The MP for the first college to go through the education administration process has urged ministers to amend the law so “reckless” leaders are publicly held to account.
Tonbridge MP Tom Tugendhat (pictured) also wants new safeguards to protect land for educational purposes if a college goes bust, instead of it being sold off to repay creditors.
He made the pleas during an adjournment debate in Parliament today about how the educational administration process could be improved following the Hadlow College scandal.
Hadlow became the first college to enter a newly designed education insolvency regime in 2019 and was shortly followed by its sister organisation West Kent and Ashford College after leaders racked up more than £100 million worth of debts amid a series of expansions and failed commercial ventures.
Hadlow College leaders requested a £20 million bailout but the Department for Education refused and placed it in administration.
Top DfE officials had previously revealed how the administration process cost the taxpayer around £60 million, with a “gut-wrenching” £6 million spent on administrators’ fees alone.
Hundreds of staff lost their jobs and thousands of students were moved to other colleges.
FE Week revealed in November 2023 that the principal at the helm at the time of Hadlow’s collapse, Paul Hannan, agreed to never work in the education sector again or face a £250,000 fine.
A deal was also made between the deputy principal, Mark Lumsdon-Taylor, and administrators BDO where Lumsdon-Taylor agreed to pay a four-figure sum as part of a confidentiality agreement.
Limited information about the action against Hadlow’s leaders was included in a BDO creditors’ report, which was published by Companies House.
Tugendhat described the situation as “financial mismanagement on a scale never seen before” in a college.
He said there “must be some accountability for those who made those decisions” that led to Hadlow College going bust, adding that it was “disappointing to many that those responsible for this expenditure have not seen their investigations conducted in the public domain”.
He told Parliament: “I find this part of the process extremely unsatisfactory. Tens of millions of pounds of public money has been poured into the educational administration process because of the reckless actions of these two senior leaders of Hadlow College at the time.
“I do not think that a confidentiality agreement is appropriate given the scale and profile this issue has, and I would urge the department to bring forward amendments to future legislation which increase the level of transparency and accountability on these matters.”
Responding for the DfE, minister Janet Daby pointed out that BDO’s action against Hannan and Lumsdon-Taylor “are publicly available at Companies House”.
She said: “In summary, they reach settlement agreements with the individuals involved. The department welcomed the conclusion of the joint liquidators’ investigations into the conduct of certain relevant individuals at Hadlow and West Kent and Ashford colleges, and the department takes the protection of public funds extremely seriously and will continue to support robust action where there are concerns around the safeguarding of taxpayers’ money.”
Tugendhat also used his speech to explain the “sadly deteriorated” offer at Hadlow College since the educational administration process, including the loss of the Hadlow College Farm Shop and Broadview Tea Rooms.
He said: “Its land holding has decreased. All of which enabled Hadlow College to be a sustainable provider prior to the reckless expansion plans pursued in the last decade. All now gone because of the need to pay back for failed business ventures.
“Put simply, what has happened here is a gamble with students’ education in order to expand beyond the core purpose of Hadlow College.”
In 2022, parcels of land around Hadlow were marketed for sale by Knight Frank on behalf of the administrators, with the proceeds used to repay creditors.
Tugendhat said he understood this rationale from a financial perspective, but pointed out this was not a standard administration process, “it was an ‘educational administration’”.
“There is broad agreement from all those now responsible for delivering further education at Hadlow – including North Kent College and Hadlow Rural Community School – that the sale of parcels of land has impacted the student offer right now. This is deeply regrettable,” he said.
The MP asked how the government “might be able to adapt the educational administration process to ensure land sales are not the default, especially for land-based educational establishments with this specialism”.
Just another example of how post 16 education in FE colleges and Sixth Form colleges is now a third or fourth priority of these establishments. Behind such as being a ‘business’ and ‘expanding their reach’. Priority one should be education, priority two adding value to the local community other than post 16 courses. Then worry about your business and expansion plans. Those establishments showing ‘success’ in a business model are normally the worst at supporting the majority of the local 16-19 population, and the worst employers for teachers and lecturers who want to help young people gain skills and an education.
The problem with Hadlow was the sheer scale of losses as a result of vanity projects. North Kent College has done a brilliant job under David Gleed and the governing body using their proven financial management to both stabilise and relaunch the college. The MP needs to realise that you will make losses and damage academic reputation if you offer courses that are not attracting students. For example a number of schools have small sixth forms that do not allow them to meet the subject offer wanted by their pupils, yet they struggle on. Having a college inspector with the right background in management as in FEFC days might help avoid future Hadlows and Westons