MOST of Scotland’s colleges face “recurring financial deficits” within four years, as they struggle to find cash and keep their buildings safe, spending watchdogs warn today.
Audit Scotland said there was a “widening gap” between income and spending across the sector, with a 1 per cent rise in state funds this year barely covering a staff pay deal.
Meanwhile capital funding to repair buildings and infrastructure “will fall short of the estimated costs of maintaining the college estate”.
Capital funding is £21m this year, despite colleges saying they need £22m for maintenance costs alone, plus another £77m to tackle a “high-priority backlog” of repairs.
This poses “a potential risk to some colleges’ ability to continue to deliver their core services in a safe environment”, the watchdogs said.
Opposition parties accused the SNP government of underfunding further education.
Audit Scotland said 12 of the 20 major colleges now forecast recurring deficits by 2022-23, only two of which had identified specific plans to address the problem.
Of the 10 without plans, six forecast a deficit position by the end of the next academic year.
Inverness, North Highland and West Lothian forecast deficits from 2018-19, while Forth Valley, Glasgow Clyde and Glasgow Kelvin colleges forecast deficits from 2019-20.
In its report, Scotland’s Colleges 2019, Audit Scotland said three colleges faced “particular challenges” with their finances - North Ayrshire, New College Lanarkshire and North Highland College - with the first two needing extra cash to pay for voluntary redundancies.
Audit Scotland said Scottish Government revenue funding for colleges was £606.5m in 2019/20, compared to £588.9m in 2018/19.
Despite student numbers rising 6750 to 242,500 in 2017/18, the sector “exceeded its activity targets”.
However some future targets, including closing the attainment gap between rich and poor students, were “very challenging”. The aim of delivering 20% of credits to students from the most-deprived 10% of areas by 2020/21 “looks difficult to achieve”, though partly because more students go to university.
Auditor General Caroline Gardner said: “Colleges are increasingly dependent on public funding to cover their costs, and it is likely the gap between their income and spending will continue to widen without action.
“Tighter budgets make financial planning even more important. Colleges and the Scottish Funding Council need to do more to ensure they are as well-prepared as possible to deal with ongoing pressures.”
Tory MSP Liz Smith said Audit Scotland’s report was “a major wake-up call for the SNP”.
She said: “It makes very clear, yet again, the extent of the financial difficulties facing the college sector under the SNP.
‘It tells us the gap between colleges’ income and expenditure is widening with the prospect of that worsening in the years ahead and that the college estate needs maintenance well beyond the current government spend.
“At a time when the attainment gap is also increasing, that places huge pressure on colleges to deliver the quality of education students and staff have a right to expect which is a major wake-up call for the SNP.”
Labour’s Iain Gray said: “Yet again Audit Scotland lays bare the SNP’s failure to support our colleges. The financial problems faced by Scotland’s colleges under the SNP’s systematic underfunding is set to deepen in the years ahead. “The Government has failed to allocate the funds necessary to maintain the college estate. It is no wonder that colleges are far from reaching attainment targets when they clearly do not have the resources to do so.
“Meanwhile colleges still have 120,000 fewer students than when the SNP came to power.
“This is less an audit and more an indictment of the SNP Government’s failure on colleges.”
LibDem MSP Tavish Scott MSP said: “No wonder the sector is facing serious financial challenges when they have had to deal with SNP ministers plundering college budgets.
“Tens of million in cuts to college budgets and the loss of 140,000 places since the SNP came to power has fallen particularly heavily on people looking to retrain, women, carers and others more likely to study part time.
“Rather than chatter on about independence, the Scottish Government should be focused on repairing the college sector, giving the economy the skills it needs and enabling everyone to get on in life.”
Further Education Minister Richard Lochhead said the government had invested more than £7bn in colleges since 2007, including £810m in capital projects.
He said the Scottish Funding Council was helping colleges with medium and long-term financial planning and providing support as required.
“We are also working with the sector to diversify income streams. The SFC will produce a medium term capital investment strategy for the college estate which will provide valuable evidence to determine future investment.”
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