College faces insolvency if it fails to sell off land
A college has been warned that it faces the risk of insolvency if it fails to sell off land.
According to the Financial Times government minister Lord Agnew has written to Warrington and Vale Royal College chair Mervyn Ward to express his concerns.
It comes after the FE Commissioner Richard Atkins found that the vollege is at “significant risk of insolvency”.
Mr Atkins published a report which found there are “no major concerns” around the governance and leadership of the college.
But he added the college faces “several key challenges” due to its “very weak financial position and a need to generate funds through land sales”.
The college closed its campus in Hartford near Northwich last year.
The college has been trying to sell the site since 2018.
Lord Agnew said in his letter: “The importance of this sale to ensuring the future viability of the college cannot be overstated and I advise you to prioritise its successful completion and to continue making robust financial preparations to maintain solvency should the sale be delayed further.”
Warrington and Vale Royal was formed from a merger between Warrington Collegiate and Mid Cheshire College (MCC) in 2017.
The merger “proved to be highly challenging” and led to a huge drop in the number of students.
Lord Agnew said: “Falling student numbers and income together with inherited challenges from MCC have put significant cash pressures on the merged college, despite staff restructures seeking to align costs to income.
“The significant and continuing loss of learners from the former Mid-Cheshire campuses is an extremely concerning trend which the senior leadership team must address with immediate effect.
“The FE Commissioner’s report confirms that the college is in a very weak financial position and is at significant risk of insolvency by 2020/21 unless appropriate steps are taken to secure the liquidity of the college.”
A spokesperson for the college said: “Like many other FE colleges across the country, Warrington and Vale Royal College has experienced continued financial challenge and the ESFA have issued a financial notice to improve for 2017/18 in the context of a more stringent intervention regime that came into force in April 2019.
“The college has been working closely with the ESFA and the FE Commissioner team to monitor and improve the financial health of the college and will continue to do so until the college is in financial recovery and the notice is lifted.”
