Developing an insolvency regime for the further education and sixth-form sector

05 August 2016

ASCL welcomes the opportunity to comment on this matter, but it has to be said that the consultation has not been properly handled; these complex and highly significant proposals were issued in July with a deadline only four weeks ahead, a period almost entirely within the typical college summer vacation. It has therefore not been possible to properly consult college principals and finance directors, and still less governing bodies. Further consultation is clearly needed before proceeding if there is not to be a significant likelihood of unforeseen consequences.

There is a danger that the introduction of this regime will undermine confidence in the sector at a time when its government funding is in sharp decline but the need for its service likely only to grow. Careful management of the publication of such a regime will be needed if it is not to damage colleges’ reputation with partners and make their relationships with banks and other lenders more expensive. It seems strange that the FE sector has been singled out for this development when the situation is equally uncertain in the higher education sector; onlookers are likely to draw the conclusion that it stems from an expectation of financial failure in the FE sector, when in fact the great majority of colleges have extremely good financial management.

Full response to consultation