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From FE Week:
An adult residential college is facing a financial crisis that threatens its survival following a funding audit and government review.
Northern College, rated grade one by Ofsted with ‘outstanding’ financial health, is locked in a legal dispute with the Education and Skills Funding Agency following claims it has made “errors” worth £1.2 million across 2018/19 and 2019/20.
The alleged errors relate to claimed residential uplift support for learners who were not resident, but the college is contesting the agency’s interpretation of the rules which have been in place for more than a decade.
The ESFA is, however, still demanding repayment of the funding and is extending its audit to cover a further two years, which could increase the clawback.
At the same time, the Barnsley-based college faces having to pay back an additional £660,000 following a significant shortfall in enrolments this year owing to Covid-19, which means they won’t hit the ESFA’s controversial 90 per cent tolerance level.
On top of this, the government is conducting a national review of adult residential funding which could remove an uplift which multiplies funding for residential courses by nearly five times as much as the normal rate.
All of these factors are contributing to a “perfect storm” which puts the long-term sustainability of the college at risk.
The FE Commissioner has been asked by the ESFA to conduct a diagnostic assessment and structure and prospect appraisal, which could result in the college being forced to merge.
Supporters of the college have strongly condemned the government for causing its financial woes after years of strong performance.
Writing for FE Week (click here for full opinion article), former DfE director of FE funding Sue Pember, who is now the policy director of adult education network HOLEX, said: “Northern College is not at risk because of anything it could have foreseen but because of the unintended consequences of administrative action DfE may or may not choose to do.”
She described the situation as a “triple whammy” that “could be diverted with joined-up administration and impact assessment”.
MPs are also lobbying to help the college, which was founded in 1977 to train disadvantaged and disengaged adults and operates out of Wentworth Castle, a grade 1 listed building owned by Barnsley Council.