Consultation response on developing an insolvency regime for further education and sixth form colleges

Consultation response on developing an insolvency regime for further education and sixth form colleges

Diane Gilhooley and David O’Hara at Eversheds look at the government’s response to the consultation on developing an insolvency regime for further education and sixth form colleges.

Introduction

In our briefing of 21 July 2016, we set out details of the government consultation exercise on its proposals to introduce procedures for further education and sixth form colleges which become insolvent. The proposed regime would include a Special Administration Regime (SAR), aimed at protecting learners from disruption to their courses, helping the rehabilitation of the college where this is possible or providing an orderly wind-up procedure.

Government response to consultation

On 27 October 2016 the government has now published its response to the consultation.

A total of 63 responses were received during the consultation exercise including from the Association of Colleges, 157 Group and the Sixth Form Colleges Association. There were also responses from individual colleges, education staff and student unions, local government pension scheme managers, local authorities and the main lenders to the sector.

Having considered the responses to the consultation the government intends to proceed with the introduction of a statutory insolvency framework for the further education and sixth form college sector, including the introduction of a SAR. The government says it will bring forward the necessary legislation as soon as Parliamentary time allows and that much of the process underpinning the new regime will be set out in rules and regulations which the government will consult on in due course. It is the intention that the new regime should be in place around the start of the 2018/19 academic year.

Special administration regime

Among the questions raised in the consultation exercise, a key one concerned the proposed introduction of the SAR to provide specific protection for the continuity of learner provision and which was consistent with the special objective. It was proposed that the special objective would require the

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