A BASINGSTOKE college has been issued with a financial notice to improve after it was deemed to have “inadequate” financial health.

The notice was sent by the Education Funding Agency (EFA) in a letter to Ali Foss, principal at Queen Mary’s College, in November last year, after it was assessed as “inadequate” for the year 2014 to 2015.

The notice asked the college, in Cliddesden Road, to prepare a draft financial recovery plan and present it to EFA national director for the South, Alan Parnum, by January 19.

The EFA will now monitor progress throughout the first 12 months of recovery, to ensure that sufficient progress towards recovery is being made and agreed milestones have been achieved.

The college was asked to include in the plan student number projections, monthly cashflow projections to at least the end of July this year, income and expenditure account, cashflow and balance sheet projections and actions the college will take to manage expenditure and maintain or increase income.

Mr Parnum said in his letter: “If, in the EFA’s view, the college fails to take the necessary action (in whole or part) within the timescale set out, or if evidence of progress is not appropriate or not available, the EFA will take further action.”

Ms Foss, who took over the role of principal in September 2013, said the college owes £4.1 million in agreed loans, which have helped fund £29m of infrastructure projects, with the rest of the cash coming from Government funding, sale of land and the college’s own cash reserves.

Among the developments the money was used to fund were a £2m English and modern languages block in 1997, the £1.8m Queen Mary’s Sports Centre in 2003, the £13m Spectrum Building which opened in 2010 and the £2.1m Charles Butler Building for Music which opened last year.

Ms Foss blamed the notice to improve on a change to the “ratio between borrowing and income”. She said: “Since 2010 year-on-year funding has fallen sharply, and the college is proud that it has been able to sustain excellent examination results and healthy student numbers in spite of cuts of over 15 per cent across this period.

“The investments in infrastructure have allowed QMC to focus its spending on teaching and learning rather than on repair and renovation.

“One of the impacts of the reduced income has been to change the ratio between borrowing and income, and due to the accounting formula applied a financial notice has been imposed. The Education Funding Agency is aware of, and has expressed confidence in the college’s plans to address the deficit.”