(3 weeks, 2 days ago)
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Tom Tugendhat (Tonbridge) (Con)
I am sorry to see the hon. Member for Strangford (Jim Shannon) running off. I was very much looking forward to his intervention a little later, but maybe he will be back. Who knows? Lucky me.
Hadlow College is Kent’s only land-based rural college. It is unique in our county for the offer that it provides. Its huge range of courses are designed to provide the skills needed to maintain Kent’s place as the garden of England. Having been campaigning for fantastic Conservative councillors earlier today in the beautiful sunshine, I can assure the House that it remains that wonderful garden.
The college is a regional powerhouse and an important part of the local Tonbridge community. Speak to any of our key rural businesses, and they will say how the skills offered at Hadlow College help maintain our agricultural capacity in Kent. For those reasons, we should have always been celebrating what Hadlow College does for the local area, but I must be honest: there was a period when we could not. In 2019, Hadlow College became the first further education institution in the country to enter educational administration. During this debate, I will explore how the process affects Hadlow and the community today and ask the Minister to consider how it could be improved.
Before I do that, I pay tribute to all staff and students who were at the college and all the linked institutions during this challenging time. They made sure courses kept running and that most were unaffected. I will name just a few of those people: Graham Morley, the first interim principal after educational administration in 2019; Lindsay Pamphilon; Jim Mawby at the Tonbridge site; and now David Gleed and Chris Lydon from North Kent College. That is not to forget Paul Boxall and his team at Hadlow rural community school, to whom I will refer later. The reality is that they had a much harder job because of the process the college went through in 2019.
In May 2019, Hadlow College became the first further education facility in the country to enter educational administration after an Education and Skills Funding Agency investigation. This followed updates to the statutory college insolvency regime in January 2019 that affected further education and sixth-form colleges. It meant that Hadlow College kept its doors open. But it was not just Hadlow College that needed to be rescued; also included were Hadlow rural community school, West Kent College in Tonbridge, Betteshanger colliery in Dover, Ashford College, Princess Christian’s Farm in Hildenborough, animal management sites in Canterbury and Mottingham, and a further site in Greenwich. The question is simple: how did so many further education institutions end up insolvent?
The expansion happened quickly in the years preceding 2019. It was about not just the acquisition of further sites, but the subsequent investment. Let us take the example of Betteshanger colliery; after Hadlow College’s interest started, it spent £1.2 million on changing plans for a visitor centre, and then lost £4 million on the collapsed sale of a business park. It very quickly became clear that the college had been reckless with its finances. Its expansion was getting further away from its core purpose: to provide land-based education in west Kent. Following the ESFA investigation, I wrote to the then Minister of State for Apprenticeships and Skills at the Department for Education, Anne Milton, on 10 May 2019. On Betteshanger colliery, the letter said:
“I would be concerned if further investment is made here in light of the financial situation should courses be cut, with students left unable to gain their qualifications.”
Put simply, money was either being used for peripheral projects that did not exist, or being transferred out of students’ education.
At this point, I wish to touch on the concept of the Hadlow Group. I have a copy of a letter I received on 1 October 2018 from the so-called Hadlow Group, which informed me of a proposal to merge West Kent and Ashford College with Hadlow College. In the interests of time, I shall not go into the background of the merger, which starts with the collapse of K College nearly 15 years ago; I merely want to point out that the Hadlow Group was seeking to merge colleges at the time. As the ESFA, the Further Education Commissioner, the administrators and the Department have rightly recognised, the Hadlow Group had no legal structure—it was essentially a marketing term to provide credibility to the ever-expanding portfolio of sites—which gives us an indication as to where things started to go wrong.
In the years leading up to 2019, I met representatives of the college many times, and often I was asked to help secure significant amounts of money for them. In December 2016, I was informed of two immediate funding issues: the repayment of £888,000 from the 2014-15 financial year, which arose from the K College acquisition, and the £929,935 that was needed at West Kent and Ashford Colleges for 2016-17. I asked the Department for this funding on the basis that it was used to support further education provision in west Kent, but was it? We now know that Hadlow College applied for £20 million from the ESFA’s transactions unit, but the application failed. The ESFA demanded that its funding be returned, and Hadlow College consequently asked for what was essentially a Government bail-out.
