Cost of creating super college in Edinburgh breaks budget for all

THE creation of one of the country’s first “super colleges” is set to cost more than £17 million – breaking the total budget given by the Scottish Government for the mergers of colleges throughout Scotland.

The revelation has led to calls for the funding of the radical re-structuring of Scottish colleges to be increased.

The Scottish Funding Council (SFC) has already spent around £8m on the creation of Edinburgh College, through the merger of three existing ­institutions.

But documents seen by The Scotsman show the final cost of the merger is expected to be around £17.6m. More than £10m of that is needed for severance packages to “rapidly” reduce staff numbers in a bid to make the new institution viable.

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 sector is undergoing a major transformation after education secretary Mike Russell put in place measures to reduce overall numbers through a series of mergers, re-arranging colleges under 13 new regional boards.

The move was designed to reduce costs and avoid courses being duplicated at colleges just a few miles apart, with a £15m “transformation fund” set up by the Scottish Government to speed up mergers by paying for voluntary redundancy schemes. However, figures from the ­Edinburgh merger, which saw Stevenson, Telford and Jewel & Esk colleges join forces to open a new institution on 1 October, show the process could cost tens of millions nationwide.

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 for the process, otherwise it puts pressure on the teaching grant.”

While Scotland’s universities have had their level of funding increased, the amount of money colleges receive from the Scottish Government through the SFC is set to fall over the next few years.

Despite this, the SFC yesterday published individual outcome agreements for each of the country’s new college regions.

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 £10 million comes from the Scottish Funding Council.”