 I welcome everyone to this, the 31st meeting of the Public Audit Committee in 2023. The first item on the committee's agenda is for members of the committee to agree or not this morning to take agenda items 3 and 4 in private. Are members of the committee agreed to do that? Yes, we are, thank you very much indeed. The second item on our agenda is further consideration by the committee of the Auditor General for Scotland briefing note on Scotland's colleges 2023. I welcome everyone to the meeting this morning. We are taking evidence in a round table format, which is intended to promote a freer flow of discussion and maybe a less confrontational style of evidence taking. As it is a round table, what I would like to do is invite our witnesses this morning to perhaps introduce themselves. I will start on my left-hand side with Stuart. I am Stuart Brown, I am the national officer for further education with the Educational Institute of Scotland. I am Andy Witty, I am director of strategic policy corporate governance at colleges Scotland, which is the membership body of all 24 colleges in Scotland. Good morning colleagues, I am John Muney, I am the further education lead for Unison Scotland. Good morning, I am Derek Smyll, I am the principal of Glasgow Kelvin College, and I am also representing the college principals group. Morning, I am Ellie Gommasall, I am the president of the national union of students in Scotland. Thank you very much indeed. I am sure that you have seen the briefing note that we are discussing this morning. One of the strong messages that comes out of the report is a concern around the financial sustainability of the college sector. The expression that was used by the Auditor General when we took evidence from him was that there were real viability issues. We spoke at one point about whether there was a risk of insolvency in the sector, whether all colleges in Scotland were going concerns. So maybe Derek, I can begin with you by asking for your take on where we are with the financial sustainability of the colleges sector in Scotland. The terminology that we are looking at here is sustainability. I would like to introduce the term stability, because often when I am discussing, for example, with boards of management, we are talking about stability in the short term. That is what colleges are focusing at the moment. Colleges and the college sector are certainly not sustainable, as they are just now. I think that the Auditor General has explained that before you already. Unfortunately, the only people who can give evidence specifically about the whole sector and give you specific details would be the Scottish funding council, who collates all that information. I can certainly furnish you with, for example, examples from my own college, but also discussions that I have had with fellow principals. To put the situation in context, we are not approaching a difficult situation. We are absolutely in the middle of it, so we are one year into a three-year situation just now. If I gave you an example of my own college, I would describe my own college as, of course, I would say, a well-managed college. However, it is financially stable. You used the term insolvency or negative cash balance. It was certainly not in that position going forward. However, to reflect on a little bit of the previous us and the situation that we are in just now, and I think that it is important for us to reflect on it, the Auditor General's report is talking about the academic year 21-22. Obviously, just now we are in 23-24, and we are just finalising the financial figures for 22-23. I think that there was a conversation about the reporting year previously that the committee discussed. Of course, in colleges, we report and submit our accounts by December each year because of our academic year. For example, for my own college, which is a medium-sized college, very much predominantly in the northeast of Glasgow, so a lot of SIMD, 10 and 20 cohorts within it and very much community-based. In academic year 2021, we were in a surplus position of 0.9 million. In 2021-22, by the end, it was 1.1 million. The reason for that was to ensure that we knew a storm was coming, so we were actually making ourselves financially stable. However, the accounts that have been finalised, which have not been published and will not be published until the late before Parliament, are projection for 22-23 as a deficit of 1.3 million. Typically, that is what is happening. Members might ask what has caused the sudden change. We know about massive inflationary costs that have gone across the board, but the big hit there is the severance costs because I am downsizing. Another element, what is the consequence of that? For 22-23, I have already released 6.5 per cent on my workforce. Over the next two years, it will be a similar amount. By the end of the three-year period, by the end of academic year 24-25, I will have reduced my workforce by 20 per cent and that is the projections that we have actually got. Why is that? It is the only way that I can remain. I will not use the word solvent but in a positive cash balance, because in my way there are various technical terms that perhaps a public body cannot technically be insolvent. Is there a danger of colleges moving into a negative cash balance at various times? Yes, there is an enormous pressure on cash flow, as far as that is concerned. Effectively, it is because of the real terms reduction relative to rising costs. We will be taking evidence in the new