The number of staff employed in Scottish colleges has risen for the first time since a raft of mergers transformed the landscape of the country’s FE sector, according to a new report from Audit Scotland.

Full-time equivalent staff (FTE) fell by 9 per cent between 2011-12 - when the government announced plans to create college regions with larger, more efficient colleges - and 2013-14. However, this total increased by 5 per cent in 2014-15, as the changes continued to bed in.

In its report, published yesterday, Audit Scotland concluded that the overall financial health of the sector was “relatively stable”, but four colleges with underlying financial challenges were identified - Edinburgh, North Highland, Lews Castle and Moray.

In addition, the report noted that colleges did not have long-term financial plans that would help them to prepare for further financial pressures - including national collective bargaining.

‘Significant’ extra costs

Estimates by the Scottish Funding Council that the merger process had cost the sector almost £70 million did not include the costs of harmonising terms and conditions - the aim of the recently introduced national bargaining process - “which could be significant”, said Audit Scotland.

And while the SFC said there was an annual saving of more than £50 million from the regionalisation process, Audit Scotland said that it remained unclear how much of these savings were a direct result of efficiencies associated with mergers. Scottish government funding to the sector decreased by nearly a fifth between 2010-11 and 2014-15, the report shows. And although it was increased by 0.2 per cent for 2015-16 from the 2014-15 level, the total proposed allocation for 2016-17 represented, in real terms, a reduction of 1.4 per cent - or £7.9 million - from the 2014-15 level.

‘We acknowledge there are still areas where further work is required’

Despite the cuts to funding and the reduced number of staff, Audit Scotland stressed that the college sector had continued to exceed activity targets, and 82 per cent of college leavers were known to have gone on to a positive destination, with nine in 10 rating their college experience as positive. Staff feedback on the impact of mergers was mixed, however, with both teaching and support staff raising concerns.

Caroline Gardner, the auditor general for Scotland, said that Scotland’s colleges were now operating in a different environment, which had presented several challenges. “While the sector has exceeded learning targets and maintained relatively sound finances, managing the ongoing impact of reform alongside further change and financial pressures will be a complex and demanding task for colleges,” she said.

“The Scottish government, the SFC and colleges need to work together to improve their understanding of the demand for college courses across the country, and create long-term plans for how they will commit finances and staff to meet future need.”

Funding ‘uncertainty’

Martin Fairbairn, chief operating officer and deputy chief executive of the SFC, told TESS that colleges’ financial situation depended, first of all, on their expertise in managing their finances. “We are reasonably confident that this is suitable and effective,” he said.

“The other factor is future UK and Scottish government funding, and that is, at the moment, something that is uncertain.”

Shona Struthers, chief executive of Colleges Scotland, said: “The context within which college mergers were implemented was complex. The college sector, however, is not complacent and we acknowledge that there are still areas where further work is required. We are committed to working with the SFC, Scottish government and other key stakeholders to continue progress.”

Shirley-Anne Somerville, Scotland’s minister for further education, higher education and science, said the government was proud of its strong track record on colleges. “In a tight financial context, we continue to prioritise investing in colleges and supporting college students. Our 2016-17 budget protected college resource funding at £530 million and we are providing £106.2 million in grants for students. Clearly, we are entering an even more challenging financial climate, which makes the need to deliver real value for money across all of FE and HE an imperative.”