The National Audit Office is to carry out a study on the management of colleges’ financial sustainability, Tes can reveal.

In a letter to Stourbridge MP Margot James, written on 29 July, Gareth Davies, the head of the NAO, said his education team was “currently assessing the scope for a value-for-money study on the management of colleges’ financial sustainability. While its scope is yet to be finalised, the study may well cover several of your main concerns at a sector-wide level.”

More on this: Exclusive: College asks ESFA for help paying staff

Background: Commission calls for 16-19 student premium

Opinion: 'Parenting can bridge the disadvantage gap'

Colleges' financial difficulties

Ms James had written to the National Audit Office last month over the planned closure of Stourbridge College by Birmingham Metropolitan College. She said that under BMet’s stewardship, the college got into difficulties in 2015, obtaining a £16 million loan from the Department for Education.

An NAO spokesperson said: “We are currently scoping a potential value-for-money study on the management of colleges’ financial sustainability. Once we have decided on the scope of the study, we will add further information to our website.”