Colleges have been given weeks to submit information on their borrowing and financing arrangements following the launch of a review which could see them brought back into the public sector.
The Education and Skills Funding Agency today asked colleges for “immediate assistance” to provide a debt return – including a consent letter that will allow the ESFA to contact their primary lenders to discuss college debt. This is required in just over a week’s time, by June 14.
They must also send details of all college borrowing and financing arrangements as of May 31, 2022 and also details of future financing needs. This is required by June 24.
The request follows a recent announcement by the Office for National Statistics (ONS) that classification of colleges in England will be reviewed and potentially changed from private to public sector.
The Association of Colleges said that while the request is not part of the ONS review itself, it is likely to be part of the ESFA’s preparation for discussions with the Treasury which would need to happen if there is a reclassification.
“College leaders are pretty busy at the moment and will be providing 95 per cent of this information in the College Financial Forecast Returns which everyone has to send back on or before July 31, 2022,” Julian Gravatt, deputy chief executive of AoC told FE Week.
“We are asking officials to co-ordinate their information requests better and to honour the promise in last week’s ministerial letter to minimise bureaucracy.”
Documents requested by the EFSA
Colleges have been told by the EFSA that they must send consent letters for each of their primary lenders, which will allow the agency to contact the lender and discuss the college debt if needed.
This letter is only for primary lenders i.e. commercial lenders and local authorities (not finance lease lenders).
These consent letters have to be signed and submitted by June 14.
Colleges are also being asked to complete an excel template providing details of all college borrowing and financing arrangements as at May 31, 2022 and also details of future financing needs that are currently known.
Colleges have to go into granular detail on their borrowing – with the EFSA requesting information on institutions’ debts, working capital and other financing arrangements.
These excel templates must be submitted by June 24.
The EFSA said that if a college has any concerns about meeting the submission deadline, they should contact their region and providers team as soon as possible and prior to the submission deadline.
ONS review of the classification of colleges
The ONS announced on May 31 that further education colleges, sixth form college corporations and designated institutions are to be assessed and possibly reclassified.
Currently, colleges are classified as part of the private sector, a decision the OfS took in 2012.
The review is expected to conclude by September.
[UPDATE: Two days after this article was published the ESFA extended the deadline for colleges to sign and submit their consent letter. The new deadline date is June 24.]