Bat­tle to save col­lege net­work from col­lapse

The Sunday Telegraph - Money & Business - - Front Page - By Oliver Gill

THE Depart­ment for Ed­u­ca­tion is in talks with one of the largest pri­vately funded col­lege net­works over the par­lous state of its fi­nances as it grap­ples to se­cure an emer­gency fund­ing life­line.

GSM Lon­don, which was im­pli­cated in a BBC Panorama in­ves­ti­ga­tion into a stu­dent loans fraud last Novem­ber, was taken to the brink ear­lier this year.

The Sun­day Tele­graph un­der­stands that ac­coun­tants from BDO were placed on red alert amid fears GSM, which has over 5,000 stu­dents, could col­lapse into ad­min­is­tra­tion.

How­ever, Whitehall sources pointed to re­newed hope in re­cent weeks. While a GSM fail­ure “may have been an is­sue” sev­eral months ago, “it is no longer where it was”, one per­son said.

GSM par­ent Clip­per Group breached a June 30 dead­line to file its 2016-17 ac­counts with Com­pa­nies House.

Prior-year fi­nan­cial state­ments showed it had swung sharply into the red, post­ing an £8.7m pre-tax loss. It struck a mul­ti­mil­lion-pound fi­nanc­ing deal in De­cem­ber 2016 and was handed an in­ter­est hol­i­day un­til Oc­to­ber 2018.

A spokesman for GSM said the com­pany was “work­ing with the Depart­ment for Ed­u­ca­tion”, adding: “GSM Lon­don is cur­rently un­der­tak­ing a re­fi­nanc­ing process for the busi­ness.”

The Depart­ment for Ed­u­ca­tion said “ro­bust checks” were car­ried out on all “al­ter­na­tive providers” of ed­u­ca­tion. BDO de­clined to com­ment.

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