Details on what FE colleges will need to do if they are to avoid their funding being clawed back have been revealed for the first time.
The Scottish Funding Council’s main guidance on its critical outcome agreements has been published, as TESS can reveal this week that Scottish colleges were forced to give back a total of nearly £3.5 million from 2012-13 to 2014-15.
Regional outcome agreements set out the targets that colleges have to hit in return for government funding. If a region falls short of these targets during the life-cycle of an agreement, the SFC claws back a proportion of funding and redistributes it to other parts of the sector.
Colleges have long stressed the challenge of delivering on these targets as finances become ever tighter. They also warn that the threat of a claw-back leads to instability.
In the Guidance for the Development of College Outcome Agreements for 2017-18 to 2019-20, published this month, the SFC said that it would take “a holistic view of both good and unsatisfactory progress to arrive at its decision”, and that main funding recovery decisions on whether to claw back funds would be made in the spring of each year.
‘Best use of funds’
For the first time, the guidance also contains details on what the SFC board will use to inform these decisions, explaining that colleges will be measured against not only student numbers, but also the mix of provision, strategic investments or projects and “compliance with legislation, regulatory frameworks and good practice”.
An SFC spokesperson said: “Our wholesector approach makes the best use of funds, moving them to where they are most needed within any given year. This positive move will help the college sector to meet the changing needs of learners and employers across Scotland.”
However, Colleges Scotland called for an end to in-year “redistribution of funding”, saying that it significantly affected the financial position of colleges. Chief executive Shona Struthers said that Scottish colleges “would still like to see a move away from in-year redistribution”.
This, she said, would allow colleges the opportunity to plan financially in a more stable environment and to deliver the flexibility to meet demographic and employer needs, and better utilise the funding.
The current claw-back system operated by the SFC “can significantly impact colleges financially”, she added.
Figures provided by the SFC show that Edinburgh College alone has had £1,240,314 recovered for 2012-13 and 2014-15, while Ayrshire College has had to pay back £980,487 for 2013-14 and 2014-15.
West College Scotland, Fife College and Dumfries and Galloway College had a total of £601,939, £610,531 and £22,806 clawed back, respectively.
In all cases, the SFC states this was because of them delivering below target - but in some instances by a very small margin.
North East Scotland College is also listed by the SFC as having fallen below target in 2013-14 - although a commitment by the college to deliver the missing provision the following year meant that no funding had to be repaid.
‘Financial pressures’
Edinburgh College has faced significant financial pressures recently. The SFC said that, in acknowledgement of this, the recovery amount had been reduced for 2013-14, and a “special support payment” of £804,732, the amount to be recovered in 2014-15, was made to the college.
A letter from principal Annette Bruton to the Scottish Parliament’s public audit committee said that the college had worked closely with the SFC to ensure that while it achieved the right level of recruitment to match regional need, its board also had a “robust three-year plan towards balancing the college’s finances and future financial sustainability”.
Ayrshire College said that the SFC had agreed an increase of 13.5 per cent in provision in the first year of the merger which created the college. “We delivered 98.15 per cent of this increased target. In 2014-15, we achieved 98.8 per cent of our target and the SFC clawed back 1.2 per cent,” a spokeswoman explained.
“In 2015-16, while we delivered nearly 1.6 per cent over our credit target, we do not expect to receive funding from the SFC for this.”
