The last financial overview report from Audit Scotland on Scotland’s colleges’ 2001/2002 annual accounts highlighted concerns about the sector and within individual colleges. There has been a significant increase in public sector funding provided to colleges since 2001/02 – an increase of around £31 million for operational purposes and an increase of £64 million for improvements to property, campuses and new builds.
Consequently, the overall financial performance of Scotland’s colleges has improved over the last five years and the number of colleges recording operating surpluses has increased. In 2006-07, Elmwood College was originally forecasting an operating surplus of £165,000 but a delay in the confirmation and receipt of European Social Funds (ESF) resulted in the college ending the year with a deficit of £221,000. Never-the-less Elmwood still has good financial health but early action to reduce costs and increase income is necessary to ensure this continues into the future and the Board of Management have recently approved a new financial strategy to address this and provide the necessary cash resources for the College to invest in the new developments and opportunities that will arise over the coming years.
The Further Education sector will continue to face a number of challenges over the next few years including tighter financial settlements from the Scottish Funding Council and the risk of reductions in other sources of funding. Seven colleges are already forecasting deficits in at least one of the next three years. Elmwood is taking early and prudent action to ensure that it can continue to develop and grow in its niche areas and also continue to meet the lifelong learning needs of the communities it serves.