Battle to save college network from collapse
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.