First UK college enters educational administration
Education Secretary Damian Hinds applied to the High Court directly following a review of college finances that found “immediate financial challenges”. The new category of education administration under the insolvency regime was created under the Technical and Further Education Act 2017.
Graham Morley, Interim principal of Hadlow College, wanted to reassure the 454 staff and over 2,000 students that courses would continue and that it would be business as usual from a day-to-day standpoint.
Mr Morley has been in charge since the previous chief executive Paul Hannan and deputy chief executive Mark Lumsdon-Taylor were both suspended in February following an investigation into the college’s finances.
The college specialises in training students for careers in rural industries such as Agriculture, Equestrian Studies and Fisheries Management.
Hadlow College is also a founder member of the Hadlow Group – a collection of other colleges and educational establishments including West Kent and Ashford College and Rosemary Shrager’s Cookery School.
The Education and Skills Funding Agency served Hadlow and West Kent and Ashford Colleges official notices to improve their financial health only last month. The other college to receive one was Hartlepool College in the North East.
The biggest surprise is that it’s taken this long for a college or university to enter administration.
We wrote last month that a significant number of UK Universities and Colleges were facing “credit crunch” conditions after the Department for Education were recruiting for a Policy Expert on higher Education Financial Sustainability with a specific brief to advise ministers on insolvency arrangements and potential intervention in cases involving Higher Education providers.
David Hughes, Chief Executive of the Association of Colleges, said: “This is an exceptional case under new legislation which has never been used before. Because of that, everyone involved in this will be learning as they go, so it is more difficult than usual to forecast what might happen.
“We know that the Department for Education was providing exceptional financial support to Hadlow College to cover running costs and that the decision was taken to petition the High Court to place the college into educational administration.
“The court will decide whether to appoint an education administrator using the new college insolvency regime introduced by Parliament. The education administrator has a primary duty to protect the interests of current and enrolled students first, and then creditors so the normal activities in the college will continue in the short-term and students should hardly notice any difference.
“That is an important difference to straightforward commercial insolvency and students and their families as well as staff should be reassured by that.”