A college that asked for extra funding in order to be able to pay its staff is one of two to be cautioned over their finances by the Education and Skills Funding Agency (ESFA) - which warned that its financial viability could be at risk.

Cheadle and Marple Sixth Form College and Warrington and Vale Royal College have both received a financial notice to improve (NTI) from the ESFA.

Last month, Tes revealed that Cheadle and Marple had asked the agency for additional financial support.

Quick read: College asks ESFA for help paying staff

Background: Hadlow College placed into education administration

Analysis: Hadlow College insolvency: How to ensure it doesn’t happen again

Risk to ‘solvency’ of Cheadle and Marple college

A letter sent to chair of governors David Lambrick last month, but only published today, reveals that the college’s financial health has been rated “inadequate”.

The letter, which was sent by Karen Sherry, northern territory director for the further education directorate at the ESFA, adds: “I am issuing this NTI because information provided by the college indicates that there is, or in the foreseeable future there is likely to be, a risk to the solvency or financial viability of Cheadle and Marple Sixth Form College.”

The news comes just two years after the college sold off land adjacent to its Cheadle site to the Department for Education for £6.3 million. Some £3 million of the proceeds were used to pay off debts owed to Lloyds Bank and the ESFA.

Warrington and Vale’s ‘inadequate financial health’

A separate letter to Warrington and Vale chair Mervyn Ward from Ms Sherry, also published today, states that the notice has been issued because “Warrington and Vale Royal College has been assessed as having inadequate financial health by ESFA following a review of the college’s audited financial statements and finance record for 2017-18”.

Both colleges are now in scope for intervention by the FE commissioner.

The news comes weeks after Hadlow College became the first college to be placed into education administration by the High Court under the insolvency regime created through the Technical and Further Education Act 2017.