What happened when we investigated the college sector?

If a college is struggling, who has a right to know?

During a January meeting of Holyrood's Public Audit Committee, MSPs took evidence from the Scottish Funding Council (SFC) about the financial state of Scotland's colleges. As multiple members pointed out, it quickly became apparent that the sector is struggling.  

When questioned, Chief Executive Karen Watt admitted that, while the SFC was engaging regularly with many colleges on their finances, they were focusing on "four colleges that have what we would consider to be fairly significant cash-flow issues."

Because the SFC and the government "do not have a significant amount of strategic funds at our disposal," she said that the approach to each college involved a range of options – from loans or cash-flow support to suggestions that colleges consider structural changes or partnerships.

MSP Graham Simpson asked Ms Watt for the names of the four colleges, but she declined to provide them, saying that the sector is dealing with "sensitive staffing issues that might play out in different ways. At this point, it might be difficult for those colleges to maintain the kind of engagement that they are having with us."

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Those staffing issues have escalated into multiple rounds of strike action, a results boycott across the college sector, and targeted strikes in the constituencies of key decision makers. College lecturers and support workers have been chasing a raise since 2022, while college leaders have been chasing better funding from the Scottish Government. 

Neither appears imminent.

A quick glance at the SFC's most recent Financial Sustainability of Colleges in Scotland report shows multiple institutions running expected deficits, and no four clearly stand out. To this end, we submitted Freedom of Information (FOI) requests to the SFC to identify the four colleges facing "significant cashflow issues", and to explain their criteria for evaluating colleges. 

During the January session, Mr Simpson had also asked about a rumoured "risk register" of colleges. In response, Ms Watt said that the SFC "[does] not talk about a risk register; we talk about the nature of the engagement framework that we have."

In the SFC's response to our FOI request, they also denied keeping a risk register. Instead, they described how they monitor college financial returns to determine how to work with each.

"The level of engagement depends on the institution’s performance, financial position and governance with heightened monitoring and support focused on those institutions requiring a higher level of engagement."

And yet, when asked for the criteria for each college's risk level, the SFC refused to release "information relating to financial monitoring of colleges."

A screenshot showing FOI exemptions applied by the Scottish Funding Council (Image: The Herald)

They based the refusal on the grounds that publicising the information could "undermine SFC’s financial monitoring and advisory roles because colleges would be less likely to engage with SFC."

The SFC also refused to release the names – or any related communications – of the four colleges that have been the target of heightened engagement. Again, they claimed that naming the colleges publicly would make it less likely that colleges would engage with them in the future. Essentially, the concern was that the SFC would not be able to do its job if the public knew which colleges were struggling.

The SFC claims that releasing information could 'undermine' its monitoring and advisory roles (Image: The Herald)

College finances are public information. The SFC itself publishes regular updates on financial health across the sector, including each college's surplus and deficit. With this in mind, we asked the SFC why its internal methods for categorising college finances run the risk of undermining its authority.

Are colleges unaware of how they are being assessed? And if publicising the names of colleges that are struggling might cause them to stop engaging with the SFC, then who carries out the oversight?

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In response, a spokerson said that colleges are aware of what information they need to provide to the SFC, but that the SFC does not disclose confidential commercial information. This includes colleges' financial forecasts, which are fluid and "could result in undue or inappropriate speculation". 

Despite this, something about four colleges' finances – either the publicly available information or the confidential forecasts – has caused enough concern that it was discussed openly in Parliament. 

As Ms Watt said on the day, this has the SFC discussing a range of solutions, "whether that is a fundamental part of their underpinning business plan that needs to be looked at again" or something more minor.

The spokesperson added: "Disclosing the names of those colleges facing significant cashflow difficulties could result in undue or inappropriate speculation on the financial performance of individual colleges which could impact negatively on learners and staff.

"It could also hamper college boards in their efforts to implement a recovery plan."

A spokesperson for the Scottish Government confirmed that the Scottish Funding Council "has oversight of governance and financial accountability in Scotland's colleges to ensure compliance with institutions' statutory and other obligations."

The colleges themselves will be aware of their situation. But if a publicly-funded employer is giving its financial overseer cause for concern, do employees and students have a right to know?

What happened at the 'extraordinary' meeting of college leaders?

In response to lecturer’s decision to engage in industrial action short of a strike – specifically, a resulting boycott – colleges started to issue threats about pay deductions that, in some cases, would be set at 100% of salaries. In effect this meant that college principals were rejecting a form of action that has less impact on students, with all teaching and assessment still taking place, and instead demanding full blown strikes.

It was a remarkable development, and one that had to have a story behind it.

Lecturers from around the country started to send us the letters they had received from their employers, and although there were some notable differences there were also such obvious similarities that we began to suspect that a template or core form of words had been provided to colleges, with individual institutions then making adjustments as they saw fit.

We soon discovered that a major meeting had taken place at which the various leaders of Scotland’s colleges had agreed on some sort of collective position. The event had been hosted by College Employers Scotland (CES), which describes itself as a ‘representative body for the colleges as employers’, but very few details of the discussions were available.

Within days of our reporting, colleges has started to soften their stance, but the damage was done - the handling of this latest stage in an increasingly acrimonious dispute caused a great deal of confusion and only worsened the conflict engulfing Scotland’s colleges.

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In an attempt to clarify the situation, we asked CES to release the shared text that had been agreed at the meeting of principals. The organisation refused to do so and told us to submit a Freedom of Information request, which is exactly what we did. It didn't go very well.

