A large West Midlands college group has been placed in financial intervention due to “serious cash flow pressures”.
Warwickshire College Group (WCG), whose 2022-23 accounts are nine months overdue for publication, said the intervention follows its “deficit budget” last year.
In a letter published on Friday, the Department for Education (DfE) issued the college with a financial notice to improve (FNTI) due to its ‘inadequate’ financial health rating, based on its financial plans, accounts and “serious cash flow problems”.
However, a spokesperson said the college group feels “confident” about returning to a better financial position by 2026.
The college group is responsible for about 13,000 students, including more than 2,000 apprentices, and has 1,300 staff across six colleges in Warwickshire and Worcestershire.
It’s made up of Evesham New College, Warwick Trident College, Rugby College, Royal Leamington Spa College, Moreton Morell College and Pershore College.
Under financial intervention rules in the DfE’s ‘college oversight: support and intervention’ policy, the college’s finances and management will now be assessed by the further education (FE) commissioner.
The DfE has asked the group to explore “further staff savings” for the next two years and carry out a “thorough review of curriculum areas” as part of an improvement plan to be agreed with the commissioner.
The intervention relates to failures of financial health and control in 2023-24, the DfE confirmed.
A WCG spokesperson told FE Week a “full review of business operations” was underway and student recruitment this year has been “strong.”
However they did not respond when asked whether WCG planned to reduce its staff size, stop offering some courses or had requested financial assistance from the DfE.
A rare delay in publishing its accounts, now nine months after the government’s contractual January 31 deadline, means little is known about the college’s current financial state. In April, the college said the DfE granted a filing extension until July this year.
FE Week understands the delay is partly due to a “funding assurance audit” started by external auditors Mazars last year.
Neither the college nor the DfE responded when asked for update on the delayed accounts or the findings of the external audit.
The college group’s 2021-22 accounts show it had a financial rating of ‘requires improvement’ due to a budgeted EBITDA as percentage of education specific income of 2.2 per cent for 2022-23 – falling short of the FE commissioner’s 6 per cent target.
It ran a deficit of £2.6 million on an annual income of £48 million and had outstanding commercial loans of £6.8 million.
The college group is currently run by CEO and principal Sara-Jane Watkins, who took over when Angela Joyce left to lead Capital City College Group in January this year. Last year, the college group won a High Court battle with its local council to sell its Malvern Hills College campus for non-educational purposes.
It’s such a shame FEW has to sensationalise everything, WCG’s financial pressures are well known (probably why they battled to sell Malvern). Didn’t the FEW founder advise the sector on how to ‘maximise funding’….. bit ironic!
Hi “Dottie” – We’ve not sensationalised anything. We’ve published directly from official reports and statements. If you’ve got an issue with the language the FE Commissioner or the college uses, I’m sure they’d love to hear from you. We reported on Malvern as you know, but our reporters can’t assume our diverse readership are constantly up to date with each sub-section of our sector. So while WCG’s finances might be well known to you, they probably aren’t to everybody. All the best.
Guess you believe that which means you can sleep at night! There is clear sensationalism at play here and probably why nobody believes the FEW view. Just remember while you are sending in your FOIs- you are taking management time away from staff and students – and its them that matter most. Such a shame that you don’t fly the flag for FE