Santander lays the groundwork for local skills provision
Santander provided a firm foundation for an ambitious set of construction plans.
- Sector: Education
- Oldham College is a further education provider focused on vocational skills and thus benefits the local employment market. It also competes with other colleges to attract students.
- The college develops courses that match the skills requirements of local employers, but the college needed £10 million to update its facilities.
- Oldham College selected Santander following a tender process that involved criteria based on rates, terms, sector knowledge, and a willingness to contribute to college life.
- Santander made it easy for the customer to understand the more technical aspects of the deal by building a good rapport and provided two rolling credit facilities that will convert into Business Loans upon completion of the project – a product that was specifically chosen as a result of a thorough understanding of the sector and the college.
- One of the new buildings has now opened and the other two are due for completion early next year, while Santander are currently looking at ways in which the bank can further benefit campus life.
- The new Santander-funded facilities will enable Oldham College to invest in the future by continuing to support local employment and attracting students from across Manchester and beyond.
Oldham College provides vocational education to students of all ages, and as such plays a vital role in ensuring the availability of skills required by local businesses. With an ambitious construction programme now underway, the college aims to maintain the excellence of its education and training courses with state-of-the-art facilities, and Santander have played a key role in supporting this transformational refurbishment project.
As Vice Principal of Strategy and Resources at Oldham College Andrew Harrison explains, further education colleges compete with each other to attract students from beyond their immediate catchment areas.
“We have a broad range of courses running,” he says. “From those that meet an immediate need – such as hair, beauty, accountancy, and construction – but we also identify areas where new skills are needed across Greater Manchester. For instance, in the burgeoning digital and creative industries, particularly around MediaCityUK.”
However, the college’s ability to meet both its catchment and course targets were hampered by the poor condition of its buildings on campus. “They were mostly ‘60s-built and in very poor shape,” says Andrew. So the college laid plans for a construction programme driven by a dual objective. “We needed to improve our buildings, but we also needed to create specialist facilities to support our courses,” he adds.
A demanding tender
The college drew up plans for three new sites: a learning centre with 28 classrooms and community spaces located close to the town centre; a commerce development (housing Hair & Beauty, Travel & Tourism, Sport, and Uniformed Public Services); and a “Digital & Creative Career College,” (complete with cutting-edge equipment including 3D printers). But at £7 million, £6 million and £9 million respectively, the cost of this development exceeded Oldham College’s available finance. Although some funding was available from the Skills Funding Agency, around £10 million in bank finance was still required. “We ran a tender,” says Andrew. “What we were looking for was cost, but we also wanted to work with a bank that really understood the education sector.”
“We were borrowing a lot of money and it was a momentous decision for us,” he says. “We got all the banks to present and we asked them not only about rates and terms but also the extent to which they would be prepared to contribute to college life.”
The elements of a successful deal
Santander won the tender not least because of its approach to the deal. “They were very enthusiastic about our plans,” says Andrew. It was an enthusiasm that reflected Santander’s experience as a lender in the education sector. As Relationship Director Gareth Jones recalls, Santander was immediately impressed by the management team’s success in building the reputation of the college and attracting more students. “We could see that they were doing a great job in taking the college forward,” he says. “The building programme was a logical progression on that success curve.”
Oldham’s managers also appreciated Santander’s willingness to be flexible. “The bank was prepared to accommodate us when we said we wanted to forward fix the interest rates for a period,” says Andrew. Equally important, the Santander team made a complex deal simple to comprehend. “They made it very easy for us to understand some of the more technical aspects of the deal,” he adds. Gareth believes the rapport he established with the Oldham managers was another important factor in securing the deal. “We are always prepared to listen,” he says. “I think the team at Oldham appreciated that.” The rapport was enhanced by the bank’s sector knowledge. “We wanted a bank that was familiar with the realities of the further education sector,” says Andrew. “That meant we didn’t have to spend time explaining things."
As a further demonstration of its commitment to Oldham, Santander is in discussions about how the bank can best play an ongoing role in college life – potentially through mentoring or guest lectures for students.
Santander funding for the construction project was released in the form of two Business Loans, valued at £6 million and £4 million respectively, each allowing the college to draw down credit as the construction work progressed and converting to term loans upon completion.
With funding now on board, the Digital & Creative Career College opened this month in an existing building. The new building is due to open early 2015, as is the new commerce development.
A boost for local jobs
“The funding from Santander has enabled us to invest in the future,” Andrew says. The development of facilities will enable Oldham College to fulfil local requirements, ultimately helping to improve the local jobs market and boost employment.
Once completed, the construction project will enable Oldham College to not only maintain its ambitious standards but also extend its reach across Oldham and beyond. “We are setting out our stall for students from all over Greater Manchester,” says Andrew.
All lending is subject to status.
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Relationship Director Comments
The key to our success with the College, I believe, was an open and honest dialogue from the start, with the bank listening to the management team’s requirements and structuring a lending facility that covered everything.