'Substantial number of redundancies' at HSDC as 'serious cashflow pressures' results in 'formal intervention'
‘Serious cash flow’ issues combined with a reduction of students has resulted in formal intervention at a college which now needs to make cost savings of £2m to continue operating.
The principal of Havant and South Downs College (HSDC), Mike Gaston, has confirmed that the financial instability at the college, which spans three campuses, will result in a ‘substantial number of redundancies’.
The college has been facing financial concerns for a considerable amount of time with its most recent statements showing a deficit of £548,000 for the 2023/24 financial year.
As a result of this, the Department of Education issued a financial notice to improve (FNTI) on Tuesday, April 8, outlining the college has a financial health grade of ‘inadequate’.
The FNTI said: “The Department for Education (DfE) is issuing this Financial Notice to Improve to Havant and South Downs College (HSDC) following the serious cashflow pressures facing the college and the confirmation of a post moderated Financial Health grade of ‘Inadequate’ for the year ending July 2024.
“This means that HSDC is now placed into formal intervention.”
The purpose of a FNTI is to highlight that an education setting needs to improve its financial management, control, and governance and it will now be closely monitored by DfE.
If HSDC fails to make financial progress or comply with the conditions, the DfE ‘will pursue one or more of a range of options’.
Mike Gaston, principle of HSDC, said: “While the challenges outlined in the FNTI are significant, they compel us to take decisive action, including a process of right-sizing that may, regrettably, involve a substantial number of redundancies. I want to be unequivocal; these decisions are never made lightly.
“Our foremost priority is to stabilise the college to secure a sustainable future, ensuring that we continue to offer the high-quality education our students expect.”
The annual report and financial statements for the year ended July 31, 2024, also said that the college saw a reduction of students, between 16 and 19, enrolling last September which will present a further financial challenge.
The financial statement said the college has prepared forecasts which show that ‘if cost savings of at least £2m are achieved by 2025/26’ there will be ‘sufficient funds’ to operate and pay liabilities up to July 31, 2026.
The statement added: “There is the existence of material uncertainty that casts significant doubt on the college’s ability to realise its assets and discharge its liabilities in the normal course of business.”
Mike added: “I acknowledge the personal and professional challenges and distress this restructuring presents to my colleagues.
“The notice to improve does not in any way relate to the quality of teaching at the college, nor does it relate to or impact the experience of our students.
“The goal now is to build a college for the future, one that is financially secure, operationally sustainable, and continues to provide meaningful employment within the community.”
More updates to follow.