More colleges in the black

24th June 2005 at 01:00
The number of colleges reporting a surplus on their accounts continues to increase, the latest analysis by the Scottish Further Education Funding Council shows.

The council has a target that all further and higher education institutions should be financially secure by the end of July next year, and Roger McClure, its chief executive, says "steady progress" is being made towards that goal.

The figures show that 33 of the 42 incorporated FE colleges reported underlying operating surpluses for 2003-04, up from 26 in 2002-03. Nine colleges reported a deficit, against 11 forecasting one in June 2004.

A circular to colleges stated: "We are continuing to work with the senior management and boards of management of colleges which still face some challenges in achieving financial security."

But the position at individual colleges varied widely: 27 recorded better than expected net cash balances, ranging from pound;4,000 to pound;1.4 million, while 15 recorded worse than expected balances, from pound;29,000 to Pounds 1.3 million.

The FE sector is reported as being "generally liquid", with cash reserves averaging 45 days before the money runs out.

But the funding council makes it clear that not all colleges are able to see the financial wood for the trees. "In a few instances, colleges experienced significant adverse variances in their out-turns, compared to the forecasts provided. This highlights the vulnerability of individual colleges to sudden swings in their financial position which only come to light after the period end," it states.

"Given the generally modest levels of surpluses forecast by most colleges, this emphasises both the importance of robust financial information systems and forecasting, and the need for boards of management and finance committees to assure themselves about the quality of the periodic financial forecasts and other information that they receive."

The council defines financial security as "a college or higher education institution that, taking one year with another, is able to generate a surplus on their normal operating activities and accumulate a modest level of reserve".

Log-in as an existing print or digital subscriber

Forgotten your subscriber ID?


To access this content and the full TES archive, subscribe now.

View subscriber offers


Get TES online and delivered to your door – for less than the price of a coffee

Save 33% off the cover price with this great subscription offer. Every copy delivered to your door by first-class post, plus full access to TES online and the TES app for just £1.90 per week.
Subscribers also enjoy a range of fantastic offers and benefits worth over £270:

  • Discounts off TES Institute courses
  • Access over 200,000 articles in the TES online archive
  • Free Tastecard membership worth £79.99
  • Discounts with Zipcar,, Virgin Wines and other partners
Order your low-cost subscription today