The Department for Education has this morning published eight intervention reports based on FE Commissioner visits that in some cases took place more than a year ago.
These are the first reports to be published since Gillian Keegan (pictured) was appointed as minister in March 2020.
The reports were accompanied by a letter from Keegan, many of which were dated 15 July 2020.
FE Week reported on 7 July 2020 the FE Commissioner, Richard Atkins, wrote to college bosses on June 16 to inform them that his team has recommenced its work on a virtual basis, following a Covid-19 related pause.
Summary and links to the reports and letters below.
Gateshead College
Further light has been shed on the cause of Gateshead Collegeâs shock ÂŁ6 million deficit in its newly-released FE Commissioner report.
In a report based on visits last December and January, Atkins writes the underpinning cause of the shortfall was âa failure by the board and the senior leaders at the college to address the very significant reduction in income that was the result of the loss of the European Social Fund (ESF) contractâ.
FE Week first reported last December that Gatesheadâs governors had called in independent investigators to explain why the deficit had come about. The principal and chair of governors both left during the ensuing controversy.
Large short-term contracts like ESF had provided a âsignificantâ financial contribution to the collegeâs bottom like, Atkins explained.
An otherwise âsuccessfulâ ESF project concluded in January, but the senior leaders reported there were âno significant financial concernsâ to the board, despite losing the ESF contract.
The commissioner found the college had in fact been in deficit for years, but this had been disguised by a misstatement of certain bills. Other factors behind the shortfall include âincorrectâ budgeting of around 40 per cent for subcontracting costs, which was a âmajorâ cause of the size of the deficit.
Keegan wrote that there had been “significant failures in leadership and governance have allowed for the serious deterioration of the collegeâs financial position”.
The college said that, since the visit, a structure and prospect appraisal has been completed and is awaiting sign off from ministers. One option being explored is a merger.
A spokesperson said: âOur focus remains on making sure that the good work to date continues and that we keep to the agreed targets in our recovery plan, including the appointment of a permanent principal, while delivering the very best education and training for our local community, strengthening financial health and maintaining the confidence of our stakeholders.â
Stoke-on-Trent College
The college received a ÂŁ20 million taxpayer bailout two years ago and was warned it faced âsignificant challengesâ following its FE Commissioner report, but said it is now on a âstrong trajectory of improvementâ.
Stoke-on-Trent narrowly avoided insolvency, according to the FE Commissionerâs assessment from March, and only escaped thanks to exceptional financial support between January 2016 and September 2017.
The college later received ÂŁ21.9 million from the Department for Educationâs restructuring facility in September 2018.
This all came after income declined by more than a third between 2004 and 2014, so commercial loans agreed at the start of that period were no longer affordable by the end.
Following the bailouts and redundancies for 5 per cent of its workforce, Stoke-on-Trent is now on track for âgoodâ financial health in the 2019-20 financial year.
A spokesperson said the college is âworking well to progress the recommendations of the FE Commissioner, despite the disruption of Covid-19â.
However, Atkins has warned the Education and Skills Funding Agency would be writing to Stoke-on-Trent to refresh its financial health notice to improve following his visit.
An âurgentâ investment in IT equipment was also recommended in the report, after students commented on its âpoorâ quality, and owing to the Covid-19 pandemic placing a much greater importance on online learning.
The college has said it has recruited for the vacant finance positions, and the curriculum job will be filled by the end of 2020, and made a âconsiderableâ investment in its IT facilities since the commissioner’s visit.
Skills minister Gillian Keegan, in a letter accompanying the report, said while “significant challenges remain, the college has adopted a positive approach towards implementing various improvement initiatives to address both historic and recent concerns”.
RNN Group
This college group suffered “serious decline” in enrolments, quality and financial health following multiple mergers, the FE commissioner reported.
RNN Group was created from a merger of Rotherham College of Arts and Technology (RCAT), and North Nottinghamshire College in February 2016. In February 2017, there was another merger with Dearne Valley College, on the recommendation of the Sheffield City Region Area Review, which the commissioner was involved with.
However, Atkins has now identified that the mergers led to a decline in finance and Ofsted grades â for RCAT â from âgoodâ to ârequires improvementâ.
Income had fallen âsteadilyâ, owing to fewer student enrolments. RNN part-financing its University Centre Rotherham had also âerodedâ its reserves, while higher education student recruitment was down.
There was also a âsteepâ reduction in 16 to 18-year-old student numbers since the merger, though that has largely stabilised in 2019-20.
