Tier 4 publicly funded college mergers and immigration issues

In the course of merger transactions we are working on for a number of Colleges we identified and raised with UK Visas & Immigration (‘UKVI’) a number of potential immigration issues (see below) for publicly funded colleges that hold a Tier 4 Sponsor Licence, as  these issues could have easily been deal-breakers for many Further Education mergers.

We are pleased to report that as a result of our immigration team’s correspondence with UKVI, the latest Tier 4 Guidance for Sponsors – Document 2: Sponsorship Duties (the ‘Tier 4 Sponsorship Duties Guidance’) has been changed to specifically deal with ‘publicly funded college mergers – licensing and educational oversight requirements’.

Immigration issues

Where a college that is merging has a ‘requires improvement’ Ofsted rating and the continuing publicly funded college has a ‘good’ or ‘outstanding’ Ofsted rating the issue was whether  the continuing publicly funded college would be able be maintain/gain the required Educational Oversight rating from Ofsted post-merger (at least Good).

According to UKVI’s previous guidance, the position was that the continuing college’s Sponsor Licence would have been made a “Legacy Sponsor” on merger (due to the ‘requires improvement’ Ofsted rating of the other college, even though that college would dissolve). This would have meant the continuing college, would therefore not be allowed to sponsor any new students, giving rise to a loss of future income.

To make matters worse, the Further Educational and Skills Inspection Handbook (para.15) provides that, where a college merger has taken place, any rating from the predecessor college will not be taken forward. All merged colleges will be viewed as ‘new’ colleges and will have no inspection grade until after a full inspection (this will normally be done within three years of the merger). On UKVI realising this, their initial response was that even if both colleges were graded as Good, the licence would be lost. Therefore a merger would mean that a post merger college could not accept new overseas students until it received a fresh post merger grading.

Changes to publicly funded college mergers guidance

The Tier 4 Sponsorship Duties Guidance now  confirms that if a Tier 4 Sponsor has the required Educational Oversight grade/rating (for publicly funded colleges the rating is ‘Good’ or ‘Outstanding’) and is involved in a Type B merger, whereby it is taking over another college, (i.e it remains and is not the dissolving college) it will meet UKVI’s Educational Oversight requirements as long as the required Educational Oversight grade/rating is maintained and/or until the merged college achieves one of the required ratings following a statutory education inspection (or a Tier 4 Educational Oversight inspection, if this is required).

This is an important clarification for Tier 4 publicly funded college mergers as the changes to the Tier 4 Sponsorship Duties Guidance are now in line with the Further Education and Skills Inspection Handbook and will no doubt provide comfort to colleges moving forward with mergers.

If you would like to discuss any of the issues raised in this article, please contact Chetal Patel (Senior Associate, Immigration). 

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of April 19, 2017.