Troubled Leicestershire college group finds merger partner

A Leicestershire college group in severe financial trouble has found a proposed merger partner to secure its future.

SMB College Group is consulting on a partnership with Loughborough College that is hoped to be finalised by August 2025.

SMB was handed a government warning notice last July after “serious cash flow pressures” came to light. FE Commissioner Shelagh Legrave later flagged an insolvency risk after governors “took their eye off the ball” and revealed the group was being propped up with emergency funding to the tune of £4.6 million.

Dawn Whitemore, chief executive of SMB College Group, said: “This strategic partnership marks an exciting step forward for both our colleges as we combine our strengths to enhance educational opportunities for our students and community.”

Corrie Harris, principal at Loughborough College, added: “This partnership represents a highly exciting proposition, promising significant benefits and opportunities for students, staff, and employers throughout Leicestershire. 

“We hope that it will be transformational, by delivering greater economic prosperity and by offering a larger number of students from across our region an outstanding experience.”

A spokesperson said that following the current consultation period, both organisations will create a joint merger steering group of governors to oversee the proposal and perform due diligence. The colleges will also need to secure final approval from the Department for Education.

The plans will “ensure a minimal amount of disruption for students who will continue to experience a high level of academic and pastoral support”, the spokesperson added.

The SMB Group was formed shortly before the Covid-19 pandemic in 2020 through the joining of Brooksby Melton College and Stephenson College. Quality at both colleges pre-merger was judged by Ofsted as ‘good’ and the financial health of the newly merged college was also good. The group is now rated ‘requires improvement’.

In a report published in January, Legrave said a downward trend in student numbers has continued since the merger and made a large dent in income.

There was also a “significant” increase in pay and non-pay costs in 2022/23, which resulted in a “substantial operating loss”.

Loughborough College is rated ‘good’ by Ofsted and is in a healthy financial position.