GSM London goes bust, to stop teaching this September
GSM London, one of England’s biggest private higher education providers, has gone into administration after failing to recruit and retain enough students to stay afloat in what it describes as “highly challenging market conditions”.
In a statement last week, GSM London said despite having secured capital injections to the tune of £22 million since end-2016, an unforgiving higher education landscape made survival extremely challenging.
“The college has not been able to recruit and retain sufficient numbers of students to generate enough revenue to be sustainable,” it explained.
Formerly known as the Greenwich School of Management, the 1974-established GSM London owned by Clipper Group Ltd offered pre-university foundation courses, Bachelors’ and Masters’ degrees accredited by the University of Plymouth.
In late 2017, it was named in a BBC Panorama investigation on alleged abuse of the government’s student loan system. A subsequent inspection later cleared the college of wrongdoing but the institution’s enrolment numbers continued to suffer in the aftermath.
Within just a year, the for-profit institution lost 2,000 students, going from 5,440 students in the 2017-18 academic year to its current 3,500. According to Financial Times, GSM London’s accounts showed the private college made losses of nearly £10 million in 2017.
As enrolments continued to falter, the GSM Board decided to find a new owner to ensure the college’s longer-term future. But this failed too, leading to their decision to appoint administrators.
“Given the Board’s concerns over the future viability of the college, it became necessary to seek the protection afforded by a formal insolvency procedure,” GSM London explained.
“As a result, the GSM Board resolved to appoint administrators to GSM in order to provide a suitable framework to ensure, as far as possible, that all teaching obligations could be fulfilled until the end of the current semester and appropriate support provided to students to find alternative study options before the orderly wind-down and closure of the college.”
‘Marketisation of education’
GSM London is not the first higher education institution to suffer such a fate or to face financial difficulties. And looking at market conditions, it isn’t likely to be the last.
According to reports, nearly one in four universities in England were in deficit last year, increasing from 10 institutions in the 2015-16 academic year to 32 in 2017-18.
In fact, GSM London’s plight is just the latest real-life example of the kind of pressures facing education providers across the country as they struggle to stay afloat in an increasingly competitive marketplace.
Observers say the institution’s demise also raises questions over the government’s regulatory regime for for-profit institutions, following its push for a more market-based approach to higher education.
The University and College Union (UCU), the group representing university and college workers, urged the government to take a deeper look into what it described as a “funding free-for-all” among private providers.
“UCU has repeatedly highlighted concerns about the marketisation of education and the rapid increase in poorly regulated private providers,” said UCU acting general secretary Paul Cottrell in a statement.
“We hope that the government finally takes note and looks again at the funding a free-for-all among private providers who enjoy a competitive advantage in being under-regulated, but will always put profit before education.”
What’s next for GSM London
Those affected by GSM London’s imminent closure are 3,500 students and 274 staff members.
The institution said appointed administrators were working to ensure all tuition, classes and exams for the semester would proceed according to the current timetable. It also pledged to provide support for the students while efforts are made to provide them with options on where they could go to continue their studies.
“Discussions are underway with other higher education providers to identify alternative courses for our students and we will be supporting them in the application process,” the private college said.
“We have had enthusiastic responses from a number of London-based institutions and we will be able to provide students with more information on transfer opportunities in the next two weeks.”
A Department for Education (DfE) spokesperson said it was also working with GSM and other relevant sector bodies to ensure a smooth transition and support system for the students.
“We want a broad, sustainable market in higher education which offers students flexibility and a wide range of high-quality choices for where and what they study.
“Whilst the vast majority of institutions are in good financial health, the DfE and the Office for Students (OfS) have been clear that neither will bail out failing providers,” it said.