THE head of the UK's public spending watchdog has pledged to look closely at the management of BMet's finances which have led to the demise of Stourbridge College.

Comptroller and Auditor General Gareth Davies, who heads up the National Audit Office, has asked his team to look in detail to establish the facts of Birmingham Metropolitan College's financial situation after Stourbridge's MP called for an investigation.

Conservative MP Margot James told Mr Davies - whose office scrutinises how well the government is spending public money - that Stourbridge College had been “let down by the failures of management and leadership at BMet".

She told how BMet took over the Hagley Road college (and Brierley Hill Art & Design campus) in 2013, spent £5m on the Hagley Road facility in 2015 and now four years on it has closed, with Dudley and Halesowen Colleges poised to take over education provision.

The MP, who supported the merger between BMet and Stourbridge College at the time but has since said it is something she "very much regrets", told the Controller: “BMet was, and is, on the brink of insolvency."

She said BMet had "mismanaged its portfolio of FE colleges" and told how it had obtained a £16m loan from the Department for Education in 2015 – to be repayable over two years through asset sales – but they did not conclude as planned.

The college then went on to receive three 'requires improvement' ratings and its position continued to deteriorate in 2017/18. It underperformed on a number of income lines against budget, and some costs had been reported wrongly; and when corrected it was clear the "deficit was much worse than they previously declared".

She added that the Education and Skills Funding Agency found costs of between £3-4m that were not identifiable from a straightforward reading of the financial reporting to the board and said: "The leadership team were asked to produce a revised recovery plan once the extent of the deficit was clear, which was examined externally and found to be unrealistic. Additional emergency funding of £4.3m was needed to enable the college to remain in operation, and the CEO and CFO left BMet shortly after."

The MP said BMet was "now consolidating under a new, more effective leadership team" but she added: "The prevailing feeling in Stourbridge is that there needs to be a proper inquiry into how this situation unfolded, who is responsible, and what actions should be taken to prevent such an occurrence in the future somewhere else.”

In his reply, Mr Davies said his education team was currently assessing the scope for a value for money study on the management of colleges’ financial sustainability and he added: "While its scope is yet to be finalised, the study may well cover several of your main concerns at a sector-wide level."

He has also asked his team to engage with the Education and Skills Funding Agency to establish in more detail the facts of the case involving BMet, which has retained 26 staff members out of 185 from Stourbridge College - with 145 transferring to Dudley College of Technology and Halesowen College; while 12 have taken voluntary redundancy.

Meanwhile - BMet was this week looking to hire a £40,000 a year finance business partner to provide a business partnering service to the college’s budget holders.

The job application says the "successful candidate will support the achievement of income targets and manage the provision of timely, relevant, and fit for purpose management information".