College owes money to 300 firms who are unlikely to be paid

College owes money to 300 firms who are unlikely to be paid

The figures have been released by accountants BDO, who are acting as administrators for the financially stricken college.

Part of the Hadlow Group, the college was the first in the country to be taken into educational administration in May.

Its sister site at West Kent in Brook Street, Tonbridge, has since followed suit – and the BDO Statement of Proposals lodged with Companies House shows it is owed £4million by Hadlow College.

Both institutions are now in the process of being sold to North Kent College as recommended by the Further Education Commissioner – BDO are overseeing the transaction.

Gilbert & Stamper, an electrical contractor in Tonbridge, is owed £22,762, and its managing director Adrian Cross said the government ought to be ‘doing more’. He was shocked that ‘the college can continue to operate and dump all its debt’.

Other debts include £1,331,350 to Marpaul Southern property developers in Hadlow and £66,727 to Tonbridge & Malling Borough Council plus £503 to Queen Alfred Cakes in Wadhurst and £68 to Rent a Cherry Tree in Northiam.

The purpose of educational administration is to ensure that there is no adverse impact on the provision of further education despite budgetary issues – called ‘learner protection objective.’

This safeguard means that it is possible that almost none of the 317 creditors will be paid. Only assets which do not affect the courses will be sold off.

In total, Hadlow College owes unsecured creditors £35.1million, while Barclays Bank are owed £5.2million.

HMRC is due more than £2million, and the payroll deficit has accumulated to £474,000 for the 434 employees in the six months since BDO took over.

One asset that is being sold relates to construction projects at Betteshanger, which are worth £12.3million – the sale is ‘in the final stages of contractual negotiations’.

Betteshanger was the pet project of Hadlow Group’s former vice-principal Mark Lumsdon-Taylor, who wanted to construct a theme park at the old colliery site in East Kent.

Mr Lumsdon-Taylor planned to open a Kent Mining Museum there but the project was frozen in March; Hadlow Group had wanted to raise £40million from the sale.

The Further Education Commissioner Richard Atkins went in to investigate financial irregularities in May and  said he was ‘genuinely shocked’ by what he discovered, finding that Hadlow College had ‘completely run out of money’.

Lumsdon-Taylor and principal Paul Hannan were both suspended in February after applying for a government bailout of ‘exceptional funding’ – they received £2.83million – to pay wages. The chair of the college’s trustees, Theresa Bruton, resigned at the same time.

The BDO figures were published by FE Week magazine, who said they had been leaked. The Times understands that the information was freely available although the college chose not to announce it.

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