‘Gut-wrenching’ £6m spent on Hadlow administrators

ESFA says that even more money would have been spent on the college if the insolvency option had not been pursued
26th November 2020, 12:51pm

Share

‘Gut-wrenching’ £6m spent on Hadlow administrators

https://www.tes.com/magazine/archive/gut-wrenching-ps6m-spent-hadlow-administrators
Insolvency: ‘gut-wrenching’ £6 Million Spent On Hadlow College Administrators 

Some £6 million of public money has been spent to date on administrators for Hadlow College, the Education and Skills Funding Agency (ESFA) said today. 

Speaking in front of the Commons Public Accounts Committee today, Matthew Atkinson, director of provider market oversight at the ESFA, said that the figure could still rise – as the administration process is yet to be completed. 

"The administrators charge by the hour, so the longer the case goes on, the higher the cost," he said. "And we also have a panel from which we choose administrators on a rotational basis. And that is significantly reduced charge-out rates to normal, but the cost to date of the administrators for both administrations is £6 million."


College finances: 64 colleges struggle with 'cash days' left

More: Break-up of Hadlow College begins

Need to know: Hadlow College placed into education administration


Labour MP Meg Hillier, chair of the committee, said that she “could imagine principals around the country gasping”, as the committee was.

In May 2019, Hadlow College became the first FE institution to go into administration after stacking up £40 million in debt amid concerns about the college’s former leadership. 

The break-up of the college began at the start of 2020  – with the college’s Mottingham campus transferred to Capel Manor College on 1 January, and Hadlow’s Spring Lane (Canterbury) campus and the Ashford site of West Kent and Ashford College transferred to East Kent Colleges Group on 31 March. 

Hadlow College: Insolvency 'the cheaper option'

Eileen Milner chief executive of the ESFA, said £6 million was a “gut-wrenching” figure.

“We have done assessment into Hadlow and West Kent and what would have happened if we hadn't pursued the insolvency regime option that we have, and the assessment shows that it would have cost us more than it cost us," she said.

“The £6 million figure is, if I'm completely honest, a gut-wrenching amount of money to spend. But it was cheaper than the alternative of not using an insolvency-based option.” 

In July this year, the Ney report into how the government monitors colleges’ finances and financial management was published. 

The report said that the nature of the current regime, the lack of a sector-wide strategy and the capacity and resources of the ESFA “have resulted in a relationship between government and the sector which is largely focused on financial failure” and which “inhibits colleges being transparent with government”.

Want to keep reading for free?

Register with Tes and you can read two free articles every month plus you'll have access to our range of award-winning newsletters.

Keep reading for just £1 per month

You've reached your limit of free articles this month. Subscribe for £1 per month for three months and get:

  • Unlimited access to all Tes magazine content
  • Exclusive subscriber-only stories
  • Award-winning email newsletters
Recent
Most read
Most shared