Overview
As of 30 July 2019, GSM London Limited (“GSM”) – previously known as the Greenwich School of Management – has announced that it has been placed in Administration. Two partners from BDO LLP have been appointed as the Joint Administrators.
A statement on GSM’s website confirms that all teaching at its Greenwich and Greenford campuses will finish after the current semester, which is expected to be at the end of September 2019.
Options for students who will not complete their programmes of study by the end of the current semester are being explored. These include the opportunity to transfer onto courses provided by other London-based institutions. Discussions on this option are currently on-going.
Courses offered by GSM are validated by the University of Plymouth. Discussions on protecting students also involve the Department for Education (DfE) and the Office for Students (OfS).
Closure of GSM is expected to result in the loss of 274 jobs.
Background to GSM
GSM was established in 1971 and has 3,751 students. Students undertake a range of business-related degrees.
GSM is a for-profit provider and is owned by Sovereign Capital, a private equity group, with a number of other investments in the education and training sector.
Despite capital totalling £22M being injected into GSM since 1976, the College has been unable to recruit and retain sufficient numbers of students to remain financially viable.
The Financial Times notes that “GSM reported post-tax loses of £1.5M last year on turnover of £30.4M, and net liabilities of £9.6M”.
Since spring 2019, GSM had been seeking a new owner. The company’s statement, said that it had not been possible to achieve the sale of the business.
GSM has also been waiting a decision from the OfS as to whether it will be admitted to The OfS Register, enabling its students to continue to gain access to student loan funding.
Conclusion
The demise of GSM highlights one of the challenges currently facing many providers operating in the higher education sector. Not least the existence of an imbalance between the number of students seeking entry to first degree programmes, and the number of places on offer. GSM appear not to have been able to recruit and retain enough students to achieve an income level, which was sufficient to cover its costs.