Colleges are in a surprisingly stable financial state thanks to “flexible” funding provided during the pandemic but concerns remain about the longer-term situation, MSPs have heard.
Chairwoman of the College Principals’ Group, Audrey Cumberford, welcomed the “hugely positive” emergency funding given to colleges, suggesting it felt “odd” to have the current level of financial stability across the sector given the turmoil of the pandemic.
Giving evidence to Holyrood’s Public Audit Committee, Ms Cumberford, who is also the principal of Edinburgh College, said the flexible nature of the funding allowed them to rapidly set up courses, including for specific jobs that emerged during the health crisis.
Ms Cumberford told MSPs that there were approximately 700 job vacancies created in the midst of the pandemic across the NHS Lothian region and Edinburgh College had been able to set up fast-track programmes for students to get guaranteed jobs with the health board.
She said: “In financial terms – certainly at Edinburgh College and I know at other colleges – we have experienced some stability, which sounds a bit odd in the middle of a response to Covid which certainly wasn’t very stable.
“But certainly in financial terms, we have seen some stability as a college, and that has been directly linked to the Covid consequential additional money that was put in to support the Young Persons Guarantee and to support the National Training Funds — both of which were actually very flexible routes of funding, which was hugely positive for the college.
“That allowed us to respond very, very quickly to your immediate needs.”
She added: “The challenge is that we are literally planning on a year-by-year basis; we do not know if those funds will continue beyond the short term.
“That’s where the lack of stability comes in, it’s being able to plan a wee bit more strategically and of course that has all sorts of implications in terms of the staffing that you need to deliver those programs.
“There’s uncertainty for staffing, and for the staff themselves due to the lack of sight of the long term.”
Scotland’s Auditor General, Stephen Boyle, said: “The college sector continues to experience financial challenges, but there has been some stability during the current year as a result of some of the additional funding that has been provided to the sector and other measures too, such as the use of furlough to bring some financial stability to the sector.
“I think the longer-term outlook undoubtedly remains challenging.
“We’ve yet to see what impact the end of furlough, the increases in national insurance contributions that will come, whatever uncertainty remains about the inflationary environment that we’re in and what impact that will have on both the cost base and future pay awards.”
“The college sector continues to experience financial challenges, but there has been some stability during the current year as a result of some of the additional funding that has been provided to the sector and other measures too such as the use of furlough.
Karen Watt, chief executive of the Scottish Funding Council (SFC) – the body responsible for providing approximately £1.9 billion a year to Scotland’s 19 universities and 26 colleges – said they are in a “very improved position” for the 2020-21 academic year with a surplus of £7.6 million.
She explained that there has been an extra £70 million invested in colleges this year that has put the sector in a “more immediately improved position” although she warned of “risks down the road” due to a lack of funding commitments that could hinder longer-term financial planning.