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Little carries can on losses

The Scottish Parliament's audit committee has pinpointed management failure as a "significant factor" in the financial problems that have beset Inverness College. It holds John Little, the principal, personally responsible.

The committee issued a hard-hitting report on the college's shortcomings on Wednesday, but no more hard-hitting than a recent verdict from the Scottish Funding Council's FE development directorate (FEDD), which said failures were "catastrophic" and characterised the college's management as "dysfunctional, distant, disconnected and indecisive".

The audit committee's hearing in May into the troubles at the college was told that, such was the "disconnected" approach, the FEDD report had been given to the board of management but not passed on to Niall MacArthur, the finance director. Mr MacArthur has only been in post since March last year and the committee specifically absolves him of responsibility for the college's poor history of financial management.

Professor Little, principal since 2002, was reported to be moving to a new job with the University of the Highlands and Islands, although it later emerged he was on sick leave.

The acting principal is now Donald Leitch, who had previously been seconded from his job as vice-principal of Glasgow Metropolitan College to head the FE development directorate.

The audit committee concluded that Professor Little had failed to exercise proper financial and management controls, while the board of management had not fulfilled its scrutiny properly. MSPs accused Professor Little of withholding information from the board and said their findings underlined once again the importance of a national training programme for board members.

The committee also suggested that the funding council should have intervened to bail out the college at an earlier date, and it calls for clearer lines of responsibility and accountability between principals, boards of management and the funding council.

The funding council had flagged up its reservations about the running of the college last December and again in January when Roger McClure, its chief executive, wrote to Professor Little expressing "serious concerns about the competency of senior management, and the board of management's effectiveness in monitoring the college's executive".

Brian Monteith, who chairs the committee, commented: "This is the third time our committee has taken evidence from Inverness College on its poor financial performance. We remain concerned that key decisions about potential savings have not been soundly based and may not be achievable."

The committee began its inquiry after a report from the Auditor General for Scotland said that previous commitments to reduce the college's deficits were not going to be met. Deficits had spiralled to more than pound;5 million by 2000.

Forecasts of the college's financial position turned out to be close to accurate only in 2001-02 when it had a surplus of almost pound;1 million.

In 2003-04, a projected surplus of pound;94,000 turned into a deficit of pound;525,407. The following year, an anticipated deficit of pound;244,000 soared to pound;966,793 - almost exactly the reverse of its healthy position three years previously.

The college now says it will not be able to clear its accumulated deficits by 2009. It had previously pledged to do so by 2011, a lengthy time-scale which has also come in for criticism.

The audit committee is critical of the college's failure to stick to its recovery plan and of the way it dealt with the surge in demand for construction and care courses, a major factor behind the 2003-04 deficit.

One of the causes of these failures identified by the committee, acknowledged in evidence given to it by Ken Mackie, who chairs the college board, was that strategic decisions on key issues such as curriculum planning and marketing were not linked to financial and management information. Liaison between college departments was also poor.

Despite its travails, Inverness was said to be "not a failing college" by Mr McClure when he gave evidence to the audit committee in May. He pointed out: "Its retention of students, its number of part-time students, the numbers completing their course and the number of credits achieved by students are all above average."

Mr Monteith acknowledged that "it is a relief that, despite its financial problems, it is performing well academically and has much to be proud of".

It is not just financial forecasting with which Inverness appears to have problems. It has now reduced drastically the number of redundancies it says it needs to achieve the necessary savings - from 25 to four.

"We have achieved this through a good response to our offer of voluntary severance packages and through rearranging of hours and roles," a spokesman said.

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