AS a new academic year beckons for colleges across Yorkshire and the North East, an uncertain future faces those that fail to make the grade financially.

Against a backdrop of rising costs, greater competition, and reduced funding, the Yorkshire and North East further education sector is braced for another challenging year ahead – out of the classroom.

And there are increasing fears that those who are struggling to balance their books may find themselves in administration if they are unable to mount a successful business recovery strategy.

This was the harsh lesson that was learned by Hadlow College in Kent.

Back in May, it achieved the dubious honour of being the first college to experience the sector’s new insolvency regime, after plunging into a “perilous” financial situation.

In an unprecedented step, it was placed into education administration after the Department of Education put an end to giving financial bail-outs to struggling colleges.

It was reported that the college’s cashflow crisis was so severe that it “was unable to pay its debts, or be unlikely to be able to pay its debts” and that it had “insufficient cash reserves to continue operations”.

Earlier this month its sister college, West Kent and Ashford, followed it down the same insolvency path, being placed in education administration.

Yet more worrying for the sector, the Further Education Commissioner, Richard Atkins, has now warned of a “high risk” of more colleges becoming insolvent.

In the media, we’ve witnessed first-hand the financial struggles that colleges are facing here in Yorkshire and the North East.

Staff went on strike at Bradford College in July as part of a dispute over plans to axe 132 jobs; Northumberland College has announced plans to cut staff numbers by 10 per cent following merger with Sunderland College; and Hull College Group – which runs colleges in Hull, Goole and Harrogate – has begun a restructuring plan to deal with a £10m deficit.

Rotherham’s biggest college group cut 40 jobs in cost-saving measures and York College has also made redundancies to reduce overheads.

While unsettling for staff and students involved, the Government has hailed the new insolvency approach as “not a new problem, but the beginning of a solution” for those colleges in financial difficulties, as they take advantage of specialist external business support.

David Hughes, the Chief Executive of the Association of Colleges, which has many Yorkshire and North East members, has put the risks facing the sector into bleak perspective.

“Funding cuts and a lack of rates increases have made running a college harder than ever,” he warned. “Those cuts have made it feel like walking a tightrope with any setback being potentially fatal to college viability. College funding has been cut harder than any other part of the education system over the past decade.”

Here at Walsh Taylor, when financial difficulties arise, we’ll put time on your side.

For more information on how our licensed insolvency specialists and business recovery teams in Leeds, Bradford, Harrogate and Darlington can help you, please call us on 03300 244 660 or email

Mary Taylor

Mary began working in insolvency for a national accountancy practice in Glasgow thirty years ago and worked in most divisions of the insolvency department.

She then moved to a smaller firm so she could advance her knowledge on a more hands on basis. She moved back to Leeds in 1987 and commenced working with a small firm of accountants and subsequently made partner.

She left in 1999 to set up her own practice, McCann Taylor.
McCann Taylor became involved with the consumer market both in England and Scotland.

Mary sold McCann Taylor in March 2007 and formed Walsh Taylor to concentrate on helping businesses experiencing financial difficulties.

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