ST HELENS College insists a recovery plan is in place to improve its financial position after a report by the Further Education Commissioner found it was at “high risk of insolvency”.

The report published this week found the college went ahead with its December 2017 merger with Knowsley College to form the SK Colleges Group, while “aware that major assumptions on which the financial plans were based on were incorrect”.

This meant that the merger was underfunded with the underlying position of the college “not sustainable”.

The report says the college should look at offloading assets. The Grade II listed, Beechams Clock Tower building is to be sold to developers the Luxor Group.

A Financial Health Notice to Improve on May 13, 2019 was served for inadequate financial health in 2017/18.

READ MORE > St Helens College to sell Beechams building to property developer

The report says that despite the board being aware funding may have been insufficient, the college “decided to proceed with the merger in view of the extensive preparations and commitments made between the two colleges and communities in the build-up”.

The report adds: “The chair stated that with hindsight they should not have progressed.”

It concludes the “most significant issues facing the college at the current time is the financial position which needs to be addressed swiftly”.

St Helens Star:

Beechams Clock Tower

It was said other key reasons identified for the current financial position were that the college set a significant deficit budget for 2018/19, it did not achieve the budgeted income in 2018/19, resulting in a substantial deficit, and did not take necessary action during the year to mitigate the deficit.

The FE Commissioner concluded: “With regard to the financial position, the FEC team consider that the current underlying operating position of the college is not sustainable.

“The college is at high risk of insolvency should action not be taken to mitigate and swiftly address the current financial position.

“The board also recognise that actions to address the shortfall in income have not been sufficiently timely or effective.

“The FEC team assess that the board are now aware of the actions that need to be taken in order to ensure financial and quality improvement.”

The principal of SK Colleges Group, Jette Burford, retired from the college in April. The college announced in March Monica Box had been appointed to the role.The report recommends that the college should prepare a recovery plan that meets the requirements of the Education and Skills Funding Agency, including a five-year financial forecast to demonstrate how it intends to achieve a future sustainable financial position.

It highlights that the college “occupies significant under-utilised space and should plan for a substantial reduction in estates”.

The FEC team will return to the college to consider the recovery strategy that has been prepared by the college.

Monica Box, principal of SK College Group, said, “Like many other further education colleges across the country, financial pressures are a reality. The college had recognised that it needed to take swift action to mitigate its financial position, and has been responding vigorously to this over the last academic year.

“Swift action has been taken since the FE Commissioner’s visit to the college in January 2019, and a variety of significant measures have been implemented. The three-year recovery/business plan will deliver the necessary actions to improve quality and the current financial operating position.

“Students and parents can be confident that quality and the student experience will not be adversely affected by any of the actions within the plan, in fact, the complete opposite is true. The new curriculum developments and enrichment activities planned will only serve to enhance and improve the overall student experience. We wish to reassure all our current students and prospective students that their decision to study with us from September 2019 is still the right one.

The college is very confident that over the last eight months, this progress has continued, and continued at pace.

“Driving quality improvements continues to be the priority for the college.”