Hadlow College was put into administration yesterday, the first college to go into administration since the government introduced some new insolvency laws for the sector earlier this year. The government never take the time to create new laws specifically for the insolvency of a sector unless there are major problems within it.
These special case administrations – where the government write different rules – are a very interesting beast – the administrators’ job is not just to get the best financial outcome for creditors, their job is wider, in this case they have to have regard to the 2,000 plus students’ education.
Quite how it will all work out remains to be seen, I’m sure many more education establishments will be watching with interest – have a look at the accounts of many of these places and you will see a very weak balance sheet and few options to improve it, often the only real option is to write debt off through an administration and start afresh – but that is a big decision.
Hadlow will, I fear, be the first of several to fall into administration in coming months and years, the floodgates are now open.