Watchdog questions £50m college merger ‘savings’

A SPENDING watchdog has questioned Scottish Government claims about £50 million of savings associated with controversial college mergers designed to cut costs.

Nicola Sturgeon has entered row over Coatbridge College. Picture: Steven Scott Taylor

Holyrood’s Public Audit Committee said the Scottish Government and the Scottish Funding Council have not provided detailed figures to demonstrate the merger process – which has been plagued by official accusations of improper payments – has generated the promised efficiency savings.

Audit Scotland has identified six colleges where the way severance arrangements for senior staff were handled fell short of good practice.

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North Glasgow College and Coatbridge College demonstrated “significant shortcomings” in reporting and governance and there were shortcomings at four other colleges, auditors said.

First Minister Nicola Sturgeon recently entered the row over Coatbridge College, insisting she was “appalled” by the revelation that principal John Doyle and senior managers received an £850,000 pay off against the advice of the Scottish Funding Council (SFC).

The public audit committee heard how the staff colluded to “feather their own nests” and “deliberately withheld” SFC advice which called the payments into question. The committee has now raised concerns about the validity of efficiency claims regarding the entire college merger programme.

It has also raised concerns about the impact on staff and students, the accountability of Arm’s-Length Foundations (ALFs) and the handling of severance payments in the sector.

Committee convener Paul Martin MSP said: “We know that assessing costs and expected efficiency savings is a major challenge for mergers. The committee was assured by the Scottish Government that the lessons identified by the Auditor General from previous public body mergers had been learned.

“So it is disappointing that the Scottish Government and Scottish Funding Council (SFC) have not yet been able to provide detailed figures to demonstrate efficiencies. The £50 million figure for savings has frequently been referred to but we have yet to be convinced and we have sought clarity on the timescale for achieving this saving.

“Given the cost of the mergers and particular concerns around some severance payments made, we have asked the Scottish Government to provide greater detail on the merger costs and the achieved savings.”

A Scottish Government spokeswoman said: “As with any reform programme of this scale, there remains work to be done to realise the full benefits.

“This report and the one published recently by Audit Scotland (Scotland’s colleges 2015) are helpful in highlighting where improvements can be made.”