Principal warns of ‘significant redundancies’ amid DfE intervention

Cashflow pressures bite at Hampshire college that will impact its 1,000-strong workforce

Cashflow pressures bite at Hampshire college that will impact its 1,000-strong workforce

A Hampshire college hit by “serious cashflow pressures” has warned of “substantial redundancies” after it was placed in government intervention.

Havant and South Downs College (HSDC) was deemed to have ‘inadequate’ financial health by the year ending July 2024 and its audited accounts warned of “material uncertainty”.

Financial statements show a £550,000 deficit, a negative EBITDA (earnings before interest, taxes, depreciation, and amortisation) and a high staff-to-turnover ratio of 72 per cent – 7 percentage points above the FE Commissioner’s benchmark.

“Ongoing delays in the sale of land” related to its South Downs campus are also to blame for the college’s poor financial position, as it has meant that HSDC has had to “finance a higher proportion of its capital programme from working capital”.

The college also saw a fall in 16-to-19 enrolments in September 2024, which will “present a further financial challenge” due to the government’s lagged funding model that will hit budgets in 2025-26.

The Department for Education published a “financial notice to improve” (FNTI) for the college today which triggered FE Commissioner intervention.

HSDC principal Mike Gaston warned that large numbers of the college’s 1,000-strong workforce are likely to lose their jobs as leaders try to balance the books.

He told FE Week: “While the challenges outlined in the FNTI are significant, they compel us to take decisive action, including a process of right-sizing that may, regrettably, involve a substantial number of redundancies. I want to be unequivocal; these decisions are never made lightly. 

“Our foremost priority is to stabilise the college to secure a sustainable future, ensuring that we continue to offer the high-quality education our students expect.”

According to HSDC’s accounts, the college self-assessed its financial health grade of ‘requires improvement’ for 2023-24, but this was moderated down to ‘inadequate’ by the government during a post-moderation process.

The FE Commissioner’s team will now conduct an “independent assessment of the college, and the capacity and capability of its leadership and management, and governing body to bring about the required changes and improvements”. The first visit was scheduled for May 1.

The FNTI said: “The Department for Education is issuing this financial notice to improve HSDC following the serious cashflow pressures facing the college and the confirmation of a post-moderated financial health grade of ‘inadequate’ for the year ending July 2024. This means that HSDC is now placed into formal intervention.”

The college’s accounts said leaders “recognise the importance” of addressing its high pay costs, tight control of non-pay costs and improving curriculum efficiency in order to improve EBITDA and help to lift the financial health score to at least ‘requires improvement’. 

HSDC is now working on achieving cost reductions of “at least £2 million by 2025-26 to help”.

Gaston said: “I acknowledge the personal and professional challenges and distress this restructuring presents to my colleagues. The notice to improve does not in any way relate to the quality of teaching at the college, nor does it relate to or impact the experience of our students. The goal now is to build a college for the future, one that is financially secure, operationally sustainable, and continues to provide meaningful employment within the community.”

The college has over 1,000 staff, around 6,500 students and was judged ‘good’ by Ofsted in July 2024.

HSDC was originally incorporated as The South Downs College before merging with Havant Sixth Form College in 2017, and then in 2019 the combined college merged with Alton Sixth Form College.

Latest education roles from

Chief Education Officer (Deputy CEO)

Chief Education Officer (Deputy CEO)

Romero Catholic Academy Trust

Director of Academy Finance and Operations

Director of Academy Finance and Operations

Ormiston Academies Trust

Principal & Chief Executive

Principal & Chief Executive

Truro & Penwith College

Group Director of Marketing, Communications & External Engagement

Group Director of Marketing, Communications & External Engagement

London & South East Education Group

Sponsored posts

Sponsored post

Supporting the UK’s Transport Decarbonisation Plan Through Skills

The UK Government’s Decarbonising Transport: A Better, Greener Britain strategy sets a legally binding path towards a net-zero transport...

Advertorial
Sponsored post

Project power: ASDAN expands its qualifications portfolio

From 2026, ASDAN’s planned Foundation and Higher Project Qualifications will sit alongside its Extended Project Qualification[CM1] , creating a complete...

Advertorial
ATAs

Spotlight on excellence: Nominations now open for the Apprenticeship & Training Awards 2026

Nominations are open for the 2026 Apprenticeship & Training Awards, celebrating outstanding employers and providers with national recognition, a...

FE Week Reporter
Sponsored post

Funding Adult Green Skills

New sources of funding are available to finance the delivery of green skills to all learners. Government policy is...

Tyler Palmer

More from this theme

Colleges

£31k FE teacher training bursaries to continue in 2026-27

Experts say bursaries are 'very effective for recruiting more teachers and retaining additional teachers long-term' amid Labour's 6.5k pledge

Billy Camden
Colleges

More than half of Turing trips turned down

The government also underspent its budget despite a one-third cut

Anviksha Patel
Colleges

UCU launches England-wide college strike ballot

The Association of Colleges says the union's 10 per cent pay rise demand is unaffordable

Josh Mellor
Colleges

CCC teachers begin strikes over sixth-form pay freeze

Their pay could be frozen for up to 3 years until a 'discrepancy' between their salaries and the rest...

Josh Mellor

Your thoughts

Leave a Reply