Wolverhampton college freed from intervention after 12 years

The college's financial health improved to 'good' after DfE agreed to take on part of a £10m debt

The college's financial health improved to 'good' after DfE agreed to take on part of a £10m debt

The sector’s longest-running “financial notice to improve” was withdrawn from City of Wolverhampton College last week after 12 years.

First issued in 2012, the notice raised concerns about “very weak” financial management practices including high “overall indebtedness”, low working capital and cash reserves, and repeated deficits.

It also came shortly after the college was judged ‘inadequate’ by Ofsted, in a report that warned its “weak financial position” was of “serious concern”.

But last week, the government confirmed that its financial intervention has ended after agreeing to help the college clear a £10.7 million debt to Barclays bank that dates from 2007.

The Department for Education has taken on £6.1 million of the debt, with the remainder to be paid off through the future sale of City of Wolverhampton College’s Paget Road base for housing.

A new £61 million campus home for the college – City Learning Quarter – is under construction. It will include City of Wolverhampton Council adult education services and a “modernised” central library.

The college’s 2022/23 accounts say it had a deficit of £931,000, down from £2.4 million the previous year, but a self-assessed financial health score of ‘good’.

College ‘delighted’ that financial intervention over

Principal Mal Cowgill said the college, which was judged ‘good’ by Ofsted last year, is “delighted” the financial notice has been lifted and praised his staff for developing financial systems and processes that reflect “best practice in the sector”.

He added: “Despite our financial challenges, we are proud that the quality of education we offer to our students and apprentices has never been compromised, and has been recognised by Ofsted.

“Our college now has a very bright future ahead as our campus transformation journey progresses.”

While construction has started at the City Learning Quarter, the college is also set to begin training thousands of students and apprentices at its new Advanced Technology and Automotive Centre from September this year.

Longest running intervention

The government’s 12-year financial intervention at City of Wolverhampton College was the longest-running in the country when it was closed last Friday.

Unlike when such notices are issued now, the government did not publish any explanation of why it took this step.

Of the 53 colleges issued with notices to improve since 2012, only two have lasted ten years or more. 

The DfE closed West Kent and Ashford College’s second longest-running notice of ten years in 2022.

In February, Hull College exited intervention after seven years, a £50 million government bailout, reductions in staff and closing one campus.

The DfE can issue notices to improve when it has concerns about a college’s financial health or teaching quality.

Following this, the FE Commissioner usually assesses the college within a few weeks and publishes an intervention report with recommendations on how to improve. 

Why in intervention for so long?

The FE Commissioner has published two assessment reports into City of Wolverhampton College.

Its latest report, published in 2020, noted that it had struggled with the “combined effect” of an ‘inadequate’ Ofsted rating in 2012, regional demographic decline of 16- to 19-year-olds and “steep reductions” in adult funding. These issues, combined with the limited appeal of its 1960s-built campus, resulted in a significant drop in income.

It praised the college for improving its financial practices, appointing “capable” leaders and maintaining a ‘good’ Ofsted grade at each inspection since 2014.

Central to the college’s long-running intervention was its ‘inadequate’ financial health rating caused by a requirement to classify its large debt as a liability due to a “covenant breach”.

Efforts to repair the finances began in earnest following a 2016 appraisal, after which the DfE agreed to help the college restructure its debt and a deal was struck with the council to move one of its sites to the City Learning Quarter.

However, “highly ambitious” forecasts of income from apprenticeship growth only partially materialised, and funding needed to start building the new campus took much longer than planned.

A DfE spokesperson said: “The current leadership team and governing body of City of Wolverhampton College has significantly improved the strategic and operational performance of the college, increasing income and rationalising costs.

“The financial notice to improve has been lifted following the submission of accounts that demonstrated improvement in financial health for the year 2022/23.”

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