Colleges coped well with significant reforms but still face challenges

Scotland's colleges maintained sound finances and learning while undergoing significant reforms. The sector must now prepare to address future challenges as these changes continue to take effect, Audit Scotland reports today.

In Scotland's Colleges 2015, Audit Scotland states that reducing the number of incorporated colleges to 20 and creating 13 new college regions has had implications for funding, learning provision, and how colleges are managed and scrutinised.

Colleges' planning for mergers was generally good and carried out on time, with the changes to date having little negative impact on students. The report notes that the introduction of outcome agreements, the creation of regional bodies, and the reclassification of colleges as public bodies have increased their accountability and reduced autonomy.

However, while mergers have helped deliver savings through reducing staff costs, the Scottish Government and Scottish Funding Council (SFC) must specify how they will measure other expected benefits of reform, such as better employer engagement and less duplication in course provision. The report further states that the SFC needs to improve how it reports colleges' progress against outcomes, to support greater transparency and scrutiny of performance.

Reductions in staff costs were achieved mainly through voluntary severances, and auditors found weaknesses in how a small number of colleges had managed severance payments for senior staff.

Caroline Gardner, Auditor General for Scotland, said:

"The last few years have placed significant demands on colleges in Scotland as they managed a complex programme of reform. Our report is intended to support them in learning from how these reforms were delivered and addressing areas that need to improve.

"In the main, colleges coped well with substantial changes to the way they work, maintaining sound finances and completing mergers on time, without negatively affecting students during the process.

"Many of the effects of the mergers are still taking place, however, and there are continuing challenges for the sector. It’s important that the Scottish Government and the SFC work with colleges to measure and publicly report on whether the reforms have delivered all of the intended benefits."