A college’s capital project is now “at risk” due to new strict government rules on borrowing that have been introduced following colleges’ reclassification as public sector bodies.
Kendal College had secured finance from a high street bank to redevelop the local disused Westmorland Shopping Centre into a new campus but has now been forced to pause this option and look for “alternative methods of funding”.
The issue has been imposed on the college by the Department for Education which ruled that colleges must now gain special permission, which will only be granted in rare circumstances, to borrow commercially from November 29, 2022, after the Office for National Statistics changed their status from the private to public sector.
Shadow skills minister Toby Perkins claimed there are more college capital projects at similar risk in a letter to education secretary Gillian Keegan that calls on her to urgently investigate the situation and criticises the DfE for failing to put in immediate alternative plans for college borrowing.
