The recovery plan starts where Lambeth College s strategic plan starts by defining the college in relation to the dynamic communities it serves.

Transcription

1 Recovery Plan Summary The recovery plan starts where Lambeth College s strategic plan starts by defining the college in relation to the dynamic communities it serves. 1.1 Lambeth is the fifth most deprived borough in London but benefits from being home to dynamic and diverse communities from all over the world (Jones, 2013, p15). The borough is currently benefiting from the redevelopment of 195 hectares of the Vauxhall, Nine Elms, Battersea Opportunity Area (including an extension to the Northern Line) which is anticipated to result in an additional 25,000 new jobs providing considerable further training needs and recruitment opportunities for Lambeth residents. 1.2 Lambeth College, created by incorporation from the ILEA, is the borough s principal provider of vocational education. In the college enrolled over 13,000 learners (two thirds coming from the Borough of Lambeth). A damning Ofsted report in 2012 still found room to praise the college for recruiting well from Lambeth s minority ethnic backgrounds and acknowledged that managers have successfully created a culture of respect and tolerance (Cole, 2012, p2). 1.3 As is common in these cases the standard financial performance measures provided a lagging indicator of the college s underlying malaise. Like success rates the college s financial performance is well below national averages see table 1: Table 1: Lambeth College financial performance Lambeth Tertiary College Average Performance Operating surplus/turnover -7% 3% Solvency Cash days 28 days 84 days Current ratio 0.9:1 1.7:1 Sustainability Borrowing/income 45% 23% Staff costs/income 67% 61% Source: Skills Funding Agency, 2013a The college s student to staff ratio was too low and its space to student ratio too high. A feature of the college s problems was its insularity; it had not made a strategic response to the government s 2010 comprehensive spending review or the changes in curriculum sponsored by the government. For example the college was competing with numerous local sixth forms in the provision of A levels but was not offering vocational alternatives where the schools were unable to compete. In this respect the college had taken out an expensive loan to fund an inflexible block for sixth-form studies resulting in a high level of gearing and failed to stem declining enrolments. Classified as failing by Ofsted, the corporation, on the advice of the newly appointed Principal in March 2012 and supported by the

2 government, opted for a strategy of quality first. Had the college failed a second inspection it would have ceased to exist. With a new Principal and a new direction the college prepared for re-inspection, refreshed its governance arrangements and started its curriculum shift towards more vocational arrangements the careers college. College success rates are now rising. However the college s financial performance is lagging two years behind and will be at is worst in before it too starts to improve. The recovery plan sets out what the college intends to do about this position. The plan sets out a twenty, twenty, twenty, ten vision in which success rates are raised by twenty per cent; room utilisation is improved by twenty per cent, twenty per cent more guided learning hours are generated by each pound spent on teaching costs and there is a ten per cent increase in the number year olds. 1.4 There are six strands to the corporation s plans for recovery viz: 1) Renewing the college s leadership; 2) Improving quality and curriculum; 3) Blocking the haemorrhage of cash; 4) Attracting more students and apprentices; 5) Selling surplus space; and 6) Matching staff and student activity. These strands are set out diagrammatically in table 2: Table 2: The six strands of recovery Renewing the college s leadership Improving quality and curriculum Blocking the haemorrhage of cash Attracting more students and apprentices Selling surplus space Matching staff and student activity The next part of the recovery plan documents, for the government s benefit, the facts that the college has already made substantial progress with many strands of its recovery 1.5 The college has already made significant progress in renewing its leadership: (a) The college has a new chair and vice-chair of governors. Whereas in 2012 Ofsted found that governors have lacked sufficiently detailed and timely information to monitor college performance and challenge senior manages effectively

3 (Cole, 2012, p12) by 2013 Ofsted found the college had well qualified and experienced new governors who support and challenge college managers in their drive to improve outcomes for learners (Jones, 2013, p1); (b) Ofsted also found that Lambeth had a new clerk who supports the board well (Jones, 2013, p11); (c) In Mark Silverman the corporation appointed an experienced Principal with a strong track record of turnaround from two previous colleges ; (d) The layer of management between the College Leadership Group and the curriculum managers has been removed enabling a sharper focus on the performance of the delivery teams. As Ofsted put it Curriculum managers have been supported well to review their performance and produce evaluative selfassessment reports, some for the first time [our emphasis] (Jones, 2013, p11). The impact of these changes is reflected in a successful Ofsted re-inspection February 2013 and much improved student success rates in 12/ Lambeth s renewed leadership has resulted in improved quality. The new Principal and senior managers have worked tirelessly in the past year to put in place management and quality systems that provide sound foundations to improve outcomes for learners and this effort has not been without its reward for this improvement reversed a three year decline (Jones, 2013, p11). Table 3 below shows how low success rates had fallen and the subsequent improvement: Table 3: Improvement in long course success rates at Lambeth College Actual Actual Projected % 76% 82% 82% % 73% 79% 80% National benchmark Source: The Data Service for and These improvements were secured at the financial cost of developing the college s management information system based on its student record, making the bold (and painful) choice to pull out of A level provision, securing support for the Ofsted re-inspection and introducing new employer facing structures and an enhanced vocational curriculum offer. Ofsted noted the progress the college had made when in April 2013 it revised its former assessment of the college as inadequate and substituted requires improvement. The corporation is determined to build on this progress throughout the period of the recovery plan. It is expected that Ofsted will provide a further judgement on the college s progress in the academic year Student success has been and will continue to be the focus of corporation s concern. Now that progress is clearly being made the corporation are additionally concerned to secure

