Bad planning led to college’s financial troubles

Poor planning and overly optimistic expectations for tuition fees led to financial troubles at a Scottish college, a watchdog has found.

Scotland’s Auditor General Caroline Gardner said New College Lanarkshire, given a £1.9 million advance from the Scottish Funding Council (SFC) in July 2017, is likely to need more money to achieve financial stability.

The college, formed from Motherwell, Cumbernauld and Coatbridge colleges, has forecast a deficit of £657,000 in 2017/18 but Ms Gardner said the amount of extra funding likely required to achieve a stable position has not yet been finalised. In a report, she attributed the institution’s cash-flow problems to bringing in £900,000 less than its “ambitious” tuition fee income target of £6.1m and not budgeting any money for pay increases following the reintroduction of national bargaining, which cost £400,000.

The college’s underlying deficit for 2016/17 was £560,000, or 1 per cent of total income. To tackle the situation the SFC has agreed to give the college £1.1m for a voluntary redundancy scheme which does not require repayment.

New College Lanarkshire given a £1.9m from SFC in 2017