I include all that history so that the Minister and the House can understand the complexity of the situation and to make it clear what was happening. Money was being requested on a huge scale, supposedly for further education provision, but that is not where it was going. As subsequent investigations have found, there was financial mismanagement on a scale never seen before, which led to Hadlow College entering educational administration. There must be some accountability for the people who made those decisions, and it is therefore disappointing to many that those responsible for the expenditure—primarily the principal and the finance director at the time—have not had their investigations conducted in the public domain.
We learned in November 2023 that Paul Hannan, the then principal, will be fined £250,000 if he ever works in education again. We also know from the administrators’ reports that a deal was made with the deputy principal, Mark Lumsdon-Taylor, whereby he agreed to pay a four-figure sum as part of a confidentiality agreement. I find this part of the process extremely unsatisfactory. Tens of millions of pounds of public money has been poured into the educational administration process because of the reckless actions of the two senior leaders of Hadlow College at the time. Given the scale and profile of this issue, I do not think that a confidentiality agreement is appropriate, and I urge the Department to bring forward amendments to future legislation that increase the level of transparency and accountability in such matters.
This view is widely held in the community because, sadly, the offer at Hadlow College has deteriorated since the educational administration process. The Hadlow College farm shop is no more and the Broadview tearooms have closed. Its landholding has decreased. All of this had enabled Hadlow College to be a sustainable provider prior to the reckless expansion plans pursued in the last decade. That is all now gone because of the need to pay back for failed business ventures.
Put simply, what has happened here is a gamble with students’ education to expand beyond the core purpose of Hadlow College. I want to build on this point further, and I would appreciate answers from the Minister about how we can strengthen the educational administration process to future-proof education land. Why do I focus on land? Because that is what Hadlow College is fundamentally about. It is a land-based college. It needs land to train the next generation of rural entrepreneurs. The more land it has, the more it can contribute to the rural economy. The same applies to Hadlow rural community school.
In 2022, a number of parcels of land around Hadlow were marketed for sale by Knight Frank on behalf of the administrators, and the proceeds were used to pay back creditors. I understand that rationale from a financial perspective, but this is not an administration process. It is called an “educational administration”, and education provision has successfully continued throughout this turmoil.
There is broad agreement from all those now responsible for delivering further education at Hadlow, including North Kent College and Hadlow rural community school, that the sale of parcels of land has impacted the student offer. This is deeply regrettable. I would therefore like to ask the Minister how we may be able to adapt the educational administration process to ensure that land sales are not the default, especially for land-based educational establishments with this specialism.
From the perspective of North Kent College, having just taken over Hadlow College, the speed of this process meant it could not accurately make arguments to safeguard some land earmarked for sale. This has meant repurposing its provision on a smaller footprint. This has a big impact on the village. Indeed, having to repurpose means a much-desired footpath and cycle way between Tonbridge and Hadlow is extremely unlikely to be delivered.
The impact on Hadlow rural community school is even more severe. I am afraid I am deeply concerned about the approach the Department is currently taking towards its governance. The school has done extremely well to survive the process. It was designed for a land-based specialism, which the educational administration process rightly safeguarded. The separation of the college and the school was inevitable, but not necessarily detrimental to either. However, the loss of land in Hadlow affects them both.
I refer the Minister to my letter of 10 April 2025 to the Secretary of State. The Department is now articulating—based on a letter to the school from the Department, dated 3 April—that the plots of land at Court Lane, which could be used for educational provision, are sold. Frankly, it was this letter that motivated me to apply for this debate. The reasons given for that suggestion are interesting. It is claimed in this letter that Ministers have determined that
“capital investment options do not offer good value for money”.
This is the same Department that has rightly invested tens of millions of pounds in securing the future of education in Hadlow, both for the school and the college.
The education provision needs to be appropriate in a competitive market. Tonbridge has some of the highest-performing secondary schools and further education facilities in the country, and many people move to our community for our schools. Hadlow rural community school is an important part of this network, and one that has a clear specialism. The Department needs to support this first and foremost.
