AT first glance Scotland’s college sector would appear to be in comparatively sound financial health. But drill down into the figures and there are some troubling anomalies.
According to the latest published accounts some 17 out of 20 colleges recorded a technical or operational deficit in 2015/16, with just three in surplus.
Overall, when the full financial picture is examined and various components such as assets and pensions are taken into account, the picture is less gloomy, but again the devil lies in the detail.
Whatever figures are looked at, the inescapable fact is that some colleges are operating at the margins of financial security and some are much further beyond that and into troubling territory. Only last week, Audit Scotland reported three colleges to the Scottish Parliament because of fears over their finances.
Edinburgh College has a deficit of £7 million while Ayrshire, Dundee & Angus, Forth Valley, Glasgow Clyde, Inverness, New Lanarkshire and Perth colleges all recorded losses of more than £1m.
The encouraging news is both Audit Scotland and the Scottish Funding Council echo each other in their conclusion that Scotland’s college sector is by and large financially stable. But while the evidence points to most institutions managing their finances well, more than half of colleges are still in deficit to a total of £10m.
Given that the overall number of colleges forecasting deficits is increasing, it’s only right questions should be asked about the long-term financial sustainability of the sector.
These concerns come at a time when other pressures are also having a considerable effect. Public spending cuts and the mergers process have all impacted in one way or another on staffing levels, student places and the availability of courses and learning opportunities.
Then, of course, there is the current industrial action in the sector over a pay deal and terms and conditions for lecturers. It is imperative a resolution is found to that dispute. With that dealt with, the sector would be better placed to focus on the long-term sustainability of colleges and the worrying anomalies thrown up by the latest financial figures.
For its part the Scottish Government has to recognise the financial challenges colleges face, making available additional funding in 2017/18.
It points to the £6 billion it has invested in colleges since 2007 and a willingness to further demonstrate its commitment by increasing funding by £41.7m to £599m this year.
Nevertheless, the issue of increasing operational deficits remains a cause for concern across the sector. The measure of this concern is evident in the fact that even at this time of industrial unrest both Colleges Scotland, which represents principals, and the teaching union the Educational Institute of Scotland have spoken with one voice in demanding long-term financial security for colleges.
This sense of joint purpose is to be welcomed and is crucial if that security is to be put in place. Only with this provision will the college sector be fit to meet the challenges ahead and continue delivering the skills and training that individuals, employers and the economy need.
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