Bosses at Vision West Nottinghamshire College have moved to reassure students “there will be no impact on teaching” after it was ordered to improve its finances.
The college has been served with a “financial health notice to improve” after being forced to seek a £2,1 million loan from the Education Skills Funding Agency to cover a “short-term cashflow” problem over the summer.
However, trade union Unison has branded the college’s financial position “a disgrace” and said senior managers had “played fast and loose with public money”.
The college – which had more than 25,000 students registered in the last academic year – was forced to make 100 members of staff redundant earlier this year as it faced “financial difficulties” due to changes to funding methods, but it said the savings from this were yet to be realised, leading to the loan.
A college spokesman admitted the loan was “a significant amount of money”, but said the college was confident it would be repaid and “there will be no impact on teaching and learning”.
He said: “It is an undesirable situation, we are under greater scrutiny.
“Part of our recovery plan is to hit student recruitment targets, which is looking promising. So far, for the first few weeks of term, the college is buzzing.”
The college – which has an annual turnover of more than £43 million – was forced to seek the additional funding after the sale of a subsiduary company “fell through at the last minute”.
In her letter to Nevil Croston, chairman of governors at the college, Karen Riley, the ESFA’s FE group Midlands and East territorial director, said: “I am issuing this notice to improve in line with the published policy because Vision West Nottinghamshire College has requested exceptional financial support.”
Conditions of the college’s recovery plan include consultation with the ESFA over any “asset disposal”, regular sharing of its accounts with the ESFA and working with the ESFA and FE commissioner to undertake “independent assessment of the college’s capability and capacity to make the required changes and improvements”.
Failure to meet the conditions will see the ESFA “take further action”.
The college is based on Derby Road, Mansfield, with additional campuses in Sutton and Kirkby.
Leigh Powell, Unison national officer Leigh Powell, said: “It’s a disgrace that financial troubles have escalated to this level.
“Last year, Unison tried to warn the further education commissioner and governors about financial mismanagement at the college.
“Senior managers at the college have played fast and loose with public money to the detriment of students’ education, and the future of the dedicated staff who work there.
Both the college and the FE commissioner have passed the buck even when 100 members of staff were being made redundant.
“Staff are now left wondering who will be leading the financial recovery plan and how future changes will affect them.
“An urgent meeting with Unison, the college and FE commissioner representatives is needed so staff and students’ questions get clear answers.”
Dame Asha Khemka, college principal and chief executive, said: “Like many others in the sector, the college has experienced some financial difficulties as a result of a national change to apprenticeship funding and delivery methods, in particular the removal of sub-contracting, which had been a major part of our model.
“This resulted in the college implementing a staffing restructure, with close to 100 colleagues having left the organisation toward the end of last academic year through a combination of redundancy and voluntary redundancy.
“While the restructure was intended to rebalance the college’s finances, the full impact of savings will not be realised until 2018-19.
“This led to the college finding itself in a position of needing a short-term loan of £2.1m from the ESFA, which was provided in July.
“Under the terms of government guidance, this automatically triggered a financial notice to improve.
“The college’s plan for financial recovery, which led to the restructure, was also based on us meeting student enrolment targets in 2018-19 and early indications are that we are well on track to do so.
“Despite the challenges the college has faced, I am confident we will continue to serve our local communities as a vibrant institution which provides high-quality education and training to local people and employers.
“Our current challenges will have absolutely no impact on our students’ experience.
“The college strongly refutes any suggestion it has mismanaged public money.
“Our financial pressures are the result of national apprenticeship reforms, which have disproportionately affected this college due to the size of our delivery.
“We are more than willing to meet with Unison representatives to discuss the present situation. However, to date, we have not received any requests to do so.”