Select committee: Public Accounts Committee
Conclusion 21
Thirty-Eighth Report - Managing colleges’ financial sustainability
Published 27 Jan 2021
Addressed to HM Treasury
Public Accounts Committee Managing colleges’ financial sustainability All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The intervention regime for colleges incorporates a number of phases, from prevention work, through early intervention and formal intervention to, in the most serious cases, 31 C&AG’s Report, paras 1.7–1.8 and Figure 1 32 Q 43; C&AG’s Report, para 2.10 33 Qq 43–45; C&AG’s Report, para 2.10 34 Q 64 35 C&AG’s Report, para 4 36 Qq 107, 112 37 Q 109 Managing colleges’ financial sustainability 13 insolvency.38 At February 2020, the ESFA was intervening in nearly half of all colleges for financial health reasons—84 colleges (35% of open colleges) were in early intervention, while 31 (13%) were subject to formal intervention.39
From: Public Accounts Committee, Thirty-Eighth Report - Managing colleges’ financial sustainability (HC 692), 27 January 2021
Government response
The government responded to the whole report on 26 March 2021.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it "agrees with the Committee's recommendation" on each of the seven recommendations in the response, with target implementation dates given for several.
- On VAT, it agrees with the recommendation and says the department will "explore the potential routes and efficacy" of it with HMRC, and will engage HMRC/HM Treasury "to gauge ministers' appetite" for changing or implementing legislation (target date: August 2021).
- On funding based on student numbers, the department says it is "currently developing a consultation" on how a change to the college funding formula could help, and is "considering the advantages, disadvantages and possibilities" of a system based on real time activity.
- On intervention, it will consult sector stakeholders to "review and publish an update" to its college oversight support and intervention policy in May 2021, and the Committee will be provided with a copy.
- On T Level work placements, the department will write to the Committee in July 2021 setting out what assurances it has that there will be enough industry placements, and the impact of COVID-19 on their availability.