COLLEGES face “considerable challenges” and financial pressures ahead of a major transformation of the further education sector, a study has found.
Audit Scotland called on the Scottish Government to provide a “clear assessment” of how much a series of planned mergers would cost, with many institutions currently just about managing to break even.
Based on an analysis of colleges’ annual accounts for the year to July 2011, the report said the finances of Scotland’s further education institutions were “generally sound”.
However, it said the expected benefits and costs of the Scottish Government’s plans to overhaul the sector – reducing the number of colleges from 37 to no more than 23 – remained “unclear”.
The sector is undergoing a 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.
Caroline Gardner, the auditor general, said: “Most colleges operate to tight margins and there are major challenges ahead. The Scottish Government contributes around three-quarters of colleges’ combined incomes but this funding is set to reduce by around a quarter over the next three years. “The planned reforms have the potential to bring a more strategic and co-ordinated approach to the management of Scotland’s colleges at a national level, and more robust planning of college provision within regions. However, the Scottish Government needs to clarify the costs and benefits of regionalisation, including structural reform, how these benefits contribute to its reform objectives, and how the costs will be funded.”
According to the report, the level of support colleges receive from the Scottish Government is likely to fall from £545 million in 2011-12 to £471m in 2014-15 – a 24 per cent reduction in real terms.
John Henderson, chief executive of Scotland’s Colleges, said: “The report highlights that Scotland’s college sector is facing unprecedented financial pressure at a time of great structural change, within already existing tight margins.
“It is crucial colleges receive funds to support these structural changes and that money that should go towards learning and teaching is not affected.”
A Scottish Government spokeswoman said: “We have explained the need for our reforms and their objectives. However, we accept Audit Scotland’s recommendation and will provide a full assessment of the costs and benefits of reform in due course.”
Merger money
THE merger of Scotland’s rural colleges into a new institution has already cost at least £5 million, new figures show.
Figures obtained by The Scotsman show the Scottish Funding Council awarded the money for the merger of Barony, Elmwood and Oatridge colleges and the Scottish Agricultural College to form Scotland’s Rural University College (SRUC).
A total of £4.5m for implementation of the merger and a further £500,000 for an estate condition survey came from further and higher education strategic funds.
Last week, it emerged the merger of three Edinburgh colleges is set to cost £17.6m, more than the entire £15m “transformation fund” set aside for the plan.