Further Education Bodies in England and Wales: Insolvency etc.
This Act establishes an insolvency framework for FE and sixth form colleges. Provisions on this are set out through seven chapters in the Act.
The first chapter outlines the contents of the other chapters on the insolvency regime measures, and provides relevant definitions of key terms.
Chapter 2 applies normal insolvency procedures to FE colleges in England and Wales that are statutory corporations, and sixth form college corporations in England. In doing so, it will allow insolvent colleges to be treated in a similar way to insolvent companies.
The third chapter provides restrictions on the use of normal insolvency procedures through its interaction with the education administration. It ensures that the Secretary of State and the Welsh Ministers are given notice of the use of those procedures and can then decide whether or not to initiate an education administration.
Chapter 4 creates a special administration regime for FE bodies, and sets out the main features of the regime including the special objective which is to avoid or minimise disruption to the studies of the existing students of the FE body.
Chapter 5 clarifies that trust property held by certain sixth form college corporations cannot be used by the education administrator to meet the claims of creditors in the event the corporation is wound up under the Insolvency Act 1986 and must instead be transferred to the trustees of the sixth form college.
The sixth chapter places restrictions on other dissolution procedures, by preventing FE bodies from taking action to dissolve the college where either normal insolvency or education administration procedures are already in train, preventing them from disrupting those procedures.
Chapter 7 amends the Company Directors Disqualification Act 1986 so that it applies to further education bodies that are statutory corporations.