A financially troubled Hampshire college can “remain independent” following an external review that reportedly found its budget blues are “in the past”.
Havant and South Downs College (HSDC) was placed in intervention in May this year after “serious cashflow pressures” emerged due to high staff costs, “delays” in the sale of land, and a fall in enrolments.
According to the college, a FE Commissioner-led strategic review concluded the college is “well-positioned” to continue operating independently without the need to merge with another institution.
An announcement released today said: “The process recognised that the college’s financial challenges are in the past and good progress has been made to resolve any issues. It was also recognised that teaching, learning and quality continue to be excellent at HSDC.”
An initial FE Commissioner’s assessment, published following the intervention, revealed that trust between governors and leaders had broken down after the scale of the deteriorating finances came “out of the blue”.
The Hampshire college originally predicted a £763,000 surplus for 2023-24, but ended the year £548,000 in deficit after “late identification” of expenditure. That year, it had an overall income of about £42 million, with staff costs of about 72 per cent of its turnover, above the FE Commissioner’s 65 per cent benchmark.
FE Commissioner Shelagh Legrave’s team found “inaccurate” financial reporting to governors and a “risky reliance” on future land-sale receipts to fund an “ambitious property strategy”.
Since the intervention, HSDC has implemented a large-scale redundancy programme of up to a third of its 1,000-strong workforce and principal and CEO Mike Gaston announced his retirement.
HSDC governors have now “formally endorsed” the FE Commissioner’s recommendation to remain stand alone, taking the view that this gives the college the “strongest platform” to serve learners and “contribute positively” to the local community.
Mike Gaston, principal and CEO said: “We recognise that this has been a particularly demanding period for all of our community, and we hope this announcement provides a sense of stability and reassurance as we move forward together.”
Gaston, who retires next month, said he has “complete confidence” in the college’s future and new leadership, which will take it “from strength to strength”.
HSDC is has a ‘good’ overall effectiveness grade from Ofsted and teaches about 6,500 students across its three campuses in Waterlooville, Havant and Alton.
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