MSPs push funding quango for greater transparency on colleges in crisis
The Scottish Funding Council has said four colleges face insolvency in the next year - but will not name which ones
MSPs have pressed funding quango bosses for greater transparency over four colleges facing financial collapse.
Senior members of the Scottish Funding Council (SFC) gave evidence to Holyrood’s Public Audit Committee on the future of the further education sector.
When asked to name four colleges earmarked as facing insolvency by 2027, the SFC’s finance director refused to give details.
Committee convenor Neil Bibby has now written to the funding body demanding it is open about the specifics.
Mr Bibby a Scottish Labour MSP, said: “Our colleges are vital to supporting Scotland's economy with skilled workers and students with opportunities to learn.
“The government must ensure they are financially viable so colleges can continue this work.
“Public money requires public scrutiny and full transparency around the financial risks facing our colleges is vital.
“It is important to fully understand what has led the four colleges to this position and what is being done to save these institutions.”
The Scotland’s Colleges 2026 report details that, as of April this year, eight of Scotland’s 25 colleges were financially at very high risk, with a further six colleges assessed as at high risk.
A further four of those are at risk of financial collapse.
Mr Bibby said his committee may wish to call the colleges to parliament to give evidence about their financial situation.
The committee also asks which colleges the SFC considers might be close to falling into that category.
In evidence, the committee was told that in 2014 colleges had cash reserved of £100 million but that figure is now zero.
The sector has been funding “unaffordable inflationary pressures” such as pay deals by using up cash reserves with four predicted to run out of money by summer 2017.
Tiffany Ritchie, Director of Finance at the Scottish Funding Council, was pushed during the committee hearing to name the four at-risk colleges.
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She said: “I'm happy to discuss the sector-wide risks. As you'll appreciate, there's a balance.
“We are committed in SFC to getting as much information in the public sphere as we can about the risks the tertiary system is managing, but for commercial reasons, we try not to name the colleges and wouldn't propose to today.”
She went on to say individual institutions are managing negotiations with lenders and dealing with legacy debt “so their relationship and their confidence from the banks is vital”.
“They are also engaging with suppliers and others and it's a very dynamic picture,” she said.
In a letter to Paul Devoy, the SFC’s Interim CEO, Mr Bibby writes: “Further to this morning’s meeting and evidence from yourselves and Scottish Government colleagues, the Committee requests the names of the four colleges said to be facing insolvency.
“While we note the points made about the issue of legacy debt and supplier concerns, the Committee considers that the principle of transparency must be paramount to enable the full scrutiny of publicly funded organisations.”
MSPs were told that cash advances risk becoming “unrecoverable bailouts” should the colleges fail.
Colleges have increasingly required cash advances from the SFC to stay afloat.
Mr Bibby’s letter adds: “In terms of cash advances, the Committee would also welcome further information on what ground rules the SFC apply to determining the exceptional circumstances when deciding whether to issue cash advances to colleges for more than one year in a row.”
The SFC has been given until November 18, 2026 to respond.
The Scotsman contacted the funding council for comment.
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