Mergers had also created what Atkins called a âsubstantialâ college estate, stretching across south Yorkshire and north Nottinghamshire. He recommended a ârationalisationâ of the estate and the college has since removed all provision from one of its sites, Dinnington. It is looking at renting or selling some or all of the buildings and land.
At the time of the commissionerâs assessment last December, RNN had subcontracted out adult education budget provision to 22 subcontractors, seven for apprenticeships, and four for 16 to 18 study programmes. This level, the commissioner wrote, presented a âriskâ to RNN. The college said it now has just 11 subcontractors.
Atkins raised concerns about RNNâs governance during his assessment, including the lack of finance committee despite the âsignificant financial challengesâ, and the seven vacancies for independent governors, leaving the board âseverely depletedâ.
Principal Jason Scott said âsignificantâ progress has been made since then: âStrong governance is in place, and important progress has been made with financial recovery, quality improvement, rationalisation of surplus estate capacity and reduced staff costs.â
Hull College Group
FE Week was leaked a copy of Hull Collegeâs FE Commissioner report in January and revealed how it would show that leaders employed âclose family membersâ and created a culture where staff would not speak out for âfear of being exited at short noticeâ.
It came after this publication reported in December â a month after Atkinsâ visit â that Hullâs chief executive, Michelle Swithenbank, and vice principal for HR, Julie Milad, had been suspended and then quit.
The commissionerâs report published last week includes the same findings, such as âclerking arrangements have not been sufficiently independent from the executive and have fallen below acceptable standardsâ and âmany staff felt reluctant to voice their concerns to senior leaders because of a lack of trustâ.
Keegan wrote that she it was âclear that the college leadership has experienced significant turbulenceâ and that she was âconcerned with the weakness of governance arrangements onâ.
Derek OâToole took over as interim chief executive at Hull College at the end of 2019, and Atkinsâ follow-up visit over the summer said he had âalready made a positive impactâ.
A spokesperson for Hull College said the college has âmade rapid and effective progress against a report from a specific point in time nearly a year agoâ.
âThe college has not only completed all 11 recommendations detailed in the report at that time, but has focused on making many other improvements for our learners and staff to give the city a college it so richly deserves,â they added.
Birmingham Metropolitan College
BMet received a highly positive report from the FE Commissioner which skills minister Gillian Keegan said showed âremarkable improvementsâ since the group first entered formal intervention in 2015.Â
Principal Cliff Hall told FE Week, following the reportâs publication, that they have met all of the commissionerâs recommendations âdue to the hard work and dedication of staffâ.Â
This marks a rare upturn for the college, which has received three consecutive ârequires improvementâ ratings from Ofsted, and was said to be on the âbrink of insolvencyâ as late as last August.Â
The commissioner reported the chair, school âsuperheadâ Sir Dexter Hutt, appointed in January 2019, is âconfident and capable and has led a period of rapid and significant cultural change in partnership with the principalâ.Â
Staff, the commissioner wrote, have a âgreater level of confidenceâ in the future and are âcomplimentaryâ about Hall and his âclear, open and honest approachâ.Â
In a letter attached to the report dated July this year, Keegan said the report âdescribes the college as having made remarkable improvements, and it was clear governors and leaders âhave been working diligently and effectively to implement rigorous and focussed strategies for improvementâ.Â
Atkins, who assessed BMet in October 2019, also praised the âtimely mannerâ in which BMet responded to concerns from the community about the controversial removal of provision from its Stourbridge campus, as part of a structure and prospects appraisal (SPA) led by Atkinsâ team. Â
Coventry College
A lack of âclear post-merger strategyâ and ârobust scrutinyâ led to a âsubstantial deterioration of financial stabilityâ for this college, which almost went insolvent this year.
Henley College Coventry and City College Coventry merged to become Coventry College in August 2017. City College had achieved three ârequires improvementâ and two âinadequateâ ratings from full Ofsted inspections prior to merger.
The merged college was inspected for the first time in September 2019 and achieved a grade three.
Atkins visited in November 2019 and found that governors had allowed the college to âdriftâ since the merger without developing and directing a âclear post-merger strategy and harmonisation planâ.
âWhilst this work has gathered pace since January 2020, the financial and curriculum performance of the college has deteriorated, and its future is now challenging,â he added.
An âoverly optimisticâ merger plan was developed, which contained significant income growth that the college has not delivered. In 2019, the college finances âhave suffered from weak financial controls, poor strategic financial leadership, and a lack of strong governance challengeâ.
