College struggles to pay its bills
PFI invoices causing strife
Hard- up Ayrshire College has warned it is struggling to pay its multi- million pound bills.
Bosses have admitted they will “find it difficult” to meet ongoing Private Finance Initiative ( PFI) invoices.
The annual £ 2.1million tab is due to be picked up until 2025.
Payments inherited from the former James Watt College are now equating to around four per cent of the institution’s annual spending.
A report into Scotland’s colleges by Audit Scotland has revealed the full scale of the financial strife.
It reads: “The college has indicated that ongoing PFI costs are contributing to its financial challenges.
“As part of the merger that created Ayrshire College, the college inherited a Private Finance Initiative ( PFI) scheme from the former James Watt College for its Kilwinning campus.
“Ay r s h i re College identified that making the annual payments was a financial risk at the point of merger.
“The college has indicated that it will find it difficult to meet the ongoing PFI costs.”
College bosses were given the green light to use revenue from land sales towards PFI costs in the coming financial year.
But they have been told there is “no further funding commitment” from the Scottish Government or Scottish Funding Council beyond that.
Concerned Ayr MSP John Scott said the news should act as a “wake- up call” for Holyrood bosses on the back of funding cuts.
He said: “We need to make sure students and teachers are working in an acceptable environment and the news that Ayrshire College is facing these financial difficulties, coming on top of the news earlier this year that the college needed £ 1.8m of urgent repairs, is very concerning.
“I am urging Scottish Government ministers to look again at the funding of Scottish colleges and to come forward with additional money to assist Ayrshire College in these difficult circumstances.”
A college spokesman said: “The PFI is a legacy from the former James Watt College, and the risk associated with ongoing PFI charges was highlighted to the Scottish Funding Council and Scottish Government prior to the merger which created Ayrshire College in August 2013.
“A letter from the Deputy First Minister in March 2018 acknowledged that Ayrshire College is faced with a “unique position in the sector in carrying such a financial burden” and confirmed that the College could retain the sale proceeds of the former Kilmarnock campus building to offset the annual PFI charges for the Kilwinning campus for 2018- 19.
“While the College welcomed this decision, it is a one year only settlement for 2018- 19 with no recurring annual support for the remaining six years of the PFI.
“The situation facing Ayrshire College is that we will need to identify significant savings of around £ 2m each year due to the PFI contract from 2019- 20 for the remaining six years of the contract.
“The College continues to work with the Scottish Funding Council to seek a solution to this unique financial burden, to ensure that we are able to invest in services to students, employers and the communities of Ayrshire.”