Cost-cutting campaign puts colleges at risk

November 15, 1996

COLLEGES could be put at risk if drives for efficiency continue at the same rate, further education chiefs have warned.

The Further Education Funding Council's 1995/96 annual report reveals a struggling sector.

Colleges last year delivered a 6 per cent rise in student numbers and absorbed a 9 per cent efficiency gain, bringing the total efficiency gain in the sector since 1993 to 20 per cent.

But more and more are going into deficit, further spending is needed on urgent health and safety works supposed to be finished by the end of July and colleges are failing to find the money to keep equipment up to scratch.

The Private Finance Initiative has also stalled. Sir Robert Gunn, FEFC chairman, said the council would have to make it a priority following a sharp reduction in capital funds announced for the next three years. He said: "If efficiency gains continue on the scale of recent years, then the consequent financial pressure on colleges could put some further education facilities at risk."

The annual report also shows the funding council recording a deficit for the first time since being set up three years ago. But Roger McClure, finance director, said this was simply an accounting figure and showed the council was committed to ensuring cash flow into the sector.

It hopes to recover another Pounds 18 million from institutions which failed to meet their target student numbers last year and have not yet submitted audited student activity returns.

Accounts are still outstanding for 39 colleges from 1994/95 and for one college for 1993/94.

John Brennan, director of further education development at the Association of Colleges, said: "It is pleasing the council is acknowledging the problems we have been forecasting for some time."

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