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Almost £60m of loans to FE colleges waived

Almost £60m of loans to FE colleges waived

Department for Education loans were granted to provide financial support and to help with restructuring at colleges

23rd July 2019, 2:55pm

The Government Has Waived Nearly £60m In Loans That It Gave To Colleges To Help With Restructuring & Financial Stability

The Education and Skills Funding Agency (ESFA) has waived £57.8 million of college loans, according to accounts published today.

In recent years, the ESFA has provided significant financial support to FE institutions to facilitate mergers and restructuring and help move them on to a steady financial footing. Up to July 2018, 34 colleges received £270 million in exceptional financial support and restructuring funding loans. A total of 76 applications for funding were received by the deadline.

According to the Department for Education's accounts for 2018-19, published today, in some cases, DfE and Treasury ministers agreed to waive loan amounts to "help implement a long-term solution". Lambeth College, for example, had £10.6 million of loans waived, according to the document.

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Other large amounts waived in include £9.2 million for Bradford College, and £8.3 million for Stockport College.

All three colleges have been in the headlines this year. Staff at Bradford held a two-day strike at the beginning of July over job cuts and pay. Strikes have also been held Lambeth college – they were called off after 10 days of action when a deal was reached with management over pay and a reduction in teaching hours.

And in March, Tes reported that up to 50 members of staff, including 26 teachers, faced redundancy at Stockport College and Trafford College as a consequence of merger plans.

A spokesperson for Bradford College said: “Colleges are finding themselves in difficult financial positions due to the lack of funding rate rise over the last 10 years. The debt write-off was part of the package to ensure the college is able to be financially stable for the future so that we can continue to transform the lives of communities in Bradford and surrounding areas.”

A Department for Education spokesperson said:

“We provide exceptional financial support and restructuring facility support to colleges when funding is urgently required to meet college liabilities. Funding is given by the department to protect education and training provision for learners. Once the colleges are in a better financial situation we seek to recover all funding where possible.”