Insolvency regime for further education and sixth form colleges

Part 2 of the Technical and Further Education Act 2017 (TFEA) introduces a new insolvency regime for further education and sixth form colleges in England and Wales. Perhaps its most notable feature is that it creates a special education administration regime (which can only be initiated by the relevant national authority), so as to avoid or minimise disruption to the studies of existing students of the further education body as a whole, and ensuring that it becomes unnecessary for the body to remain in education administration for that purpose.  

Achieving that objective (which the appropriate national authority can support by making grants or loans or giving indemnities to the education administrator or guarantees) include:

  • rescuing the further education body as a going concern;
  • transferring some or all of its undertaking to another body;
  • keeping it going until existing students have completed their studies; or
  • making arrangements for existing students to complete their studies at another institution.
Schedules 3 and 4 of the TFEA, which, together with Part 2,  come into force on 31 January 2019, make consequential amendments to the IA 1986 in respect of the conduct of education administrations for further education bodies which are statutory corporations and companies respectively.

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