Row erupts over local authority’s alleged threat to refuse funding

News Article

A local authority has reportedly refused to give a school further funding after alleging that it ran up a £2.7 million debt.

Isle of Wight Council has purportedly refused to give Christ the King College any further money until it is able to produce a recovery plan, outlining how it intends to repay the alleged debt to the local authority.

Problems appear to have arisen as a result of borrowing money to build a new sixth form block, at a total cost of £10 million, with annual servicing costs of around £650,000.

Speaking to the island’s local newspaper, the Isle of Wight County Press, Councillor Paul Brading, cabinet member for children’s services, said: “The situation came to a head on November 22 following a meeting between the director of children’s services and the head teacher and chair of governors.

“It was again made clear that the council was not prepared to advance any further funding. The school, despite clearly defined criteria and expectations, had still not provided a credible recovery plan and it must take responsibility for the problem and take the difficult decisions needed to address the financial position.”

However, the school has strongly refuted the council’s allegations. The Governing Body issued a lengthy statement, expressing disappointment in the way the matter had been handled, refuting all claims of financial mismanagement and accusing the local council of issuing statements which were “categorically untrue.”

In its rebuttal, the College stated: “It is also important to state that at no time has the College refused to work with the Local Authority regarding a recovery plan and it is committed to finding a solution to resolve this debt.

“However, the Governing Body has a well-documented history of the whole issue and remains adamant that the responsibility to address the situation does not, and should not, remain solely with the College.”

Luke Morgan, a Partner with Palmers, who specialises in debt advice for the education sector, said: “Whilst it would not be appropriate to comment on this particular case, in general terms, where cash flow becomes an issue, it is crucial to get advice at an early stage and seeking advice from a legal professional who has experience of both commercial debt recovery and the education sector is particularly important.”

To find out how we can help you with all aspects of debt advice, please contact us.