business operations of the agency and on the delivery of its priorities and performance, acting as both a sounding board and source of expert advice, drawing on the particular roles, knowledge and expertise of its members.

“In particular, the board provides practical advice and guidance, as well as challenge to [the agency’s] chief executive on how best to deliver those FE and skills priorities set for the agency by the Secretary of State, including the interpretation of those priorities for particular groups, and on issues such as the impact and implementation of operational procedures on learners, providers and employers.

“The chief executive of the agency is responsible for all individual allocation decisions and for dispensing funding to the sector.

“The board does not have a role in this, nor holding the chief executive or the agency to account for its performance.

“However, the board and chair will be expected to provide feedback to the Department [for Business, Innovation and Skills] and Ministers on the performance of the chief executive and agency.”

The chair could ask to stay in the job for a further three years, but staying on beyond six years would be “exceptional”.

They can expect to be going to around five board meetings a year, and would have to pencil in a further five days over the year for other tasks and functions relating to the post, for which expenses are paid.

Previous board meetings have been chaired by the agency chief executive and also board members, such as Construction Skills chief executive Mark Farrar.

“This is an exciting and rewarding opportunity to be part of a dynamic and fast moving organisation, leading and working collaboratively with a board of high profile figures from across business and the education and training sector,” according to the job specification.

Visit the agency website for more details and for information on how to apply before the deadline of midnight Sunday, May 19.

Two Midland colleges are set to merge less than two months after Skills Minister Matthew Hancock told them to go back to the drawing board with the plans.

Proposals by Stourbridge and Birmingham Metropolitan to form “one of the largest and most significant further education providers in the country” have been okayed by governors.

They are now set to become one institution with the 12,500-student Stourbridge College dissolving and its property, rights and liabilities transferring to Birmingham Met, which, two years ago, had more than 26,000 learners.

David Nolan, chair of Stourbridge College Corporation, said: “The board of governors at Stourbridge College has unanimously voted in favour of merger after considering the wide range of benefits this would create for our learners, including greater choice of courses, improved facilities and enhanced connections to employers and the jobs market.”

The merger idea was put out to a six-week formal consultation which ended on Wednesday, February 27.

But the proposals were later investigated by Mr Hancock’s officials at the Department for Business, Innovation and Skills (BIS) to “establish if appropriate processes have been followed”.

He wrote to David Beasley, clerk at Stourbridge College, saying: “I am not convinced by the rationale set out in your consultation document that this would represent the best outcomes for learners in your local area.

“Nor does your consultation document provide assurance to me that the corporation has undertaken the open and transparent processes that we would expect in terms of analysing needs, engaging with stakeholders and, critically, securing the most effective partnerships and delivery option(s) for the future.”

He added: “I would request that the corporation review its processes and rectify any shortfall, including seeking potential partners through open and inclusive processes.”

However, the merger — backed by the Birmingham Local Enterprise Partnership — is set to be complete as of June.

Vij Randeniya, chair of Birmingham Met, said: “We are delighted to be merging with Stourbridge College who have a long established reputation for success and innovation.

“Working together will help both colleges respond to government’s priorities, particularly in light of the current economic climate and the need to develop the skills of our regional workforce.

“Our partnership will offer us the exciting prospect of developing our curriculum across our network of campuses, as well as delivering a host of new opportunities for both organisations to build on the quality and innovation they are already known for.

“We are keen to support the work of the Black Country and Greater Birmingham Local Enterprise Partnerships to deliver economic growth and local community regeneration.”