Borders pays high price for peace

28th November 1997 at 00:00
The consequences of buying industrial peace at Borders College came to Pounds 114,000 making a sizeable contribution to the college deficit, accounts for the last financial year have revealed, writes Neil Munro.

College accounts for the year ending in March, which have been seen by the TES Scotland, show payments totalling Pounds 99,000 as a result of industrial tribunal cases brought by lecturers who were made redundant. An additional Pounds 15,000 was paid out to Campbell Pearson, the controversial principal who retired unexpectedly.

The combined cost of Pounds 114,000 was over half of the college's Pounds 204,000 deficit. The debt represents 3 per cent of Borders' total Pounds 6.589 million income for the year.

The accounts, which are publicly available documents, show 19 of the 43 incorporated colleges running a deficit of over Pounds 8 million. The others are in credit, however, leaving a net deficit of Pounds 3.480 million which is 0.84 per cent of total college income of Pounds 416 million for 1996-97.

The Pounds 8 million debt ranges from 11 per cent of income at Dundee College to 0.54 per cent at Aberdeen College. Dundee's accounts suggest the deficit is caused by substantial restructuring costs. Other colleges are bearing major costs such as James Watt, which reports Pounds 8 million in borrowings largely to fund its prestigious extension on the Greenock waterfront. The college had a bank overdraft of Pounds 3 million and a deficit representing 8 per cent of income.

Motherwell College also faced an unusual problem in the past year, the demolition of one of its buildings which was written off in the accounts at a cost of Pounds 250,000. It ended the year with a Pounds 660,000 deficit which was 4.9 per cent of its income.

The data reveals varying degrees of reliance on Scottish Office grant as a proportion of income among the colleges. This ranges from a low of 45 per cent at Oatridge to 78 per cent at Cumbernauld and Stevenson (Edinburgh).

But these figures are misleading since the Pounds 282.657 million listed as Scottish Office income for all 43 colleges includes student bursary money as well as the operating grant. So the figure represents supply and demand as well as direct Government subsidy.

More interesting is the Scottish Office grant per weighted SUM (WSUM), the formula for classifying total student activity in the colleges based on 40 hours of student course time. The average is Pounds 170 per WSUM, suggesting that any college which receives over Pounds 200 per WSUM is heavily subsidised.

This is particularly the case with Barony College in Dumfries whose Scottish Office grant represents 55 per cent of its total income, reflecting its commercial farm activities. But its WSUM figure is Pounds 238, the highest in Scotland apart from Lews Castle in the Western Isles were island factors push up its costs.

There are also huge variations in the extent of reliance on money from European sources, with Fife College way out in front receiving 15 per cent of its income from the EU. European income for the 43 colleges totalled Pounds 22.539 million in 1996-97, the accounts show. This was 5.4 per cent of their income.

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