Scottish Colleges ‘face new financial challenges’

Edinburgh College's Telford campus. Picture: Gareth Easton
Edinburgh College's Telford campus. Picture: Gareth Easton
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SCOTLAND’S colleges face financial challenges in the years ahead as a radical overhaul of the further education sector continues, a report has found.

An Audit Scotland report published today finds the finances of colleges are “generally sound”, but says institutions are unlikely to be able to offset a reduction in funding from the Scottish Government.

The study says colleges face an 11 per cent real-terms cut in their grant from the government between 2011-12 and 2014-15, with some regions facing larger reductions than others. A number of colleges are merging in an ­attempt to cut costs and refocus the sector on finding jobs for 16- to 19-year-olds.

Audit Scotland said there were 48,000 fewer people in college in 2011-12 compared with the previous year – a 16 per cent reduction. The overall number of students has fallen by about a third since 2008-09.

It also noted that the focus on younger students had the potential to limit opportunities for older people, and called for the sector to monitor the demand for college places.

“It is unlikely that colleges will be able to offset a real-terms reduction of 11 per cent by increasing their income from other sources,” the report added.

“Colleges’ income from these other sources, including EU funding, tuition fees and investments, fell by 10 per cent in real terms from 2008-09 to 2011-12. These other sources of income are likely to continue to decline.”

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While the report notes that colleges continue to operate within tight financial margins, it said the sector overall had reported a £2 million surplus in 2012-12, compared with a £29m deficit the previous year.

Caroline Gardner, Auditor General for Scotland, said: “Colleges will have to manage these funding reductions and changes in structure and status while meeting local communities’ demands for further education.”

Liberal Democrat education spokesman Liam McArthur said: “This report lays bare the impact of SNP cuts on Scotland’s colleges. In the space of one year there are 48,000 fewer student places, 1,000 fewer full-time equivalent college staff and five million fewer hours of learning being delivered.”

A Scottish Government spokesman said: “We welcome today’s report. It properly highlights the strength of the college sector, not least in financial terms … And the report confirms colleges are continuing to deliver our commitment to maintain student numbers with full-time equivalent student numbers remaining steady.”

John Henderson, chief executive of umbrella body Colleges Scotland, said: “There have been significant pressures on college budgets over the past few years, and the Scottish Government has taken welcome steps to reduce the scale of those challenges. Colleges have shown their flexibility, improving efficiency while protecting the quality of the student experience.”