Colleges will ‘go bankrupt’ unless government delivers emergency help, leaders warn

Colleges face a £2bn income loss next year and some will go bust unless the government delivers emergency help, their leaders have warned.

The black hole has opened up after colleges were closed down when the coronavirus pandemic struck in March – with the majority of apprentices now on furlough, or made redundant.

They have now been left out of the £1bn student catch-up programme, a decision branded “indefensible” by David Hughes, the chief executive of the Association of Colleges.

Warning £2bn of £7bn of expected income in the next academic year was in jeopardy, Mr Hughes said: “That’s an enormous impact on a sector that has faced a decade of austerity and neglect.

“The government must, must, must do something to support those colleges that are at risk.”

The worst-hit faced losing 40 per cent of their cashflow, he warned, adding: “Solvency now is an issue, because if you take out 40 [per cent] of your income it’s very difficult to stay solvent.”

Kirstie Donnelly, chief executive of the City and Guilds Group, agreed that some training providers could easily “go bankrupt”.

On the £1bn catch-up programme, she said: “It felt, yet again, that schools, in the context of education, were getting all the attention,” she told the Commons Education Committee.

Earlier this month, Boris Johnson promised a “guaranteed” apprenticeship for all young people facing unemployment as recession looms – but no details have been announced to back up the pledge.

Further education colleges deliver courses in areas such as hospitality, retail, leisure and tourism – those hit hardest by the shutdown of the economy and society.

Mr Hughes said students would gradually return from the autumn, but colleges needed “certainty” that they would have the funding to teach them.

He also attacked strict universal credit rules which prevented them from joining short courses – because they were required to look for work full-time, in order to receive payments.

“Allow them to do the training that puts them in place for a job that becomes available,” he urged ministers, adding: “The rules don’t fit.”

After fierce criticism of the failure to reopen primary schools, private tutors will help the most disadvantaged children through a £350m programme for the 2020-21 academic year.

Gavin Williamson, the education sector, has also announced that primary and secondary schools would share a £650m to make up for lost teaching time – but the post-16 sector was excluded.

On 3 June, the prime minister vowed to be “interventionist” to prevent mass youth unemployment, saying: “I think it’s going to be vital that we guarantee apprenticeships for young people.

However, Downing Street has been unable to provide any detail of how the measure will be introduced and who exactly will benefit.