year from the Scottish Funding Council, but we note that the Auditor General in the evidence session that we took with him was able to tell us that, from the year in question, three colleges out of 24 were in deficit, that had risen to nine. If you extrapolate that, I am not saying that it is going to be a linear progression, but if you were to extrapolate that, that would mean that every single college in Scotland in the next financial year would be operating in deficit if that was the rate of growth of deficit. Obviously, I do not have the privilege of seeing all that data laid out. Financial forecast reviews that the Scottish funding will collate, but I am unaware of any principal colleagues that I have spoken to who would not be posting a deficit position. However, please take that as a point. That is anecdotal information that I have reheased through conversations with, but not all college principals, obviously. Okay, but you are here, Derek, as a representative of the college principal's group. That is important that you are telling us that. I am going to ask Stewart, because workforce has been mentioned and the reduction in workforce. One of the points that is made in the Auditor General's report is that, while on the whole, the public sector workforce has grown, by contrast, in the further education sector, the workforce has contracted. I do not know whether you want to comment on that or any of the other points that Derek Smill has introduced. I will maybe turn to some of the points that Derek made in a moment, but in terms of staff costs, that is how it is framed in the Auditor General's report. I am a bit concerned about the framing of staff costs as the biggest financial pressure. Colleges or educational institutions, staff are their greatest and most important resource. There is no learning without lecturing staff, who I represent, and there is no learning without the professional services staff that John and his colleagues represent. Therefore, I am concerned that simply framing staff costs as a financial pressure is dehumanising, frankly. To frame people, actual people as financial pressure is insensitive, framing them as a burden in the sector, but I think that it is also short-sighted, convener. If you want the best possible educational provision, you have to invest in staff. You have to invest in their terms of conditions and their professionalism. What is disappointing is that, in other areas of the education system such as schools, that seems to be accepted. I have never seen that in the college sector in the same sort of language and I find that disappointing. I think that everybody with a stake in the further education sector, students, communities, trade unions, employers and the Government need to be clear on what is meant by sustainability. I find Derek's language around looking for stability interesting. What is actually happening, and Derek highlighted to it, 20 per cent of his workforce, the sector is contracting. If the sector is contracting, it will deliver less. That really concerns the EIS feeler, and I know that it concerns a lot of other people as well. It should concern communities and the public. Colleges cannot deliver more with less. That is concerning. Thank you for that. I am going to bring Ellie in at that point. As a representative of the users of these important educational services, I am sure that you have a really clear perspective about what is going on for the students that you represent, Ellie. Yes, absolutely. First of all, I will align myself with what Stuart was just saying there, because I think that this is one of the most concerning elements around how we are seeing massive reductions in staffing numbers. We are seeing a workforce being cut, and as Stuart says, it is staff who deliver that education. There are lots of things that you need in order to have a college in order to have somewhere that can deliver that education, but none more important than the staff who are actually there to deliver that learning. It is really concerning to students that we are seeing those cuts. Again, this is something that is not just... In terms of the students who are currently studying at college, some of the cuts in terms of teaching staff are incredibly concerning, but we are also seeing things like disability support, for instance, disabled students, more than any other group who are coming to me and saying how worried they are about their college experience moving forward, because they are seeing the cuts that disability services, for instance, are receiving. Also around things like the student associations, which naturally for myself is a US president I am very, very much supportive of, but good student representation and student partnership in terms of how students are able to feed back and shape our own education is absolutely critical. It is something that I think thus far, I and Scotland, we have done a really, really good job at. One of the, again, main places that we are seeing cuts is within the student associations, which of course are funded by the colleges themselves. I mean, there are some student associations that are nailed down to one person who is both the elected student rep and essentially that own students full-time staff support as well, whilst also taking on another role within student services within the college as well. That is the entire representative body for students and that is really not right. It is incredibly concerning. I think there is also this point around how just how