High fees are a tall order, say colleges

10th August 2018 at 00:00
With Colleges Scotland posting another deficit, the amount paid by FE providers is drawing scrutiny. Julia Belgutay reports

Sector leaders have questioned the “value for money” offered by membership of Colleges Scotland, with analysis showing that further education providers in Scotland are paying significantly more than some of their counterparts elsewhere in the UK.

The comments come as Colleges Scotland’s accounts for 2016-17 show an overall deficit of £158,000 – a similar amount to the previous year. However, the umbrella body for FE colleges says it “continues to have a reliable income structure” and has “successfully reduced rental and back-office support costs”.

Like similar organisations across the UK, Colleges Scotland is principally funded through college subscriptions, which, according to its accounts, “meet the budgetary requirements agreed by the board”. The employers’ association, which represents the management side in the national bargaining process introduced a few years ago, is also financed by a grant from the Scottish Funding Council.

Across the UK, representative organisations have in recent years had to adjust to the regionalisation and restructuring of the FE sector, and the impact on membership of the declining number of colleges. Last year, the Association of Colleges (AoC), which represents colleges across England, revealed proposals to avoid a £1 million overspend on its £6 million budget in 2017-18, including job losses and regional restructuring.

Tes Scotland understands that membership fees to join the organisation amount to 0.1 per cent of the turnover of a college or college group, with a cap of £43,800 in place to avoid large groups having to pay excessive fees.

Falling membership

Colleges Scotland has also had falling membership in recent years, as a result of the regionalisation agenda and subsequent mergers. The organisation’s membership fees vary significantly and are also determined by size, although no cap is applied. A freedom of information request in September 2017 revealed that Edinburgh College’s membership fee for 2016-17 was £69,000, while West Scotland College paid £63,000 and the Glasgow Colleges Regional Board, which is a member of Colleges Scotland on behalf of its three constituent colleges, paid £143,000.

This means that the biggest Scottish FE institutions pay about 30 per cent more than the largest college groups in the UK – some of which have significantly higher turnover. The situation has led to a number of college leaders anonymously voicing concerns with Tes Scotland that membership of Colleges Scotland “doesn’t offer value for money”.

Earlier this year, Colleges Northern Ireland (CNI), the organisation representing Northern Ireland’s six colleges, shut down. This followed the earlier announcement that the Irish FE sector was to have its budget cut significantly (see box, opposite).

A Colleges Scotland spokesperson says business models for college representative bodies in the UK vary from country to country, and that Colleges Scotland “provides a bespoke range of services to its college members, which are unique and cannot be accurately compared with the specific services provided by the AoC, Colleges Wales, or previously by the now defunct CNI”.

The spokesperson adds: “Colleges Scotland did have a modest deficit in 2015-16, which then increased by a mere £7,000 in 2016-17. These small deficits were approved by the board, according to our standard procedures. We have had to assume additional office-relocation costs in this financial year, but – as instructed by our board – we have successfully reduced rental and back-office support costs and will publish our accounts for 2017-18 as usual towards the end of the year.

“Colleges Scotland receives money from its member colleges, as well as from the Scottish Funding Council, to help implement the changes from national bargaining, so we continue to have a reliable income structure.”

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