We now know that the “Extraordinary College Employers Scotland Meeting” took place on 6 February at the CES offices in Stirling. On the agenda were discussions about ongoing pay claims, job evaluations, facilities time for union representatives and ‘the value of national bargaining’.

The official agenda of the College Employers Scotland meeting (Image: The Herald)

We also know exactly who attended the meeting, and can confirm that at least one representative from every college in Scotland took part.

The full list of attendees at the College Employers Scotland meeting (Image: The Herald)

Beyond that, however, we know almost nothing, because CES wants to keep pretty much every single piece of information a secret from the public.

We asked them to release a copy of all briefing materials prepared or shared in advance of the meeting, as well as the minutes of the meeting and any notes taken throughout. Furthermore, we requested copies of communications discussing the meeting, including those regarding any agreed actions or outcomes.

And, of course, we submitted a formal request for the agreed form of words provided to colleges – the one that sparked the whole controversy in the first place.

In response to our request, CES has provided copies of the briefing materials prepared for the meeting, but in an almost entirely redacted form. They have given three separate reasons for doing so: that disclosure would, or would be likely to, inhibit the free and frank provision of advice or the free and frank exchange of views; that disclosure would, or would be likely to, prejudice substantially the effective conduct of public affairs; and that the material “is subject to legal advice privilege”.

As a result, it is so far impossible to know what advice college principals were given, or even exactly what they were discussing, during the ‘extraordinary’ meeting at which the response to industrial action was being developed.

A selection of heavily redacted documents from the College Employers Scotland FOI response (Image: The Herald)

When it comes to the minutes of that meeting, CES stated that there are none, before immediately clarifying that there is in fact “a draft Minute”. This, however, will not be approved until the next meeting of the CES, which is not due to take place until the beginning of May.

While a copy of the draft minute was issued, CES has redacted the details on the basis that releasing them “would, or would be likely to, prejudice substantially the effective conduct of public affairs.” They insist that this decision is correct because “the public would be best served withholding this information as it is in the public interest that public bodies are not obliged to expose themselves at risk by disclosing unapproved Minutes.”

Redacted draft minutes from the College Employers Scotland meeting (Image: The Herald)

CES also refused to release copies of the notes taken during the meeting, claiming that they are “exempt from disclosure” because publication “could have unjustified adverse effects on the author and therefore it would be unfair to disclose them.”

Redacted personal notes from the College Employers Scotland meeting (Image: The Herald)

A decision was also taken to refuse our request for copies of communications regarding the meeting, with CES claiming that it would cost more than £600 to “locate, retrieve and redact” the information in their own systems. Even if the costs of disclosure do exceed the statutory limit, public bodies have the option to nonetheless release the information in the interests of transparency. CES has refused to do so. The organisation had previously attempted to have The Herald narrow the scope of the request.

As for the agreed text that was shared with colleges, and which became the basis for the letters sent by employers to teaching staff, CES confirmed that it does exist, admitting that it had been “drafted by and in consultation with Thorntons”, one of Scotland’s largest legal firms. They have also refused to release it.

In their response, they claim that the text “was shared on a confidential basis, thus maintaining its privileged status.” Their justification depends on an exemption in Freedom of Information laws covering the provision of legal advice to clients. The same claims have been applied to communications regarding the text.

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Responding to our story, Gavin Donoghue, Director of College Employers Scotland (CES), said that CES is “committed to being as open and transparent as possible when responding to Freedom of Information (FOI) requests.”

“On this occasion, however, the information requested concerned a meeting that was held to discuss sensitive matters pertaining to live, ongoing pay negotiations between CES and trade unions.

“It is vitally important for CES to be able to communicate freely with colleges, and trade union representatives, on issues relating to national bargaining and industrial action, especially when these impact on the spending of public funds.

“After considering detailed legal advice, we concluded that releasing some of the information requested was likely to inhibit the free and frank exchange of views, or substantially prejudice the effective conduct of public affairs. For this reason, we decided it was in the public interest to redact some of the information. Any information subject to legal privilege was also redacted.

“Our reasons for sharing, or not sharing, the information have been clearly set out in our response to the FOI request. The requester has subsequently asked for an internal review of our decision, which we are now undertaking.”

Where do we go from here?

Despite our best efforts, the decisions of the Scottish Funding Council and College Employers Scotland mean that our questions about the financial health of colleges, and their handling of the dispute with teaching staff, remain unanswered.

As things stand, we know that there are major concerns about the future of four specific institutions, but we cannot tell staff and students which colleges are in such serious trouble.

We also know that Scotland’s colleges collaborated with one of the country’s most prominent legal firms to produce a document that, in the most extreme cases, was used to threaten staff with 100% pay deductions, but we cannot tell you what the document said or provide any further insight into the discussions that were held around it.

But that doesn’t mean we are giving up.

All of the FOI rejections have been appealed, giving the SFC and CES a further twenty working days to consider their refusal to release the material in question to the public.

A Scottish Government spokesperson told The Herald: “Despite the most challenging financial situation since devolution, the 24-25 Budget allocates nearly £2 billion to universities and colleges, supporting their delivery of high quality education, training and research.”

And yet, there is absolutely no indication that the crisis in Scotland's college sector is likely to be resolved any time soon.

A lack of clarity over the financial situation in different colleges, or the way in which principals are handling the ongoing industrial action affected further education, isn't going to make things any better.

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