At last - a principal charity regulator for FE colleges!

On 1 September, the Secretary of State for Business, Innovation and Skills, Vince Cable, was finally appointed as the principal regulator of FE colleges in their capacity as exempt charities. Whilst this has now brought an end to the indeterminate situation FE colleges had previously found themselves in, the burden imposed on colleges by charity law will become more significant.
Charity Commission powers already enforceable against universities (whose principal regulator, HEFCE, was appointed some time ago) will now be enforceable against FE colleges. For instance, at the request of the principal regulator, whether due to specific concerns or general ones, the Charity Commission is now able to launch an inquiry against an FE college. This would include disclosure of information to the Commission that could be potentially embarrassing for a college. After this inquiry, the Commission is able to direct trustees (governors) to take specific action in the interests of the college. The Commission also has the power to suspend or even remove a trustee, where it is found there has been misconduct or mismanagement in the administration of the college or it is necessary to do so to protect the college’s property, or appoint new ones, after the inquiry has concluded.
These powers could have a significant impact on college plans and strategies. For instance, a number of colleges have merged over the last few years and inevitably have involved BIS in this process. Should BIS express concerns over some aspect of the merger and the colleges still choose to continue with their plans, the Secretary of State would have the power to request a Charity Commission inquiry against one or both colleges. This could potentially derail or at least delay merger plans.
BIS is due to write to colleges shortly with further information about the new powers. Colleges should take steps to ensure that governors and senior managers are fully aware of the implications of this new regulatory role and its impact on strategic decision-making.
Eloise Di Pasqua
Education Team
For and on behalf of SGH Martineau LLP
DD: 0800 763 1377
International DD: +44 800 763 1377
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