Bail-out stopped college closure;FE Focus

27th February 1998 at 00:00
Clydebank College would have faced closure if the Scottish Office had not stepped in with a loan. The pound;934,000 deal, which was revealed in The TES Scotland last week, will tide the college over only until the end of the financial year in March and will have to be repaid out of the Government's 1998-99 grant, we have learnt.

The Scottish Office intervention came after talks with the college's bankers about a pound;1.9 million overdraft facility broke down.

The loan is payable on condition that an independent report is commissioned from consultants and that the college implements all of their recommendations which are agreed by the Scottish Office.

Brian Wilson, the Education Minister, said that Clydebank was operating at "significantly above average cost and below average efficiency for the further education sector as a whole. This means that the college is absorbing more than its fair share of resources available for further education in Scotland. That does not represent best use of public monies and cannot continue."

This is the second time Clydebank has been rescued, having been given pound;166,000 in additional funding last June. Savings of pound;750,000 have already had to be found in the current year and more cuts will be needed to pay off the loan.

Hugh Walker, Clydebank's principal, said the college has been a victim of historically high levels of debt and was having to fund its operations by overdraft, exposing it to unfavourable rates of interest and affecting its cash flow.

The crisis has persuaded lecturers, who have been staging a series of one-day strikes for six weeks in pursuit of a 5 per cent pay claim, to suspend industrial action.

Subscribe to get access to the content on this page.

If you are already a Tes/ Tes Scotland subscriber please log in with your username or email address to get full access to our back issues, CPD library and membership plus page.

Not a subscriber? Find out more about our subscription offers.
Subscribe now
Existing subscriber?
Enter subscription number

Comments

The guide by your side – ensuring you are always up to date with the latest in education.

Get Tes magazine online and delivered to your door. Stay up to date with the latest research, teacher innovation and insight, plus classroom tips and techniques with a Tes magazine subscription.
With a Tes magazine subscription you get exclusive access to our CPD library. Including our New Teachers’ special for NQTS, Ed Tech, How to Get a Job, Trip Planner, Ed Biz Special and all Tes back issues.

Subscribe now