New Insolvency Regime For Sixth Form And Further Education Colleges

The financial pressures on sixth form and further education college funding have been steadily building for a decade or more; indeed the Institute for Fiscal Studies has noted that, as a sector, it has "experienced larger cuts in the 1990s...and is currently experiencing the largest cuts". This was reflected in the government's area reviews, carried out in 2015 under the aegis of the Education Funding Agency (EFA), which identified that 17% of FE colleges were struggling financially and were given notice to improve. That exercise also highlighted the fact that there were no statutory arrangements in place should a college become insolvent, prompting a 2016 government consultation: 'Developing an Insolvency Regime'. The resulting legislation, the Technical & Further Education Act 2017, contains insolvency provisions which are due to come into effect towards the end of 2018. These provisions were subject to a further consultation to which the government has just published its response.

What do the new insolvency provisions look like?

Normal company insolvency law will apply to sixth form and further education colleges. However, as...