Redundancies are predicted across further education as colleges struggle to survive the public funding squeeze, finance directors say.
Up to half of colleges could find themselves financially vulnerable over the next two years, forcing them to cut costs, said David Pullein, chair of the College Finance Directors’ Group.
Speaking ahead of the annual conference of college finance directors next week, Mr Pullein said: “There is no way there is going to be an increase in public spending and there will be a serious decline in colleges’ financial health.
“There are always 15 to 20 per cent of colleges in the financially weaker categories. I suggest that this will rise to up to half of the sector.
“We are looking at wholesale redundancies across the sector over the next couple of years.”
Mr Pullein, director of finance at Leeds College of Building, said there was currently a mismatch between the Government’s message that money is being found to support further education and the reality for many colleges.
The Government has announced and extra pound;300 million for college building projects and has plugged a shortfall in the funding for 16-19 education. It also estimates a pound;140m increase in 2010-11 for adult teaching and learning.
However, John Denham, the Skills Secretary, has also said that he expects colleges to deliver efficiency savings of pound;240m in 2010-11, plus pound;100m of savings from central administration and the budgets of intermediary bodies. On top of this, colleges expect to have to cut their higher education budgets as part of the efficiency gains demanded across HE by Mr Denham.
Mr Pullein said: “The reality on the ground is that the money needed to deliver what we need to deliver is not there.”
“The money for capital will not go half way towards achieving what we need to achieve. The 16-19 funding will meet current growth, but what about the extra growth in September? As for Train to Gain, it is completely overspent.”
He said one of the main problems was the lack of flexibility available to colleges to move money between different “funding silos” to meet the needs of learners locally.
Mr Pullein, who will make a key speech to the conference on Tuesday, said there would be little good news for college employees and finance staff in particular.
“People will lose their jobs and this will place a huge amount of pressure on people in finance departments. It is paramount that they have the support of senior management teams and governors.”
Mr Pullein also appealed to principals and governors not to demand the impossible from their finance staff during a tough spending period. “They must bring realism to the table. It is not a time for aspirational plans,” he said.
Julian Gravatt, assistant chief executive of the Association of Colleges, who is due to speak at the conference on the funding and regulation of colleges after 2010, said: “Colleges will have really difficult decisions to make to survive the next few years and those that are financially less well run will be really vulnerable.
“The demand for what colleges do is rising and public funding is rising in some areas, but in other areas it is not. It is a challenging and difficult time.”
Mr Gravatt said that finance directors could find their jobs at risk as the situation worsens.
Barry Lovejoy, head of FE for the University and College Union, said: “If such predictions are proved correct, then unfortunately this would confirm our worst fears over the recent funding announcements.
“They would devastate the infrastructure of FE and undermine its central role in combating recession and mitigating rising levels of unemployment.”
Mr Lovejoy said the union would fight any job cuts and press the case for increased funding in the lead up to the general election.
The Learning and Skills Council said that 5 per cent of colleges are in the very weakest financial category. A spokeswoman said that colleges will shortly submit their forecasts for the years ending 2009 to 2012. These will be reviewed in order to assess the latest financial health projection for the sector.
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