College finances improve after ‘period of stability’

Fewer institutions are expecting to operate a budget deficit in 2017-18, an AoC survey reveals

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Just 13 per cent of colleges expect to operate a deficit in 2017-18 and almost two-thirds of colleges have set a surplus budget, according to an exclusive new survey by the Association of Colleges (AoC) in partnership with Tes.

The survey paints a different picture to last year, when it revealed that, for 2016-17, a fifth of colleges were budgeting to operate a deficit, and nearly a third expected compulsory redundancies in the next 12 months.

Julian Gravatt, deputy chief executive of the AoC, said the improvement in the financial position of colleges had partly been down to the fact that there had been “slightly more stability from the government”. Restructuring costs were also having less of an impact, he explained.

The survey was not all positive news, however: the proportion of colleges expecting to make compulsory redundancies remained at around a third, and 56 per cent expected to restructure their workforce. Future funding levels were also the number one concern.

Apprenticeships could hold key

To improve their financial health, colleges either have to cut costs or increase income. And one area seen by many as harbouring major growth potential is apprenticeships.

The AoC survey, to which around a third of English colleges responded, showed that just over a third felt there had been at least some positive impact on their apprenticeship offer from government reforms. Meanwhile, 48 per cent believed that the number of apprenticeships their college offered would grow in 2017-18, compared with 2016-17.

This is an edited version of an article in the 2 June edition of Tes. Subscribers can read the full story here. To subscribe, click here. To download the digital edition, Android users can click here and iOS users can click here. Your new-look Tes magazine is available at all good newsagents.

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Julia Belgutay

Julia Belgutay

Julia Belgutay is deputy FE news editor for Tes