Hadlow College has become the first college to be placed into education administration.
At the High Court today, Chief Insolvency and Companies Court Judge Briggs approved the petition by the Department for Education, meaning that Hadlow will be thefirst institution to go through the college insolvencyregime,created by theTechnical and Further Education Act 2017.
Financial health notices to improve were lastweek published by the Education and Skills Funding Agencyfor the constituent colleges of the Hadlow College Group: Hadlow College and West Kent and Ashford College. A report into Hadlow College by theFE commissioner is expected to be published tomorrow.
Quick read:First college set to go into insolvency regime
Read more:Principal and deputy suspended at Hadlow College Group
Background:Hadlow College insolvency: How to ensure it doesn't happen again
'High risk'
The move comes afterFE commissioner Richard Atkins toldTes in March that there was a“high risk” of a college insolvency within 12 months.
Speaking toTesat the High Court, Mr Atkins said Hadlow was "the most serious case I’ve dealt with", and hit out at the "very poor levels of leadership and governance at the college". An FE commissioner report on the Hadlow College Group is expected to be published tomorrow.
The court heard how the move had been requested by interim college principal Graham Morley.Judge Briggs said he was satisfied that the college was "unable to pay its debts, or likely to be unable to pay its debts" and that it had "insufficientcash reserves to continue operation beyond 27May 2019".
The court also heard how the college had received£2.82 million in emergency funding from the DfE in February.
Hadlow College's 'cashflow crisis'
Hadlow's net liabilities amounted to£6.985m. Among its debtors is theNational Lottery, which gave the college a grant of £1.3m in 2016 for the development of theproposed Kent Mining Museum; it is seeking repayment of the£526,000 already paid to the college.
In giving his judgment,Judge Briggs said he was convinced that there were insufficient assets readily available toaddress "the cashflow crisis facing the college", and that there was "cogent evidence of cashflow insolvency".
A DfE spokesperson said: “Following a request from Hadlow College, we can confirm that the college has today been placed into education administration.This is not a decision we have taken lightly, but it is a necessary step to maintain educational provision at Hadlow and to protect learners.
“The Education and Skills Funding Agencywill continue to work closely with the FE commissioner, the administrators and with Hadlow College to minimise disruption to staff or students, and to make sure we have excellent provision of FE in Kent.”
