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03 August 1999

Colleges in deficit despite staff leakage
Nearly two in five further education colleges ended in financial loss last year despite cutting thousands of lecturers' jobs.

A survey of 275 English colleges by Labour Research magazine showed just over 100 (37%) reported an operating deficit for the year ending July 1998.

Many colleges have slashed staff to try to balance the books. The 275 in the survey cut a total of 2,750 teaching posts (full-time equivalents). If they reflect the position of the 435 FE colleges across England, the nationwide losses would be over 4,300.

The heaviest job cuts took place at Kingsway College in North London, which lost 38% of teaching staff, and North Oxfordshire College and School of Art in Banbury, which lost 37%.

At Kingsway the cuts were a response to substantial losses incurred by the college - of ?3.2 million in 1997 alone. The accounts put this down to "poor management and weak financial controls evidenced since the college was incorporated in 1993."

Staff cuts didn't necessarily ensure operating surpluses. At South Kent College in Folkestone, for example, lecturing staff numbers fell by 22% but the college still returned a deficit of ?1.3 million after "an extremely difficult year".

But the colleges' financial position overall is actually an improvement on two years ago, when Labour Research conducted a similar survey. The earlier investigation, of 347 colleges (based on accounts for the year to 31 July 1996), found that 62% had an operating deficit.

Nevertheless many colleges have suffered consecutive years of losses and so are facing more than just short-term problems.

Despite the bleak state of affairs in FE, some college principals managed to ride out the storm. Nineteen of them were paid over ?85,000, in some cases despite cutting the jobs of their staff.

The top-paid principals were Eddie McIntyre at Birmingham College of Food, Tourism and Creative Studies (?119,000), David Eade at Barnsley College (?107,596), Mr A Cotterell at Kingston College (?106,000) and Douglas Keith at Sandwell College (?102,999).

Notes to editors

Details of all colleges in the survey can be found in the August issue of Labour Research magazine The price of a single copy is ?2.80 (?3.10 including postage).
The Labour Research Department is an independent trade union and labour movement organisation founded 88 years ago. More than 2,000 trade union organisations, including 55 national unions, representing 99% of total TUC membership are affiliated.
For more details contact Richard Pond on 0171 902 9812.

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