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Savings could exceed Pounds 20m

I can offer an alternative FE structure, involving only 13 colleges, the result of bringing together those serving the same area of the country. It is a crude model, but it does illustrate what could be done.

The first column of the table (right) lists the "new colleges". The second charts what their levels of student activity were in 1994-95, their outputs. The activity figures are the Student Unit of Measurement levels (SUMs) achieved by the individual colleges which form the new colleges. In other words, if three colleges merged, I have simply added the three levels of student activity together.

The third column shows what the actual grant-in-aid for the current financial year would have been had existing colleges merged to form the 13 new ones.

The fourth column goes one step further. It applies an efficiency factor - and a fairly modest one. The assumption is that mergers will lead to greater efficiency and cost-effectiveness, on the same levels of student activity. So I have worked out an imputed or adjusted grant.

Instead of simply talking funding levels as given, I have assumed that all colleges have cost levels the same as Aberdeen College, one which is the product of merger. I have no doubt that costs per SUM would have been higher in Aberdeen, had the city's three colleges not merged and rationalised.

Of course, had there been three colleges in Aberdeen, rather than one, there would also have been an adverse effect on central government funding for other colleges, in the period since incorporation. At least two of the colleges which formed Aberdeen would be swinging in the safety net, and that would have affected how much was available to the whole system.

The final column shows a total saving of just under Pounds 20 million in the funding of the system, equivalent to more than 8.5 per cent of the 1996-1997 quantum. I believe the saving could be much greater.

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