Controversial New York campus has loan deal extended
GLASGOW Caledonian University has increased the loan facility for its controversial New York campus by another £4.2 million, fuelling renewed criticism of the project.
Accounts also show the US-based satellite has now drawn on £15.1m of potential borrowings, up from £12m in the previous 12 months.
Elizabeth Smith, the education spokesperson for the Scottish Tories, said: “Loans cannot go on forever. It’s time we started seeing results from this transatlantic match-up.”
The New York campus, owned by the Glasgow-based university, was unveiled at a glitzy launch in the Big Apple in 2004 and opened by the then First Minister Alex Salmond. However, the new higher education institution was unable to operate as it did not have a teaching licence or have the ability to award degrees.
Against this backdrop, the project was occupying expensive premises in New York’s Soho neighbourhood and paying out sizeable amounts in salaries.
Glasgow Caledonian New York College (GCNYC) turned the corner last year after receiving the necessary permissions to function as a degree-granting body.
Sixteen “pioneers” were initially enrolled to study and the college had 58 students earlier this month in postgraduate programmes in fashion marketing, business and risk management.
An analysis of the Glasgow Caley annual accounts reveals the extent of the subsidy provided to the New York campus.
In 2014/15, the university lent a “maximum aggregate” of $15m, worth around £11.8m at today’s rates, to GCU-NYC Inc. Two years later, covering 2016/17, the maximum was increased to $ 16.5m (£13m), of which around $15.8m (£12m) had been “drawn down”.
The university’s latest accounts show that, as of July this year, the loan agreement had been increased to $ 21.8m (£17.2m), with $19.8m (£15.1m) accessed.
In 2013, GCU also agreed a “standby letter of credit” for $2.25m in relation to the property in New York.
More broadly, Glasgow Caley’s accounts show that income was up this year from £116.1m to £119.8m. However, the deficit, before “other comprehensive income” is taken into consideration, was up from £2.7m to £7.5m.
The university also had “unrestricted reserves” of £85.6m. Glasgow Caley principal Pamela Gillies’ salary rose from £226,000 to £230,000, or around 1.5%.
A university spokesperson said: “Each year the university’s governing body, as part of its long- term investment in GCNYC, agrees a financial commitment. This takes into account the expected income for this pioneering new college.
“The first group of students began in September 2017 and completed their Masters in December 2018. In January, the fourth cohort of new students begin studying.”