Alex Cunningham – 2016 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Alex Cunningham on 2016-01-26.

To ask the Secretary of State for Business, Innovation and Skills, what plans he has to provide assistance to further education institutions which incur financial penalties as a result of triggering break clauses in the loan agreements they hold with banks resulting from his Department’s area reviews.

Nick Boles

As independent institutions colleges involved in an area review are responsible for their own financial arrangements with banks and other creditors. Area reviews are the mechanism through which post-16 institutions have the opportunity to work together to ensure that provision best suits local educational and economic needs. We expect that the recommendations of each review will lead to institutions that are financially sustainable.

The costs including any financial penalties arising from the recommendations of each review will be explored as part of the process. We expect the colleges, alongside local authorities and LEPs with devolved skills budgets, to consider how these costs can be met locally. Where there are costs that cannot be met, but which are essential to the successful implementation of the review, we have announced a facility for transitional funding to support this. We will provide more detail in due course.