Hull College Financial Crisis

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Hull College Financial Crisis

College crisis after investigation reveals £10m deficit

A damning report has revealed that Hull College, part of the Hull College Group, is in major debt and lacks “strategic vision and strong, resolute leadership.”

The report, by the Skills Funding Agency, which provides funding for further  education in England, said the college had been issued a notice of concern in November 2016 because the authority had deemed it financially unhealthy.

It had received a ‘good’ financial health rating in 2012/13 but had experienced a sharp decline in performance since then.

The report said Hull College’s operating performance amounted to a deficit of £10m over the past four years, and further deficit of £1m is forecast in the current year. It said that “substantial work” needed to be done to bring the group up to scratch.

The SFA pointed out that the college’s strategy in dealing with the deficit had been year-on-year staff cuts, but that the wage bill still accounted for 78% of its income in its most recent accounts.

The college, which was awarded a £1m training contract from Siemens had also applied for exceptional funding support in October 2016, which raised alarms at the SFA.

The report stated that although the college had undertaken a restructure of its education and finance departments, “general business expertise is limited.”

It said governors were not made aware in a timely manner that falling student numbers were not only down to “adverse demographic trends” but also the loss of market share.

Hull College said it planned to undertake a management restructure and is planning on appointing a ‘turnaround director’ this year.

The report said: “There is concern at all levels of the organisation that the College lacks strategic vision and strong, resolute leadership and that this is frustrating and demotivating to staff.

“The size of this challenge should not be underestimated and current leadership and governance arrangements need to be improved to meet it.”

The SFA recommended an independent third party review, and that a member of the authority attend board meetings as an observer.

In a statement, Hull College said: “The corporation and leadership team is working with the FE commissioner to put in place a comprehensive and effective action plan to secure the necessary improvement while developing a new transformational strategic plan with staff and key stakeholders focused on providing technical education and training which is highly responsive to employer needs locally, regionally and nationally.”

Hull College operates from three sites in Hull, Goole and Harrogate and enrolled 18,000 students last 2015/16 academic year.

In March 2016 it was set to acquire the Scarborough Campus of the University of Hull, but the deal collapsed.