The Learning & Skills Council (LSC) has issued an ultimatum to Pershore Group of Colleges — either agree to merge at a meeting on 14 March or close.
Pershore governors will meet next week to decide whether to go ahead with a merger with Warwickshire College and Herefordshire College of Technology — a move the industry has vehemently opposed.
LSC regional director David Cragg said: “There is no ‘do nothing’ option. There could be a closure — why not?
“I’m in a difficult position. People seem to believe we don’t mean what we say. But we have a responsibility for public funds and this can’t continue. If people believe that remaining independent is feasible and that we’ll continue to pour money down this hole — we will not. There has to be a final solution.”
Pershore claims it can reduce its debt to £2.45m by 31 July and is “trading out” of problems caused by lack of student numbers and the foot-and-mouth disease. Cragg said: “I don’t see any evidence that Pershore can get the debt down to £2.45m and nor does the due diligence report.
“It is an institution that has been in debt for some time. We have let it ride but there’s no evidence that it can clear the debts. And the estate needs repair and maintenance.
“We do not believe there is a viable future for Pershore. I want to dispel the myth that it is close to breaking even and becoming financially viable. Without £3m of public money, Pershore would be insolvent.”
The LSC has given Pershore £3.2m to carry on trading but Cragg said: “We’re not going to tolerate it any longer. It’s trading at a loss. We’re propping it up.”
Pershore governors and management decided they wanted to talk about merging with a land-based college. They considered and rejected nearby Evesham and Malvern colleges.
The HTA, Hadlow College and others have offered help concerning dealing with merger proposals. Cragg rejected these as well as the idea of a six-month suspension of the merger process.
Cragg said Pershore governors had taken professional advice and were working with a merger expert. “Eighteen months ago it was crystal clear there was no viable future without the merger process.
“We are not prepared to chuck good money after bad in terms of public funds. It’s a very large amount of money and we are bound by our public duty to deal with the issue. If the governors don’t want to deal with the merger we will be taking steps to resolve it.” Cragg said it will take £5.8m to resolve Pershore’s debts and pay for “essential maintenance” to the site.
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