25 April 2008
Scotland's further education colleges have improved their financial performance, moving from an overall deficit of £6m in 2002/03 to a £16.9m surplus in 2006/07, according to Audit Scotland.
The watchdog had highlighted concerns about the sector and the financial management of individual colleges in 2003. Since then, there has been a significant improvement in colleges' financial position, says its report, Financial overview of Scotland's colleges 2006/07.
Published on April 24, the report also found an increase in the number of individual colleges recording operating surpluses.
Overall accumulated reserves have grown to £98.9m, although almost half of this is held by two institutions – Edinburgh's Telford College and Aberdeen College.
The report says increased funding, better management, peer support and learning lessons from past difficulties have combined to help the colleges attain a healthier financial state.
Auditor general Bob Black said the improvement was good news, given past difficulties.
Colleges, the Scottish Funding Council and the Scottish government had worked hard to learn lessons. He added: 'However, seven colleges forecast deficits over the next few years and there are challenges ahead. These include changes in funding from the government and the European Union and other cost pressures.
'We would like to see colleges and the Scottish Funding Council continue to work together to improve financial sustainability in the sector and to improve financial forecasting.'
The report said the 39 incorporated colleges in Scotland spent around £626m in 2006/07, providing education to around 363,000 students.
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