Concerns over £100m held in college trusts
Reserves put in ‘secretive’ foundations after reform
SCOTTISH colleges are facing calls to use millions of pounds of former reserve funds to improve student support and the quality of teaching.
The call follows a major reform of the sector which saw colleges move some £100 million of reserves into remote trusts to protect them for the future.
Because the reforms meant colleges became public bodies they were no longer able to hold the money as traditional reserves.
Under the terms of the new Arms Length Foundations (ALFs) that were set up, any transferred funds must be spent on supporting further education in Scotland.
However, the Educational Institute of Scotland (EIS) teaching union was warned of growing concern over the use of the foundations.
Larry Flanagan, gener al secretary of the EIS, said: “The fact Scotland’s colleges have moved almost £100m in cash reserves out of public sector funds and into ALFs raises a number of significant concerns. Shifting these reserves into ALFs removes the option of this funding being pooled by government for reinvestment across the sector.
“Given that these substantial cash reserves have been built up at a time of significant austerity and cuts to provision, this raises serious questions about whether this money is being put to best use to support learning and teaching across Scotland. At a time when lecturer and support staff jobs have been cut, courses have been withdrawn and student places and support have been slashed, we must question if these cash reserves could have been put to much better use to support learning and teaching across Scotland.”
Gordon Maloney, president of student body NUS Scotland, said it was “wrong” that money was deposited in ALFs when there were shortages in student support funding. He added: “When college students don’t get enough financial support, it’s shocking that millions of unspent college funds have been squirrelled away.
“The college sector has undergone some difficult changes over the past few years, and students and staff have taken on much of the burden. Hiding away cash in secretive foundations, with little transparency, is no way to make sure that our public money is spent where it’s needed most.
“We need to open up these foun- dations to scrutiny and make sure the tens of millions of pounds sitting in them go where it’s needed most – across all our colleges, ensuring the necessary funding for bursaries, teaching and places.”
However, Shona Struthers, chief executive of Colleges Scotland, said the creation of the foundations was a vital way of protecting the money so it could be spent on further education. She said: “The creation of Arm’s Length Foundations was to ensure that the money already generated by colleges, including some non-public money generated by commercial activities, could continue to be used to benefit colleges, staff and learners.
“The ALFs were established at a time when the colleges were no longer able to hold cash reserves as a result of being reclassified as public bodies. If colleges had continued to spend the reserves then this would have resulted in the Scottish Government reducing its funding to colleges by this amount.
“This is because this would count towards the Scottish Government budget limit and could be ultimately deducted from the Scottish block grant, adversely affecting public sector spending.”
A freedom of information request by the EIS revealed which colleges had put most money into the new foundations.
Nineteen out of 26 colleges reported that they had transferred funds over the previous 18 months with £38m placed in national ALFs and £61m in local ALFs. TWO success stories from Glasgow University’s creative writing post-graduate degree course returned to the city.
Fiona Rintoul, left, and Karen Campbell gave a talk at the Aye Write! book festival at the city’s Mitchell Library last night.
Ms Rintoul read from her debut The Leipzig Affair, set in East Germany. Ms Campbell spoke of Rise, set in the Highlands. Photograph: Colin Mearns