Area Review recommended this GFE college should remain “stand alone” but to embrace the principles of “fresh start”. Against the backdrop of a very fragile cash position, a complete overhaul of the senior management team and a refresh of the Board, the need for a successful application for significant restructuring support was critical to securing the future position.
Summary
- GFE college designated “Fresh Start” post Area Review
- Significant debt burden, including Bank, EFS and BIS loans
- Impacted by funding cuts, student demographic, local competition
- Need for change in Management and Board
- Sector reforms to be addressed
- Ongoing deficits forecast
- Limited options if “Fresh Start” not achievable
Challenges
- Substantial legacy debt
- Two campuses; excess capacity; complications of rationalisation
- Significant operational efficiencies required
- Very fragile financial position
- Ongoing EFS needed pending restructure and TU application outcome
- Management team and Board refresh critical to secure ongoing stakeholder support
- Robust Business Plan needed to support TU application
- Limitations in internal skills and resource
- Limited stakeholder management experience
How we helped
- Led project to prepare a credible 5 year business plan
- Engaged with senior management, key personnel, and Board throughout
- Led stakeholder engagement, notably Bank, TU, ESFA and Deputy Commissioner
- Agreed key progress milestones with stakeholders and Board
- Managed engagement of third party expertise (curriculum, estates, CFADS, IT)
- Played instrumental role on “Fresh Start” Transition Steering Group
- Supported and guided Management and Board through the TU journey
- Supported EFS applications needed pending TU outcome
- Prepared TU submission document
- Supported College in fielding of post submission Plan and CFADS queries
- Overall, facilitated ability for management to keep focus on the day job
Results
- Successful TU application outcome (short term completion expected)
- Robust business plan with clear strategic objectives
- Supported by a transition and delivery plan, to back up the “how”
- Leaner more efficient business model
- Agreement to pursue a balanced estates rationalisation plan
- Fully engaged and supportive financial stakeholders
- Local stakeholder support from LEP, LA, MP’s, Chamber and other providers
- Refresh of Senior Management and Board
- Short term cash pressure relieved as EFS secured, pending TU outcome
- Clear visibility on steps and forward milestones to achieve long term sustainability
Benefits at a Glance
- Financial restructure will remove huge uncertainty, giving the ability to focus on the future and delivering long term sustainability
- Management and Board received clear advice, guidance and support throughout
- Facilitated constructive challenge and debate in concluding on final business plan
- “On tap” experience of dealing with funders in distressed scenarios
- Engagement of stakeholders in really understanding the challenges faced
- Stakeholder group have greater confidence in business plan
- Brought clarity around alternative options, implications of failure and mitigation
- Visibility of strategic priorities and converting the plan into real life action
The support the College received from De Novo Advisory in being guided through the Transaction Unit and Restructuring Facility process was invaluable, and undoubtedly contributed significantly to the final successful outcome.
Jo Wright led the process and quickly gained the trust of College managers and the Governing Body, whilst rapidly assessing and understanding the College’s key challenges, as well as establishing positive relations with the key College stakeholders.
Jo’s approach is thoroughly professional and she is an exceptional organiser and motivator. Her grasp of FE is impressive given the relatively short time she has been active in this sector.
I would have no hesitation in recommending De Novo Advisory.
Finance Director and VP
