Creation of ‘super college’ to break mergers budget

Edinburgh College – bringing together Stevenson, Telford and Jewel & Esk colleges – opened as a new institution on October 1.

The merger has already cost the Scottish Funding Council around £8 million, but now official documents show the final cost of the merger is expected to be around £17.6m, with around £10m due to be spent on severance packages to “rapidly” reduce staff numbers in a bid to make the new institution viable.

The Scottish Government set up a £15m “transformation fund” to speed up the controversial programme of mergers by paying for voluntary redundancy schemes.

But the figures for Edinburgh College suggest the process could cost tens of millions of pounds across the country.

The merger programme is designed to reduce costs and avoid courses being duplicated at colleges just a few miles apart.

The figures emerged as the SFC published the first set of “outcome agreements” which will require colleges to fulfil a series of commitments set out by the Scottish Government.

The outcome agreement for the Edinburgh College shows the new institution expects to see its income reduce by a quarter (£19m) in the period to 2015, which “will lead to a reduction in output and capability unless cash is invested to enable new ways of delivery”.

While the merger will see a 60 per cent reduction in management roles, there will also be a 17.5 per cent cut in teaching and support roles, with the equivalent of 240 full-time posts being lost by 2014.

John Henderson, chief executive of umbrella organisation Scotland’s Colleges, said: “The government is working from the position that part of the reason for this process is efficiency savings, but it’s probably going to take some time for that payback to come – it will take years to flow through.

“The £15m [transformation fund] was a one-off. Given the scale of the process, it’s inadequate. There’s a strong case for the funding council to be given additional money.”

A Scottish Government spokesman said: “A total of £25m is available to support colleges in 2012-13 in meeting the costs of mergers – £15 million of this funding has been provided by the Scottish Government through the College Transformation Fund and the remaining £10m comes from the Scottish Funding Council.”