Debts double in FE colleges

September 26, 1997

DEBT levels in further education have almost doubled over two years, a financial guide warned this week.

This year's further education financial yearbook from Noble Financial Publishing, part of the Edinburgh-based finance house Noble Group, reveals that the sector ran a deficit of more than Pounds 98 million in 1995/96, compared to Pounds 92.5 million the previous year. This has led to the sector's total debt rising from Pounds 62 million to Pounds 119 million over two years.

The yearbook covers 4 colleges, representing 82 per cent of the sector, and shows that more than 63 per cent of institutions have run at a net deficit over the past three years. A hundred colleges increased their debt by more than 25 per cent in the last year.

Tim Noble, chief executive of the Noble Group, said: "It is disturbing to see such a large proportion of further education colleges running at a deficit. This is not sustainable over a long period, especially in view of the capital expenditure requirements."

Falkirk College of Further and Higher Education last year became the first college to use the Private Finance Initiative for new buildings, and the Noble Group says very few colleges will be able to undertake large capital projects without an element of private-sector funding.

Just over 73 per cent of the sector's total income comes from the further education funding councils or the Scottish Office, with almost 8 per cent from education contracts, and another 8 per cent from tuition fees.

Only 0.8 per cent comes from investment income, compared to 2.5 per cent for higher education institutions.

Only 21 institutions receive less than half of their income directly from the funding councils or Scottish Office. Sheffield College has retained the top spot in terms of total income at Pounds 44.6 million, while Bradford and Ilkley Community College Corporation has leapfrogged City of Liverpool Community College into second place with Pounds 37.9 million.

The average cost per lecturer is Pounds 21,106. Woolwich College has the highest average staff salaries at Pounds 30,353, while Redbridge College has the highest average teaching staff salaries, Pounds 31,611. Morley College continues to have the lowest average staff salaries at Pounds 5,709.

Noble's Further Education Financial Yearbook 1997, Noble Financial Publishing, 76 George Street, Edinburgh, Pounds 250 (Pounds 125 to colleges).

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