Colleges that apply for exceptional funding will no longer be automatically placed into formal intervention, the Department for Education said today. 

The DfE said that it will “continue to intervene where colleges are at financial risk”, but that it wants to ensure that the ”action fits the college circumstances”.

A DfE spokesperson said: “We are providing maximum support to colleges during the Covid-19 pandemic and we will continue to intervene where colleges are at financial risk. However, we want to ensure that our action fits the college circumstances and is based on a thorough assessment.

Coronavirus: The impact on college finances

“We have updated our guidance to make clear that colleges applying for exceptional funding will not now automatically be placed into formal intervention.”

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Background: The scale of FE commissioner intervention revealed

In a new document published today, College Oversight: Support and Intervention, the DfE sets out the key features of a “strengthened college oversight regime”. They are: 

• Greater clarity and consistency for colleges by:
  1. Simplifying the regime. For example, detailing a set of tools and support that can be deployed according to the needs of each individual case through prevention, early intervention, formal intervention, restructure or exit.
  2. Collating multiple pieces of guidance into one place and being clear about which guidance this document replaces.
  3. An end-to-end Education and Skills Funding Agency case manager as a single point of contact from entering intervention through to exiting intervention.
• Continuation of key sources of support aimed at helping colleges to achieve “good” and “outstanding” quality and financial health, including FE commissioner diagnostic assessments, National Leaders of Further Education (NLFE) and National Leaders of Governance (NLG)
• A preventative function to identify problems sooner through financial dashboards for colleges and with additional indicators to alert the ESFA to investigate the college’s position in more detail and take follow-up action if required.
• Renaming the “satisfactory” financial health category to “requires Improvement”. 
• Extending the triggers for early and formal intervention.
• Strengthening the oversight of subcontracting and data.
• A strengthened role for the FE commissioner to review provision in a local area with the aim of ensuring long-term, high-quality provision for learners which meets an area’s educational and economic needs.
• Introduction of the statutory college insolvency regime.
• Use of independent business reviews (IBRs) to support effective decision-making, including use of DfE-commissioned IBRs.
• Renaming “administered college status” (which involves enhanced monitoring, such as ESFA observers attending college board meetings) to “supervised college status”.