important colleges are to Scotland and to local communities. Colleges are community organisations. They are the backbone of so many local communities. I think the fact that these cuts, and I think it is fair to say, manage the decline of colleges in so many local communities. I think the message that that sends to those communities is an incredibly concerning one. We know that colleges are much more likely to be attended by students from areas of multiple deprivation, students from backgrounds who otherwise would probably not access post-16 education. Again, the fact that it is colleges who are constantly facing these cuts year after year after year, colleges that are being really chronically underfunded, I think the message that that sends to those from our most impoverished communities in Scotland is a really worrying one. Eileen, can I ask you, because this was something again that we raised in the session with the Auditor General, the new government slogan is equality, opportunity, community. How does that prism fit on to what is going on in the further education sector? I think that this is just it, that the slogan is a perfect descriptor of what colleges should be there for. Colleges are all about improving equality and improving opportunities for people across Scotland. It is about education as an inherent good. Education is a good thing in and of itself in terms of people being able to go and learn and improve their futures. Often because of that, we know that colleges are absolutely critical in terms of lifting people out of poverty and we know that colleges are critical community organisations. So the fact that we are seeing these cuts is really, really concerning. The fact that it's something that is almost accepted as like a norm now, and I think also that that's worrying because I think it puts some people off, people are seeing that the support that they would expect whilst going to college, whilst going to engaged in post-16 education is slowly rolling back and is slowly being cut away and people can see that and it means that I think there are students who otherwise would go to college who might not be getting, for instance, the experience and the grades that they deserve from their college experience. So I think that's really worrying as well and I think this is also important in the context of, you know, we're talking about sort of the funding of colleges as bodies themselves at the moment, but students as well need funding in order to be able to access college and the rates of student poverty that we're seeing in the college sector are, it's really horrific. I mean we're seeing really worrying levels of student poverty in the university sector but in almost every single metric college students are getting an even worse deal. Rates of homelessness, more than 12% of students across Scotland haven't been homeless at some point during their studies. Rates of really poor mental health, I think it was over a third in the thriving learners survey that was done between colleges and colleges Scotland and the Mental Health Foundation. It was more than a third of college students who said that they were suffering from moderate or severe symptoms of depression. Rates of college students who are feeling suicidal as well, really concerningly high and this is the thing as well is that colleges aren't just about going in, doing the learning, getting the qualification and then leaving. It's about so much more than that. It's about growing and developing as a person. It's about being able to access the support to be able to do that and we need to acknowledge as well that a lot of student at colleges are in really difficult tough circumstances that come in from really rough possessions and colleges need to be able to be equipped to be able to support those students and really uplift them so that they're able to fulfill and be able to get not just the qualification that they deserve but be able to really thrive and again when we're seeing cuts to student support services for instance to student associations but also to the learning itself and teaching staff in particular I know have a really significant role in terms of I suppose some of the pastoral supports that they provide to students in really tough circumstances and as we're slowly seeing that being eroded away I think it's really clear that that's going to have a very very severely negative impact on the students who need that support the most. Okay thanks a lot I think Stuart you want to come in briefly and then I'll I want to move up because I want to talk about the one of the passages in the report is about the significant areas of risk for colleges which is a kind of broader palette of things and I'll maybe invite Andy to come in on that point first of all but Stuart. Thank you thank you convener I think what Ellie's talking about is compelling because that is the human impact of cuts I welcome the Scottish Government putting community as a term in central in their dialogue but it's not a word I hear enough in the college sector community should be central to all the colleges do because they serve communities but what do we hear instead we hear words like sustainability viability stability severance downsizing none of these words none of these words will help communities. Derek's cut is workforce by 20 per cent we will have by 20 per cent I'll have a dramatic impact on the students that Ellie's talking about in the community that Derek serves just this week it's not confined to the central belt