Select Committee on Public Accounts Sixty-Third Report


APPENDIX I

THE MANAGEMENT OF GROWTH IN THE ENGLISH FURTHER EDUCATION SECTOR (PAC 97-98/247)

Supplementary Memorandum submitted by the Further Education Funding Council

Q20. FINANCIAL HEALTH OF SIXTH FORM COLLEGES

  At 6 April 1998 the number of colleges falling into health category C was as follows:

Category
Other categories
Total
Proportion
Per cent

Sixth form colleges
11
97
108
10
Other colleges
85
250
335
25

Total
96
347
443
22


Q94-95. POWERS IN RELATION TO COLLEGES

  The instruments and articles of government of each corporation make the governors responsible for ensuring the solvency of the corporation. In the first place the efforts of the Council are directed to encouraging colleges to take practical measures to ensure their solvency and monitoring their financial position.

  However some colleges are unable to maintain their solvency without assistance from the Council or the banks. In both of these situations the Council has additional leverage which it can bring to bear on college behaviour. Where a college is seeking and advance of funds from the Council conditions are attached to any advance made. Where a college is seeking to borrow any significant[1] sum from a bank the Council's specific consent is required. In these circumstances the Council attaches special conditions to the consent. So in both cases the Council is able to take action to affect college behaviour.

  As a last resort, the secretary of state has statutory powers to dismiss governors or dissolve corporations.

Chief Executive

The Further Education Funding Council

7 April 1998


1   Any sum greater than 5 per cent of turnover. Back


 
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Prepared 7 August 1998