4 Lambeth s financial position. The first requirement has been to block the haemorrhage of cash. This process for developing the required action in four areas: (a) Reducing staff costs; (b) Reducing payments to partners for educational provision; (c) Setting challenging non-staff budget targets; and (d) Creating an employer-facing team Go 2 Work to boost commercial income. The recovery plan then moves on to new areas for development 1.11 Blocking the haemorrhage of cash is a necessary but not sufficient condition for recovery. Like all viable organisms the college needs to grow and the college intends to grow by responding to the government s financial incentives to teach more year olds. The college has restructured its provision to concentrate on its vocational provision. It has eliminated A levels from its portfolio and enhanced its offering in the areas of hair and beauty; catering; motor vehicles, uniformed public services, leisure, tourism, health and social care concentrated on new and refurbished accommodation at its Clapham campus. Over the period of the plan the college intends to achieve the growth in year olds set out in table 4 below: Table 4: Growth in year olds at Lambeth College (excluding apprentices) Actuals Projected Headcount 1,798 1,800 * 1,900 2,000 Source: P Doble: 3 Sept 2013 * Unfortunately the funding mechanism adopted by the Rt Michael Gove MP, Secretary of State for Education means that growing colleges need to bear the costs of additional year olds for a full year before they receive any funding for them. The college is only funded for 1, learners in 13/14] 1.12 Whilst the number of year old students is expected to grow the growth will not be sufficient to fill the buildings owned by the college many of which are already described as outdated (Cole, 2012, p7). Indeed 80% is category C. In Lambeth only generated 69 daylight guided learning hours per square metre of space. The college had concluded that it should reduce the size of its space holding by 9,000m 2 (Lambeth College, 2013a, p2). The college needs to sell its surplus space. Tenders have been invited for the sale of the college s Brixton campus and re-provision of a smaller adult employability centre The SFA have identified that the college s staff cost to income ratio is high (Canham, 2013, p6). Indeed in the ratio of staff costs to income at 67% (see table 1) was 6% greater than the tertiary college average. The college needs to achieve a better match between staff and student activity. The form of the college s contracts of employment were inherited from ILEA and include an annual limit on teaching activity of 828 hours. Lambeth needs to be in a position where it can better respond to the needs of its students and intends to agree

5 working practices with its staff which reflect those needs.. Further cultural change may be required and the College needs to make suitable financial provision to effect this change and to allow for a more efficient curriculum delivery model and cost effective provision of support services. The numbers in the plan are probably more important to the government than the narrative and this section provides the government with the key numbers it needs 1.14 The college has modelled the financial effect of these six strands of activity and the impact is as shown in table 5: Table 5: Impact of recovery on key finance related performance indicators Activity No of year olds * Adult activity ( 000s) * Performance Operating surplus ( 000s) * SFA performance Actual Estimate ,906 1,753 1,800 1,900 2,000 20,353 19,150 15,444 14,208 13,811 (2,460) (3,200) Removed Removed 541 0% -4% 0% 5% 9% ratio * Solvency Cash ( 000s) * 2,803 1,894 Removed 3,180 3,722 Current ratio 0.9:1 0.4:1 Removed 1.2:1 1.6:1 Sustainability Staff costs to income * Payroll costs of permanent staff ( 000s) * 67% 68% 69% 66% 62% 21,515 19,683 18,602 17,500 16,200 SFA gearing ratio 64% 79% 43% 39% 38% Daylight GLH/m The six key finance related performance indicators marked * will be monitored monthly; the remaining four will be monitored annually at year end. [Four numbers have been removed from this table because it might be possible to work backwards from them to the projected value of the Brixton receipt which is commercially sensitive.] The next two sections of the recovery plan are a risk analysis and a section setting out the high level actions needed to secure recovery. These sections are not included in this annex. These sections are followed by the college s proposal with regard to monitoring the progress of the recovery plan.