The report warns that Coventry College breached bank covenants during the year which made a ÂŁ10 million loan with Barclays liable by 1 August 2020. Atkins said if the college was not able to reclassify the loan, it would go insolvent. The college confirmed to FE Week it was able to secure an extension on the loan.
Keeganâs letter said that following the formation of Coventry College in 2017, the âlack of a clear post-merger strategy or robust scrutiny have contributed to the substantial deterioration of financial stability and curriculum performance, to the point that the college now faces a challenging futureâ.
Atkins revisited Coventry in September 2020 and said the collegeâs newly appointed principal, Carol Thomas, has made an âimmediate impact despite only being in post for a short timeâ.
A Coventry College spokesperson said: âIn the intervening six months [since the commissionerâs original visit], the college has worked hard to address the specific recommendations and all of those which had a September or earlier deadline have now been completed.
âThe FE Commissioner team has undertaken a âstocktakeâ visit during September 2020 and has recognised the significant progress made against their original set of recommendations.
âThe collegeâs financial accounts for 2019/20 will show a circa ÂŁ1 million improvement on the figures shown in the March FEC report, as a result of the implementation of its recovery plan.â
Highbury College
There has been a âsignificant step-change in openness and trustâ at the scandal-hit college where staff previously felt âundervaluedâ and âtoo scared to challengeâ, the FE Commissionerâs report said.
Atkins visited Highbury College in October 2019 after FE Week revealed how its long-standing principal, Stella Mbubaegbu, had spent ÂŁ150,000 on expenses in four years, which included one-off lavish items such as a ÂŁ434 pair of designer headphones and a lobster dinner.
The commissioner found that governance and leadership were âseriously dysfunctionalâ namely because the relationship and trust between the chair, Tim Mason, and principal had âbroken downâ.
Mason admitted that the board had ânot operated with sufficient scrutiny and challengeâ.
Atkins said he found a number of âsignificant leadership and managementâ issues, including the âvery highâ turnover of new staff in their first year, low staff morale, and an âexpressed lack of trust by staff in their leadersâ.
Staff that filled out an Investors in People survey also reported that âpeople are too scared to challenge or feel nothing will come of itâ.
Mbubaegbu, who joined in 2001 and officially retired in April 2020, actually left her position as accounting officer in December â a month before new interim principal Penny Wycherley and interim chair Martin Doel discovered Highbury was running out of cash and had to secure a ÂŁ1.5 million emergency bailout, as previously reported by FE Week.
In Atkinsâ follow-up visit over the summer he commended a new âpositive culture across the college with managers more empowered and engaged, and staff now working well togetherâ.
The report reads: âEffective leadership and communication from the interim principal/chief executive have improved staff morale and the culture of the college. The staff survey, and staff and trade union feedback, all reflect a significant step-change in openness and trust.â
Wycherley said: âStaff have shown real âblitz spiritâ throughout the pandemic and their passion and commitment for teaching has shone through.â
East Sussex College Group
The college was visited by Atkinsâ team in December 2019 during which he found various reasons for its âinadequateâ financial health: unstable and poor leadership; a downward trend in 16 to 18 recruitment; ÂŁ1.1 million government clawback relating to ineligible apprenticeship provision delivered by a former subcontractor at Sussex Coast College Hastings in 2011/12 and 2012/13; and inaccurate data reporting.
The college was also rapped for its âwholly inadequateâ preparations for T Levels that were set for rollout in September 2020 but presented a âhigh risk of failureâ, and concern over the âquantity of subcontracted activityâ.
Keeganâs letter said the collegeâs governance and leadership arrangements were âweak and unsuited to the size and complexity of the collegeâ.
âIt is clear from the report that current management structures have failed to provide clear strategic direction for the college and have not adequately addressed ongoing and emerging issues following merger,â she added.
Atkins made a follow-up visit in July and said the college has made âprogress despite the turbulent circumstances during which existing challenges, including financial ones, have been exacerbated by the Covid-19 pandemicâ.
Commenting this week on the report, an East Sussex College Group said they feel that the college has made âsignificant progress in resolving the financial leadership concerns via the appointment of an experienced turnaround chief financial officer and new finance director.
âAlongside a review of our financial processes and controls we anticipate a steady improvement in financial health, even in a Covid affected climate, in 2020/21.â
They added that the college has âsuccessfully launched our first three T Levelsâ, with 45 students engaging in the new qualifications, and have âreduced our reliance on subcontracted provisionâ.
The interim leadership team have been supported by national leaders in FE, and a new-look governing body is completing the recruitment process for a new chief executive this month.