Two-thirds of FE colleges face Pounds 82m debt

August 23, 1996

The number of further education colleges in debt is rising, according to figures published by the Further Education Funding Council for England.

More than 290 of the 450 colleges in the sector are now understood to have deficits, 50 more than last year. In total, colleges owe an estimated Pounds 82 million.

A spokeswoman for lecturers' union Natfhe said: "This confirms our fears that the already precarious funding situation is continuing. We are aware that some colleges in particular are in very severe financial difficulty." She said the union estimated about 1,500 lecturers per year were being made redundant and this figure was rising.

The Pounds 82 million deficit is a decrease of Pounds 16 million over the last year but an increase of Pounds 31 million on forecasts made at the beginning of the academic year 1995/96. The FEFC said the cost of staff restructuring, particularly pension arrangements for those taking early retirement, was responsible.

While 28 per cent of colleges could face financial difficulties, about 13 per cent are already considered to be in a weak financial position.

David Gibson, a past president of the Association of Principals of Colleges, said: "This means more than 40 per cent of colleges are having financial problems. The most worrying aspect of this is the increase in the number of colleges with deficits. It is because colleges are having to make cuts of between 17 and 20 per cent over three years on top of the last three years of cuts."

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