Colleges Reclassified as Public Sector

On 29 November 2022, the Office for National Statistics announced that it had reclassified further education and sixth form college corporations, and their subsidiaries, into the public sector. They are now part of central government.

What may at first seem to be a technical accounting change will have substantial implications for the way in which colleges are governed, financed, and operate.

The change will for example mean that college debts become part of the national debt; and that colleges will go to the Department, not the banks, to borrow money.

It will also mean that colleges need to seek formal approval from the Department before they, for example, further use their overdrafts or engage in ‘novel’ transactions.

We have had both Irwin Mitchell and MH&A unpack what this major change means for FE.