20 Colleges Face Debts `That Threaten Viability'

Article excerpt

Twenty further education colleges are facing financial problems and more than 100 could have difficulty remaining financially viable if faced with unexpected costs, it emerged last night.

Some of the worst-off colleges have deficits of up to pounds 1m, still owed from their time under local authority control.

An analysis by the Further Education Funding Council found 70 per cent of colleges "sufficiently robust" to allow them to meet targets. But the forecasts of 24 per cent of the 428 institutions included in the national study suggest that "significant adverse variances might limit their ability to deliver their strategic plan and remain financially viable".

The council says it is concerned about 5 per cent of colleges in the sector whose positions are relatively weak. It has contacted these institutions, which have not been named, and a further nine colleges whose forecasts are deemed unreliable and which do not present a clear position of their financial state.

The council's study follows news that hundreds of lecturers and support staff in further education colleges face redundancy because of funding changes.

The sector is one year into a 25 per cent expansion in student numbers planned over three years. The Government has increased funding by 5 per cent but unions claim some colleges are in financial crisis, with the council squeezing colleges where the costis higher than the national average.

Yesterday a council spokesman said: "We are concerned about the 5 per cent whose position appears to be relatively weak. But no college is at risk of going under. What we want them to do is to work with us in improving their efficiency, to cut costs and to rationalise their affairs. …