THE ASSOCIATION of Colleges has increased its budget expenditure dramatically for the next year in an attempt to reduce an estimated pound;400,000 surplus on its books.

The organisation is also facing a slow haemorrhage of senior staff. In the past year, seven out of 13 directors and operational managers have tendered their resignation. The exodus includes Marcia Roberts, director of professional services; Karen Moore, professional services manager; Catherine Raynor, employment law manager; Steven Gribble, director of management services; Annabell Rapley, recruitment manager and Cap Brown, conference manager.

One insider said: “This is all about individuals, not issues. Most have gone to much better jobs. People were feted under the old regime - the new style does not appeal to everyone.”

Their departures come as the AOC is keen to balance the budget and is under pressure from members to raise the profile of the FE sector.

According to the accounts, the surplus for the current year is pound;128,197, but it is likely to be nearer pound;400,000 when the books are finalised.

To balance the budget, certain areas of expenditure will rise accordingly including a salary bill increase of more than 40 per cent. Salaries will then constitute an estimated pound;1.3 million of the total pound;3.2m for the next financial year ending in July 2000.

David Gibson, the AOC’s new chief executive, said that staff will receive an across-the-board increment of 5 per cent. He added that certain senior members may earn more depending on their performance.

Spending on promotion and advertising will be boosted by 136 per cent and the budget for research projects into how the association can improve its efficiency will grow from pound;22,500 to pound;100,000, an increase of 344.44 per cent.

The AOC is almost entirely funded by college subscriptions which range up to pound;12,000, depending on student numbers. The rates have not been raised in three years. But members have reacted differently to the budget surplus.

Colin Flint, principal of Solihull college, said he was concerned by the surplus. He told The TES: “It would be good to be consulted on whether members wanted a wider range of services or a reduced subscription. Even more so given that we have to pay extra for the regional offices.”

Other principals feel that the last thing the AOC should be concerned with is “penny-pinching” on promoting the sector and described the surplus as irrelevant.

The 40 per cent salary increase is attributable for in part to a pound;180,000 contract for a curriculum advice and guidance helpline awarded to it by the Department of Employment and Education.

Mr Gibson said: “Not only have we won this contract but we have employed four people to operate the helpline and a further three people as regional coordinators. We are delighted that we have secured this money from the DFEE because it means that our members don’t have to pay for it.”

“We are really trying to open up this organisation and make it as transparent as possible,” said Mr Gibson.

The AOC is also battling against a row over pensions. Sources say that three senior members of staff have issued complaints under the association’s internal grievance procedures .

Mr Gibson confirmed that there was a “difference of opinion” over the pensions but that all concerned hoped the matter would be resolved internally. He denied that formal grievance procedures had begun but said that both sides were seeking advice.