Budget settlement 'challenging'

7th December 2007 at 00:00
An increase in spending of only 0.5 per cent will put some colleges in jeopardy, writes Emma Seith.Six colleges are at risk of going back into the red and special needs students could have fewer courses to attend, ministers have been warned by college leaders.

These are among the consequences they are predicting, following what the Scottish Government has admitted is a very tight public spending settlement.

Further education is to receive an additional pound;53.4 million over three years, up from pound;526.6 million. But figures from the Scottish Funding Council show the real terms increase is only pound;8.7 million, allowing for inflation of 2.7 per cent. This means a real increase of only 0.5 per cent a year over the three years of the spending review to 2010-11.

In its submission to the spending review, colleges had asked for pound;80 million for learning and teaching, pound;133 million for student support and pound;450 million in capital investment over three years (they will only receive an extra pound;10 million over the three years, taking spending to their estates to pound;97 million by 2010-11).

Giving evidence on the draft budget to the parliamentary education committee last week, Howard McKenzie, acting chief executive of the Association of Scotland's Colleges, said the budget settlement was "challenging".

He added: "The review is just about enough to allow us to do what we are doing now. But if we were asked to do any more, we'd have to move the chairs around."

Mr McKenzie went on to say that, as a consequence of the settlement, the financial security of six colleges was now in jeopardy: "Some colleges on the margins of surplus will go back into deficit."

And in some colleges, he said, expensive courses will have to be dropped from the timetable in order to free up cash. "Some colleges may have to change their curriculum profile in order to maintain financial viability, rather than do what the students want."

Anything high-cost is at risk, he warned. In his own college - Jewel and Esk College in Edinburgh and Dalkeith - the courses attended by just 175 of its 8,500 students cost 10 per cent of funding. In the future, such situations may prove untenable.

"Engineering and construction courses which require workshops, or special needs courses aimed at getting people ready for work or ready for college are labour-intensive and expensive to deliver," Mr McKenzie continued. "They might be replaced by cheaper courses, such as business studies, for instance."

Mary Mulligan, a Labour member of the committee and a former minister, wanted to know if it would not be more prudent for colleges to make "back office" savings rather than cut back front-line services.

Mr McKenzie replied that very little is spent on administration. "The amount you can save is actually quite small," he said.

David Caldwell, director of Universities Scotland, agreed: "Even to reduce the back office by a third would make little difference in terms of additional resource."

The universities had called for an increase of pound;168 million but received just pound;30 million in real terms. The funding council figures reveal this will work out at a one per cent increase a year over the three years, slightly better than for FE.

Although Universities Scotland won some reassurances from their meeting with Fiona Hyslop, the Education Secretary, last month, Mr Caldwell told MSPs: "We should not delude ourselves: there will be real consequences through not getting the pound;168 million".

- Our initial report on the spending settlement (TESS, November 23) slashed college budgets at a stroke, so that the figures for current spending of pound;526.6 million became pound;52.6 million. Our apologies.

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