In addition, I was extremely disappointed to see a passing reference, at the end of the same letter, to the school
“engaging with North Kent College”
in a “long-term solution”. May I please remind the Minister that the long-term solution was found when separation occurred? I encourage the Minister to speak to officials who can remind her of the considerable correspondence we had back in 2023 to secure the appropriate lease for the school to access the college’s land.
Returning to the nub of the issue, Hadlow rural community school must thrive and succeed. To do so, it must have land available to retain its land-based specialism. It can do this under the current governance model, not as part of North Kent College’s delivery of services at Hadlow College. This works best for both parties, otherwise we run the risk of repeating all the governance failures that contributed to educational administration in the first place. The history I referred to earlier—of murky governance processes, expansion without clear justification and, frankly, some pretty outrageous scrutiny of public finances by the two individuals I named—must be avoided.
This is where I want to end. Education administration is an extremely difficult process. It is expensive and, since the incorporations legislation in 1992, I doubt whether there have been many other transactions where two interconnecting colleges were broken up, with one split into two parts and then transferred to three receiving colleges. Today, many parts of the complex further education web at Hadlow, and in Kent more broadly, are thriving. I pay huge tribute to those in further education colleges who give so many opportunities to so many. As I said at the start, staff, management and students must take huge credit and huge pride for what they achieved during those difficult days. It is now the responsibility of the Department to safeguard that under the current governance model. I will continue to be happy to work very closely with the Minister and her officials to achieve that, so we do not allow any historical actions of the kind I have listed to happen again.
The Parliamentary Under-Secretary of State for Education (Janet Daby)
I congratulate the right hon. Member for Tonbridge (Tom Tugendhat) on securing this important debate. I, too, wish to pay tribute to all the staff and students at the colleges and the school mentioned in the debate, North Kent College and Hadlow rural community school. In fact, I wish to extend that to all colleges and schools across Kent. I heard very clearly the points he made and I will attempt to address them during the course of my response.
Further education colleges are a vital part of the education system. It is important that we continue to support them and provide all the necessary tools to assist with ensuring that they have good financial sustainability. That includes the ability to respond to financial distress and, in its worst case, insolvency. Land-based provision is an important part of the further education system, with strong links to the Government’s mission to kick-start economic growth, support Britain’s ecology and make it a clean energy superpower.
Hadlow College, part of the North Kent College group, is the only land-based college in Kent. It has its own beef herd, sheep farm, horticultural production, a large animal management centre, fisheries lakes, a machinery and land-based technology facility, and equine centres. Its curriculum includes courses in agriculture, agricultural engineering, animal management, equine management, fisheries, floristry and horticulture, as well as some non-land-based courses. It has an important place within the Kent skills system.
Hadlow College has one main campus, in Hadlow. Prior to being placed into education administration, it was federated with another college, West Kent and Ashford College, a general further education college with campuses in Ashford and Tonbridge. Historically, in 2019, the colleges faced a series of financial challenges, resulting in a request to the Department for Education for exceptional financial support. At this time, the colleges continued to face significant creditor pressure, which was a key factor in the decision to place Hadlow College into education administration. Combined, the colleges owed creditors approximately £100 million prior to education administrators being appointed. Hadlow College was placed into education administration in May 2019, followed by West Kent and Ashford College in August 2019.
Following the appointment of education administrators, they, in conjunction with the Department, stabilised the financial position of the college while a solution was sought to ensure that learners were protected without the college needing to remain in education administration. The education administrators also hired an interim principal to run the colleges, with advice from a stakeholder education advisory board during this period. What followed was an intense period of options review, led by the Further Education Commissioner, to determine the best future outcomes for the colleges’ provision. This included inviting interested parties to make proposals to take on the provision. It should be noted that Ofsted visited both colleges during the process and found that they were making reasonable progress with regard to educational performance. This resulted in the recommendation that North Kent College should acquire the Hadlow College’s provision and its respective facilities. The transaction was supported with funding from the Department and was completed in August 2020. At this point, I would also like to say that the protection of learners was achieved, which I will go on to explain further.
