FE Commissioner Summary report: Easton & Otley College November 2018 Contents Background to FE Commissioner Intervention Assessment 4 Overview of the College 5 Leadership and Governance 6 Role, Composition and Operation of the Board 6 Curriculum and Quality Improvement 7 Finance and Audit 9 Analysis of income and expenditure 9 Underlying financial performance 10 Performance against funding allocations 11 Cashflow / liquidity 11 Staff costs 11 Budget setting arrangements 12 Financial liabilities / loans 12 Financial (budgetary) control, management and record keeping 13 Financial reporting 13 Effectiveness of the financial recovery plan 14 Internal and external audit 14 Management of financial risk 14 Analysis of key financial problems 15 Estates and Capital Plans 15 Use and maximisation of college estates and assets 15 Property management and investment 16 Conclusions 16 Recommendations 18 Annex A - Information reviewed 19 Annex B - Interviewees 21 2 FE Commissioner Intervention Assessment report Easton & Otley College Name and Address of College Easton & Otley College Bawburgh Road Easton Norwich NR9 5DX Assessment undertaken by: Richard Atkins – FE Commisioner Meredydd David – Deputy FE Commissioner Teresa Kelly – Deputy FE Commissioner Andrew Tyley – Deputy FE Commissioner Chair of the College Mark Pendlington Principal / Chief Executive of the Jane Townsend College Clerk to the Corporation Rachel Robson Date of Assessment 31 October to 1 November 2018 3 Background to FE Commissioner Intervention Assessment Easton and Otley College was issued with a notice of concern by the Education & Skills Funding Agency (ESFA) following the May 2017 inspection, where Ofsted judged overall effectiveness to be inadequate. Ofsted also inspected the residential facilities at the college in June 2017. This unannounced visit identified several issues and concerns that some of the National Minimum Standards (NMS) for accommodation of students under eighteen by further education colleges were not being met. The college was referred to the FE Commissioner (FEC) for formal intervention in the light of the inadequate Ofsted inspection. The FEC, supported by a Deputy FE Commissioner and an FE Adviser, carried out an assessment in September 2017. They had previously attended the college for a one-day scoping visit on 19 July 2017. Following the FEC initial July 2017 visit: 1. The chair of the board resigned and was replaced with a new chair 2. The principal resigned and was replaced with an interim principal 3. Additional external safeguarding and prevent duty expertise was commissioned to advise and oversee the improvements required and to ensure that legal requirements were being met by the college 4. Additional external expertise was commissioned to work with all college staff to improve the approach to safeguarding across the whole organisation. The September 2017 intervention report recommended a range of actions including that the corporation should move quickly to consider the timely recruitment of a permanent principal to drive forward the quality improvement plan; reverse the decline in financial health; and work with the board to develop a clear long-term vision and mission for the college. The corporation did not conclude the national recruitment process to appoint a permanent principal until March 2018, when the interim principal Jane Townsend was confirmed in post. A stocktake visit took place in February 2018 to review the progress of the college against the specific recommendations made in the intervention report. By this time the college had been issued a financial notice to improve by ESFA because of an inadequate financial health grade for 2016/17. The stocktake noted increasing concerns about declining cash reserves. It also determined that by autumn 2018 the corporation would need to review and confirm whether student recruitment and income was on target and whether the reductions in the cost base would be sufficient to demonstrate a sustainable delivery model; or whether more fundamental structural change was required. 4 A further stocktake took place in July 2018, where increasing concerns about the college’s long-term sustainability resulted in a recommendation for enhanced monitoring and review by ESFA and the FEC and for the corporation to consider proceeding with a Structure and Prospects Appraisal (SPA) at its July 2018 meeting. The corporation took the decision not to proceed with an immediate SPA noting that if a SPA were to be considered necessary, November 2018 would be its preferred timing. As part of the enhanced monitoring role a Deputy FE Commissioner and FE Adviser visited the college in September 2018 for a financially focussed monitoring visit. The visit confirmed a significant shortfall against student recruitment targets for 2018/19 and noted ongoing work to head off a potential shortfall in working capital by the early release of cash from the planned sale of land. Ofsted conducted another full inspection in October 2018 and awarded a grade of inadequate for a second (consecutive) time (provision at the time of the visit). Ofsted judged that the grading of teaching learning and assessment, outcomes for learners, 16-18 study programmes, personal development, behaviour and welfare (PDBW) and adult provision all remained inadequate and leadership and management remained requires improvement. High needs and apprenticeships were both graded good. In response to the second consecutive inadequate Ofsted judgement and in accordance with intervention policy, the FEC undertook another formal intervention assessment on 30 October to 1 November 2018. This report sets out the findings from that visit. Overview of the College Easton College and Otley College merged in August 2012 to form Easton & Otley College, a specialist designated college (agriculture and horticulture). The college operates across two campuses. The Easton campus is situated 8 miles west of Norwich (Norfolk), whilst the Otley campus, 50 miles south, is situated 8 miles north of Ipswich (Suffolk). The college has approximately 4,300 students and offers a range of provision for all ages from 14 years upwards including full-time, part-time and short courses together with full-cost provision. 5 Learner numbers are in decline and the ESFA issued the college with a notice to improve for minimum standards for 2016/17 (19+ education and training). The college’s financial health is assessed as satisfactory for 2017/18, based on the most recent financial plan, although assurance is still needed to confirm that the reclassifying of the bank loans is correct to enable external auditors , to sign off the 2017/18 financial statements. Leadership and Governance Role, Composition and Operation of the Board The Easton and Otley Corporation Board currently has 18 members including two staff governors and one student member. In addition, there are two co-opted members who bring additional finance and audit experience. Board membership has been significantly refreshed in recent years and there is in most areas a broad range of appropriate skills. Members are representative of the wider college, community and industries relevant to the specialist nature of the curriculum offer. The chair took up post in August 2017. He has a range of relevant executive and non-executive as well as voluntary role experience to draw upon. He is well networked in the region and is a champion of rural and agricultural industries. The clerk is experienced, well qualified and effective in her role. Given that the college has been awarded two consecutive inadequate judgements for overall effectiveness the board needs to reflect upon its role and effectiveness in prioritising, guiding and holding to account the senior leadership team in the delivery of essential quality improvement. The governors must also quickly strengthen their knowledge and experience on curriculum and quality improvement through seeking additional members who have recent experience at senior management within the further education sector or/and quality inspection and improvement. An ambitious and visionary strategic plan, “Vision 21” is in an advanced draft form. The draft strategic vision fails to recognise the importance of the quality of provision. The board have failed to recognise that in order for an ambitious growth and development strategy to be delivered, the college needs to provide a very high-quality learner and employer experience - this is currently lacking. 6 Governors have not challenged performance targets and predictions sufficiently and have too readily accepted management explanations and reasons for underperformance and overoptimistic assumptions. Governors have not held senior leaders to account for the lack of quality improvement. The current principal has been involved with the college since September 2016. In August 2017 she was asked by the board to take on the role of interim principal. In March 2018, following an external recruitment process, she was appointed as permanent principal. The SLT has had to deal with major quality and financial challenges during their period at the college. It is recognised by staff, fellow managers and governors that the current team have worked tirelessly and are fully committed to making the college more successful. Despite this, it is evident that insufficient progress has been made with regard to the quality of provision. A poor start this academic year in relation to the organisation of provision, timetables and staffing puts further at risk improvements to