6 1.17 Progress against the high level actions will be monitored by the college leadership group, the governors and the government. The college leadership group will meet in the fourth week of each month to consider the performance of the previous month and then present their report immediately to the governors and the government. The college will meet with representatives of the government at the beginning of the following month to review this report. Following the SFA s analysis that excessive targets and indicators risked distracting the governors and that the Corporation should critically review the range and content of the KPIs and targets considered (Canham, 2013, p5) the corporation has selected the ten financial indicators set out in table 5 above for monitoring the financial aspects of the recovery plan. Six of these indicators, those marked with an asterisk will be monitored monthly, the remaining four (which are either not expected to change rapidly or which are only measured with precision once a year) will be monitored annually The Strategic Plan agreed in autumn 2012 is being reviewed during autumn 2013 to reflect the need to return to a minimum of satisfactory financial health and the prospect of reduced funding for adult learners and more cautious assumptions about the potential for growth of other funding streams. As part of this process the financial KPIs in the current strategic plan will be reviewed and aligned to be consistent with the KPIs in this financial recovery plan. All College KPIs will be consolidated into a single Measures of Success document against which the Corporation and managers will monitor performance The recovery plan set out in detail in the rest of this document sets out the activities which are necessary to take improve Lambeth College and it details how this recovery will be monitored. During the period of the recovery plan the proportion of the college s estate rated at C or worse will fall from 80% to 51%. External recognition of the improvement achieved will come when Ofsted lifts its assessment of the college to good after their 2014 inspection and when the government also changes its financial rating of the college following their study of the college s financial statements. With this statement of how the college s recovery will be recognised the summary chapter of the college s strategic plan ends. This material is then developed in nine further chapters of the recovery plan covering: background; the college s strategic plan; curriculum and quality; staffing; business support systems; accommodation; financial plan; risk management and implementation and monitoring. Brief extracts from two of these chapters are provided below. These extracts show how much of the college s strategic plan is retained in the recovery plan and quantify the changes in the college s building stock (less space, higher quality) which are built into the recovery plan. Strategic Plan

7 3.10 The recovery plan represents the next stage of college planning following on from the strategic plan. Most of the key elements of the strategic plan are retained in the recovery plan. To recover the college will need to proceed more rapidly with some changes than the strategic plan envisaged, manage the potential for a larger than anticipated reduction in SFA funding and revise growth targets for other income streams 3.11 The following fundamental aspects of the recovery plan remain unchanged: - the branding of the college as Lambeth College the Careers College ; - the College s Mission of making Lambeth a Great College, with the learner at the heart of all we do ; - the five strategic aims; - offering education and training in Clapham, Brixton and Vauxhall; - offering a programme for young people based around vocational provision in health, care, construction, leisure and service industries and avoiding harmful competition with local schools; - expanding student/apprentice numbers; - shifting the emphasis for adult programmes to vocationally related programmes; - creating a skills exchange and a business facing arm Go 2 Work ; - achieving a success rate of at least 87% and an inspection outcome of good. - reducing the proportion of income spent on staff costs by: ensuring full staff utilisation; changing the mix of teaching staff with more trainers, instructors, assessors and coaches; reducing absence costs; affordable pay awards; increased average class sizes; and a review of staff contracts, terms and conditions There is now even more urgency around achieving an inspection outcome of good than was envisaged in the strategic plan. This outcome must be achieved in the inspection expected in the Autumn Term of rather than by 2017 as originally envisaged. There is also greater urgency around reducing the staff cost to income ratio. Accommodation Strategy

8 7.6 At the time the property strategy was developed over four fifths of the college s estate was rated as falling into category C building condition see table 12 below: Table 12. Lambeth College building condition in Spring 2013 Square metres Clapham Vauxhall Brixton Total Condition A 7, ,172 Condition B Condition C 10,043 16,472 7,475 33,990 Total 18,034 16,472 7,475 41, Table 16 below shows the improved quality of space that the college is intending to achieve by the end of its recovery plan. Table16. Lambeth College building condition in Spring 2016 Square Clapham Vauxhall Brixton Total metres Condition A 15, ,000 17,601 Condition B Condition C 3,850 14, ,838 Total 19,786 15,472 2,000 37,258 The recovery plan makes the point that beyond the works executed in the summer of 2013 no further action on the Vauxhall premises is set out in the recovery plan but that never the less there is both an issue of low quality at Vauxhall and an issue of over provision of space both of which will need to be resolved and that the sale of part of the Vauxhall site could provide a contingency against some of the risks the recovery plan faces.

9 Bibliography Canham, D (2013) Provider Finance Accountability Review letter (22 July 2013) Cole, L (2012) Lambeth College: Inspection Report, Ofsted Department for Education and Department for Business, Innovation and Skills (2011) Review of vocational education: the Wolf Report HM Treasury (2010) Spending Review 2010 Jones, K (2013) Lambeth College: Learning and Skills inspection report, Ofsted Hollis, J (2008) GLA 2007 Round Demographic Projections, Greater London Authority Lambeth College (2012) Strategic Plan Lambeth College (2013) Lambeth College: Property Strategy London Borough of Lambeth (2013) Census 2011: Lambeth Headlines Ofsted (2008) Lambeth College: Inspection Report Skills Funding Agency (2013a) College Accounts v2.0