« Previous | Contents | Next »
Listen
Specfic Pressures on Scotland's Colleges
Like all organisations colleges face a wide range of day-to-day pressures in delivering against their core mission. These will often make contrasting demands on college resources. However, such pressures will always be with us and dealing with these is within the remit of college management teams. However, Scotland's colleges currently face a number of significant, specific challenges which may limit their effectiveness in delivering against existing and future objectives. This section of the report seeks to identify and to an extent quantify these pressures.
Delivering Financial Sustainability Across the Sector
Improving and maintaining the financial sustainability of the sector has been a high priority for the last few years. The Funding Council has provided significant additional funds to the sector to help it address financial sustainability. This has been in addition to an overall focus on improving college management and making better use of the resources available.
To date, the financial sustainability campaign for the college sector has been largely successful. This can be demonstrated by the sharp reduction, 18 in 2002 to three in 2005, in the number of Scotland's colleges with an underlying operating deficit.
It is important to note that to date the financial sustainability for the college sector is being achieved at a time when the sector faces significant above inflation costs pressures for other things such as:
- legislation and regularity requirements, e.g. disability, equalities, disclosure;
- increasing utility costs;
- improving social inclusion and widening access;
- the cost of maintaining and improving college estates;
- pensions (see below); and
- salary pressures.
The Funding Council has provided additional funds to help reduce the impact of these factors on the financial sustainability campaign. However, it is likely that these funds will only partially cover the full costs of dealing with these issues.
Reductions in European Funding
Colleges h ave historically been very successful in attracting and accessing European funding. In 2004, 3% (£21.8 million) of college income came through direct European Social Funding (excluding ERDF). However, this figure understates the impact of reductions as the college sector also accrues significant additional income from participating in European Social Funding ( ESF) funded partnership projects.
For the majority of colleges, ESF income has to date been used to support social inclusion and widening access programmes and to deliver targeted skills training for small businesses. It has also enabled colleges to review and invest in course design and development, including e-learning and staff development, thereby adding value to activities and ultimately improving the outcomes from education and training. The ERDF grant received has been used to support substantial estates and infrastructure investment which has greatly improved the learning environments for Scotland's students.
If colleges are unable in the future to access the same levels of European funding or some public sector replacement funds, then it will reduce their capacity to offer programmes aimed particularly at those re-entering the labour market and those in disadvantaged communities and will ultimately result in a loss of educational outcomes for Scotland.
Increased Pension Costs
All across the UK employers are experiencing the pressure of increased pension costs. There is, however, no escaping that pensions in general are consuming a larger proportion of salary costs for colleges in Scotland than ever before. Whilst colleges had been expecting, and had budgeted, for a rise in the Local Government Pension Scheme ( LGPS) pension rates, the changes to the Scottish Teachers Superannuation Scheme ( STSS) and the additional associated costs totalling £3 million over academic years 2006-07 and 2007-08 were unexpected. Neither of these pension schemes have officially announced employer contribution rates beyond the year end 2009.
Current estimates suggest that the publication of the STSS consultation response will see the sector pension costs increase by around £4 million from 2007-08 to 2010-11. These predictions are based on staffing volumes and salary levels remaining unchanged.
Scotland's colleges have received additional funding to reduce the impact of increased pension contributions. It is likely that colleges will again in the future need support in covering pension costs too if we are to ensure no damage to overall college provision.
Continued Investment in College Estates
With the extensive capital programme in place we need to ensure that colleges have the resources to progress. Colleges that have not executed complete rebuild of their estates need sustainable capital in order to ensure that their estates do not fall into a state of extensive disrepair.
The college estate is essentially in a transitional state, given that more than 50% of colleges have, or are in the process of preparing to, implement major capital projects. Although a number of these approved developments are dependent upon the availability of capital funding beyond 2007-08. The majority of the other 50% of colleges are currently developing infrastructure investment proposals for their estates.
We believe then that there is a need for sustained levels of capital investment to bring all of Scotland's College estate to a position of relative parity and to ensure the long-term sustainability of Scotland's Colleges in state-of-the-art 21st Century learning enviroments.
« Previous | Contents | Next »