The full impact of Scotland’s radical reform of further education, which led to more than 1,000 staff losing their jobs, remains unknown because systems do not exist to gather crucial data, a national audit of the sector has found.

Student representatives have attacked a “scandalous” lack of transparency, with nearly pound;100 million stored in “arm’s-length foundations” as staffing is cut and colleges struggle to support students from poorer backgrounds.

However, the report by Audit Scotland, Scotland’s Colleges 2015, finds that college finances are “generally sound”, changes have had “minimal negative impact” on students and staff reductions are not causing services to deteriorate on the whole.

Reform has led to “significant changes” in the sector and reduced the number of colleges from 37 to 20, but it remains “too early to fully assess how these will affect how colleges perform and the quality of learning, as many of the changes are still taking place”, the report says.

Follow the money

According to Audit Scotland, the costs and savings of the mergers, too, are “unclear” because of a lack of systems, both centrally and at individual colleges, to collect such information. “It is also unclear what progress there has been in achieving some of the wider benefits expected from the mergers,” the report states.

The organisation calls on the Scottish government and the Scottish Funding Council (SFC) to publish information on the costs of the mergers, and urges the SFC to provide a “clear and concise” annual summary of progress against “outcome agreements” - the new means of measuring colleges’ performance. It also advises the body to fine the colleges that fall short, with financial penalties having already been imposed on Edinburgh, Ayrshire, Fife and West colleges.

The report further highlights issues with staff numbers: these have fallen by 9.3 per cent - from 11,300 in 2011-12 to 10,250 in 2013-14 - and those who remain are concerned about increasing workloads and a loss of skills.

But it also notes evidence of the mergers having a positive effect, with reviews at Edinburgh, Glasgow Clyde and Angus colleges revealing “effective learning and teaching.which met the needs of learners”.

The report comes as schools and colleges are being encouraged to work more closely together than ever before. Following last year’s recommendations from the Commission on Developing Scotland’s Young Workforce, schools will be expected to work with FE colleges to help students learn skills for the workplace. The Scottish government has also committed to providing a place in learning or training for all 16- to 19-year-olds who have left school but have not been able to find a job.

Revenue funding in colleges since 2011-12 is expected to have fallen by 12 per cent in real terms by 2015-16. A “significant” decrease in capital funding should also be expected, according to Audit Scotland.

College finances continue to be “generally sound”, however, with a pound;95.2 million deficit working out as a surplus of pound;3.8 million after factoring in transfers to the arm’s-length foundations established as part of the FE reforms - although it is not guaranteed that all the money in these foundations will find its way back to colleges.

Gordon Maloney, president of the NUS Scotland students’ union, said: “All the good work that our colleges do, particularly for those from our most disadvantaged communities, stands at risk by them having to close their doors to new students, or individual students not getting the financial support they need, as a result of budget shortages.

“That’s why it’s unbelievable to hear that colleges built up, then squirrelled away, pound;99 million into arm’s-length foundations.”

He said the lack of transparency around the foundations was “scandalous”, and added that the prospect that some money might not be accessible by colleges “would be farcical if it didn’t have such serious consequences”.

Auditor general for Scotland, Caroline Gardner, said: “In the main, colleges coped well with substantial changes to the way they work.Many of the effects of the mergers are still taking place, however, and the sector faces continuing challenges.

“It’s important that the Scottish government and the SFC work with colleges to measure and publicly report on whether the reforms have delivered all of the intended benefits.”

A Colleges Scotland spokesman said the report underlined that colleges had “succeeded in delivering what had been asked of them on time, while maintaining sound finances and protecting the learner”.

An SFC spokesperson said it showed that the merger process had had “minimal impact on the quality of the learning experience for college students”. They added: “On reporting the impact of the recent college reform programme, we will, in future, draw on a variety of sources and bring them together to effectively describe costs and savings.”

A Scottish government spokeswoman said the rates of retention, completion and progression to university had all improved. “As with any reform programme of this scale, there remains work to be done to realise the full benefits.”

Shrinking student bodies

Student numbers in Scottish colleges have experienced a significant reduction, this week’s report confirms.

The Scottish government’s focus on full-time courses has led to a drop of more than a third in overall numbers since 2008-09. The biggest falls are in part-time students (a 48 per cent drop between 2008-09 and 2013-14) and mature students aged 25 or older (41 per cent).

Meanwhile, the reduction of funded college places for school pupils under 16 has contributed to a 71 per cent decrease in that age group, from 68,000 to 19,800.