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Budget pressure mounts at region’s colleges as several report six-figure deficits

PUBLISHED: 11:24 23 April 2018 | UPDATED: 11:24 23 April 2018

Norwich City College deputy principal Jerry. Picture: Keith Whitmore

Norwich City College deputy principal Jerry. Picture: Keith Whitmore

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Colleges in the region have warned their tight budgets are being spread even thinner, as they fight to stop the impact creeping into the classroom.

East Norfolk Sixth Form College principal Catherine Richards.

Picture: James BassEast Norfolk Sixth Form College principal Catherine Richards. Picture: James Bass

With debate often on schools and universities, further education has been dubbed the Cinderella of the field. Per-pupil funding for 16 to 18-year-olds has stayed the same for six years, funding for 18-year-olds was cut in 2014 and costs have risen across the board.

Studies have warned that per-student spending is at a similar level - in real terms - to that 30 years ago, while another found that in 2013/14, almost half of colleges ran deficits.

Jerry White, City College Norwich (CCN) deputy principal, which ran a £73,000 deficit in the year up to last July, said it came amid rising national insurance, pension and wage bills.

He said the funding cuts for 18-year-olds from £4,000 to £3,300 alone cost the college - which has a good rating for its financial health from the government - roughly £600,000.

Jane Townsend, principal of Easton and Otley College. Picture: DENISE BRADLEYJane Townsend, principal of Easton and Otley College. Picture: DENISE BRADLEY

He said: “Another challenging area is that the courses we deliver are resource intensive. I can’t teach you to become a chef, or bricklayer, in a classroom. The college sector is the only one in education that doesn’t get capital funding from the government. We are challenged to make sure we are carving enough out of our income to put back into the classroom. That is a challenge - and it is getting harder and harder.”

Principal Dr Catherine Richards, at East Norfolk Sixth Form College, said colleges were key for “progression, skills and social mobility”.

She added: “It is affecting us - we have had to look at how we spend each penny and pound, but our financial health has remained good. There have been things we haven’t been able to do with students because of it, but we are really careful about what we spend.”

Jane Townsend, principal at Easton and Otley College, which ran an operating deficit of £1.1m in the year, said: “The sector has been challenged time and again to find creative solutions to financial issues and time and time again we have risen to this challenge.”

She said they were adapting to business in the new world, which was bolstered by strong support from the region’s industries.

And she said the college was confident it could make the most of its finances.

“Thanks to the creation of a robust recovery strategy that we are in the midst of implementing - being led by our strong leadership team - we are already making great progress in terms of our financial position and this gives us the confidence to look ahead to the future with optimism.”

Mergers ease strain

As pressure on colleges grows, many are turning to mergers for financial stability.

CCN and Paston College in North Walsham, which ran a deficit of £35,000 in the year to last July, completed theirs in December.

East Coast College opened last August as the result of a merger between Great Yarmouth College - which ran a deficit of £292,000 in the year to July 2017 - and Lowestoft College - which had a deficit of £976,000 in the same period.

And in March, East Coast College launched a public consultation with nearby Lowestoft Sixth Form College - which ran a surplus of £41,000 - on another proposed merger.

Stuart Rimmer, principal at East Coast College, said: “The funding in the further education sector is currently insufficient for the wide range of activity we deliver and huge value we add to the local economy. We founded East Coast College last year to help create a more financially sustainable future. The college financial performance has improved significantly this year with a planned surplus next year whilst improving quality.”

Could become more challenging

A west Norfolk college leader has warned that further education funding is likely to become more challenging in coming years.

Paul Harrison, vice-principal corporate services at the College of West Anglia, said: “Finance in the further education sector will continue to prove more challenging over the next few years, particularly due to a freeze in the student funding rates and the ongoing dip in the 16 to 18-year-old population.

“However, we are confident that continued focus on good financial management will ensure our long-term future.”

He said the college, which reported a deficit of £973,000 in the year to July 2017, had been rated good or outstanding for its financial health in all of the past five years.

The college said it had invested more than £60m in campus facilities since 2010, and that the loss reported included a number of costs over which the college had no control.

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