But Why is Everything So Fragrant in the FE Garden in Scotland?

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There is good news for the Further Education Colleges of Scotland now, as their improved financial health was lauded by organisations north of the border.

However, concerns remain on the part of those involved in the sector as to whether this improvement is actually due to better funding provision or simply down to improved financial management. This emerged from the report issued by the Scottish Parliament’s Audit Committee, which was based on an investigation of the accounts of three FE Colleges; West Lothian College, Inverness College and Lews Castle College in Stornoway.

The Audit Committee found some disturbing instances that the financial picture was not as good as it appeared at first glance, and raised a number of concerns regarding both the colleges” performances in meeting the funding / budgeting requirements and the Scottish Parliament’s Scottish Further Education Funding Council (SFEFC) decisions in allocating extra funding.

Each College in Turn

In the case of West Lothian College, their funding problem began after a change in Scottish Executive policy meant the college stopped being funded to support the number of students anticipated when the contract was first negotiated. There is a fear that the College could be staring at an £11 million deficit over the next 20 years. Thus the college were faced with a shortfall in meeting the costs of a private-finance contract for a new campus for these extra students. The SFEFC was forced to intervene with supplementary funding.

The picture in Inverness was on which concerned the Audit Committee. In 2003 – 2004, Inverness College revealed a deficit of £526,000, in spite of anticipating a surplus of some £94,000. The College stated that this financial disparity between the expected and the result ““ amounting to £620,000 ““ was due in part to higher staff costs and partly due to unexpected costs from certain courses being more in demand than anticipated. The Audit Committee are seeking assurances that the College will be better equipped to predict demand for courses in the future.

The last of the Colleges considered for this study, Lews Castle College in Stornoway, suffered a deficit for 2003 ““ 2004 of £358,000, due to the remote location of the college. This, as a geographical rather than a budgetary matter, merited extra support by the SFEFC; however, the Committee expressed its reservations concerning this practice, questioning whether the money might be taken from other colleges with a less remote location but just as valid a need for the funding.

Holyrood Concerned

There were also concerns expressed over the future of the University of the Highlands and Islands. The committee felt that there is a lack of clarity on extra costs incurred by colleges running courses as part of the University. Obviously, these matters will be addressed, and the convener of the Audit Committee, Brian Monteith MSP, called for more clarity in accounting.

“We welcome the fact that the finances of colleges across the further education sector have improved significantly over the last three years,” he said. He went on to warn that the committee will be paying close attention to this area in the future: “However, whether this is due to better financial management or increased funding remains unclear. We shall continue to monitor the progress of colleges in improving their finances.”

Jethro Marsh

Clearer accounting? Account for yourself in the FE Blog

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