Area Review concluded this GFE college should remain “stand alone” and embrace the principles of “fresh start”. Against the backdrop of a very significant debt burden and fragile cash position, a financial restructure was secured, but the really hard work was still to come.
Summary
- Condition of funding was engagement of a Turnaround Director
- Compliance with Conditions Subsequent was critical (many of them, and some complex)
- Substantial (albeit significantly reduced) debt burden remained
- Newly formed management team needed to embed
- Financial stakeholders remained on high alert
Challenges
- Building stakeholder confidence with Bank, PMO (previously the TU) and ESFA
- Substantial cost reduction plans to be effected
- Enhancement of budget setting
- Complex estate rationalisation strategy to execute
- Newly formed executive management team needing time to embed
- Urgent quality issues to be addressed
How we helped
- Lead on stakeholder management with Bank, PMO and ESFA
- Lead on covenant waiver / re-set discussions
- Driving governance and compliance with stakeholder conditions subsequent
- Over-sight of execution of cost reduction plans
- Contributing to final budget setting and constructive challenge of assumptions
- Supporting on major staff restructuring program
- Providing guidance and support to governing body throughout
- Guidance at key committees (eg finance and general purposes, and audit and risk)
- Aiding recruitment of senior personnel
- Key role in supporting and driving major estate rationalisation strategy
- Supporting newly formed executive management team on all aspects of the turnaround
- Independent voice through ensuring appropriate balance between short and long term tension
Results and benefits
- Fully engaged and supportive financial stakeholders
- Stakeholders really buying in to the challenges faced
- “On tap” experience of dealing with funders in distressed scenarios
- Management and Board received clear advice, guidance and support throughout
- Leaner more efficient business model
- Clear focus in robust underlying assumptions, and scenario analysis
- Progress with estate strategy
- Quality significantly enhanced
- Clear strategic priorities delivered by a coherent Board