Alongside the Hadlow College education administration, the education administrators for West Kent and Ashford College also ran an options review in conjunction with the Further Education Commissioner and invited interested parties to take on the college’s provision. This resulted in the recommendation that East Kent College should acquire the college’s provision and its respective facilities at the Ashford site. The transaction was supported with funding from the Department and was completed in March 2020. Combined with the transaction at Hadlow College, together with other smaller, similar sites between both colleges, more than 5,000 learners were protected through the education administration process.
An investigation into any mismanagement at the college was undertaken by the education administrators and then joint liquidators. This is a statutory lead investigation that applies not only to education administration, but to other insolvency processes. The outcomes of those investigations are detailed in the joint liquidators’ progress reports—publicly available at Companies House—but, in summary, they reached settlement agreements with the individuals involved.
The Department welcomed the conclusion of the joint liquidators’ investigations into the conduct of certain relevant individuals at Hadlow College and West Kent and Ashford College. The Department takes the protection of public funds extremely seriously, and we will continue to support robust action where there are concerns about the safeguarding of taxpayers’ money.
As the right hon. Gentleman points out, there have been implications of the education administration of the college for the co-location of Hadlow rural community school. The school was originally established by Hadlow College with a land-based specialism. The two organisations had governance links, and the school accessed the college’s extensive land-based facility to deliver its offer. During the process of the college’s education administration, separate governance arrangements for the school were established and the Department worked with the school to ensure that these arrangements were robust. The price for Hadlow rural community school to access the college’s facilities rose to the extent that it was no longer sustainable within the school’s budget, and the school has requested departmental support to help it develop its own land-based facilities.
I appreciate that the school has undertaken extensive work on proposals to the Department over a number of years to inform the officials’ assessment, and I pay tribute to headteacher Paul Boxall, his team and the Hadlow rural community school trust board for all the work they have done and for the passion they have shown in seeking to ensure the very best for their pupils. However, this is a complex case and it is critical that any support the Department may provide offers value for taxpayers’ money.
It is, of course, important that the school has clarity so that it can move forward with certainty and thrive. To be clear, Ministers value the school’s land-based specialism and appreciate the challenges this situation has caused for the school, and we remain open to considering ways to support the school to ensure it can continue to offer a high-quality and broad land-based curriculum.
The recent decision the right hon. Gentleman refers related not only to the Court Lane land, but to potentially significant capital investment to develop facilities on that land, particularly with high-quality specialist facilities at the neighbouring college. In the context of constrained public finances, Ministers decided that it did not offer good value for money.
Given those facilities at Hadlow College, our view is that, rather than replicating such specialist and expensive facilities next door, it is worth exploring whether an agreement can be reached between the college and the school on shared use of the college’s facilities. We understand that there will be complexities to that, and that it will be important to the school for any solution to offer security for the long term. Should the two organisations agree to negotiate, we have offered support from officials to try to help broker that, and, at the moment, this seems very likely.
To be clear, we understand the school’s desire for independence, and the Department has no intention of forcing the school to change its governance arrangements. We remain open to considering alternative proposals from the school. Indeed, the school has recently suggested a new option, which officials have agreed to consider.
The liquidations of both Hadlow College and West Kent and Ashford College remain open while the liquidators realise the remaining surplus non-educational assets. Again, the details of those assets are in the joint liquidators’ progress reports, available at Companies House, but, in summary, they relate to surplus plots of land in Hadlow. The liquidators’ strategy to realise the surplus land involves planning applications for its inclusion in Tonbridge and Malling borough council’s local plan, which would, if successful, enhance its value.
The Department has priority security on all these remaining land assets, and any realisations directly offset the costs of the education administration process and are effectively a return to the Department and the taxpayer. Those assets, which were not surplus and were required by either North Kent College or East Kent College, were transferred to those respective colleges as part of the transactions to take on the learners and provision of Hadlow College and West Kent and Ashford College and achieve the objectives of the education administration to protect those learners.
I know that the right hon. Member has requested a meeting, and I understand that that is in progress. I can assure him that we will continue to work with the joint liquidators to ensure the best possible outcome for taxpayers. We will also continue to work with North Kent College to ensure that the land-based and general further education provision in Hadlow continues to succeed for the benefit of its learners and for the right hon. Member’s constituency.
Question put and agreed to.