Shetland college I was hearing that are talking about cutting a third I think of their lecturing force that will have a devastating impact on an island community where there's already a lack of opportunities so I think we have to be clear about what cuts mean in the in the human sense and I want to hear an awful lot more about the community worth of colleges from the Scottish Government. Thank you that's clear Andy can I can I ask you to broaden it out and as I say the report identifies some other risks that the college sector is up and against and I wonder whether you could maybe elaborate on those and give us your view on those and whether there are others that are not included in that assessment by the Auditor General. No happy to do that and and I mean this is obviously one of the real critical issues I think it was James Withers who's obviously the author of the recent report he was giving evidence to the education to the young person committee earlier in November and described colleges on a burning platform and that I think highlights the impact now of that 8.5 per cent real terms reduction as the Auditor General has highlighted against rising costs that have been felt by the sector to be workforce energy inflation and and that has real impacts as really tough decisions that colleges are needed to make and that is in some of those wider areas be it offer of curriculum how much they can invest in the estate future planning how much they integrate digital into the restates we've seen the the benefits of that and hybrid learning is here to stay and inevitably workforce as well I think the Auditor General said there was difficult choices about workforce that colleges could afford now colleges don't want to cut the workforce but you know we recognise that that narrative and the evidence the Auditor General has given what what we're in this burning platform we've got to get through this particular moment to then gain the benefits and the opportunities that some of this more medium and long term that sort of laid out in some of the recent reports that that could deliver and we need to do that I mean I don't know if members are aware there was a Fraser Valander did a report for us just last month which showed the value for money that college investment in colleges return so for a cohort of learners 52 billion pounds added to the value of the Scottish economy and that is about individuals as well so I recognise the conversation about the human side of this because the impact is on less teaching hours the impact is on staff the impact is on the buildings they're working in it's about that pastoral support that colleges can offer around students it's these areas that never get cut and that's why as a sector approaching the draft budget this year what we've been what we have asked for is sort of framed in two ways we're asking for restoration and we're asking for repurposing and the restoration is that 8.5% that's been cut to return that to the sector so that at least we can get back to a level try and get some stability into it and then the repurposing is that looking at that wider 3.2 billion pound education skills budget to how that can be used more efficiently and effectively to be able to bring the money into the into the colleges because the colleges do not want to be making these decisions they want the investment in because it benefits the students it benefits the staff it benefits the economy the economy of Scotland needs colleges to to thrive in order to have Scotland to thrive if you look at the figures of inward investment of jobs and the billions of pounds of tens of thousands of jobs if you look at the detail of our 80% of those jobs are high-end technical skill jobs they'll be trained by the colleges but we need the colleges there with the capacity we need to be seeing colleges increasing not decreasing thank you and uh and that's opened up a whole frontier which we are going to cover including the withers report and so on what can i just because i'm conscious that john hasn't come in yet i just want to one of the the before i move on to Colin Beattie who's going to ask about the colleges state and so on can i just ask you john so in the in this exhibit to the final risk factor and we've heard from ellie about the student experience but from the perspective of your members um the the auditor general identifies a risk being the impact of cost efficiencies on staff well-being i mean what are you seeing as a trade union um about the what you know what's the impact of this because it is uh in a period where inflation has been pretty high by historical standards certainly by recent historical standards it's been a flat cash settlement for three years consecutively hasn't it so what what's the impact being on your members of that yeah thank you convener i mean i think there's there's numerous areas of impact on our members from that first of all when you laid out the stark financial terms where as as the the committee knows there hasn't been a pay settlement for the year 22 23 onwards so we're now in the second year without a pay settlement so we have low paid members many of whom are women struggling in this time of high inflation you know there's a lot made of inflation coming down but as everyone in this room knows that merely means costs are increasing slower they're still increasing and there's continued pressure there i think that the general direction of travel in the sector is a real worry for our members when we've already sat here this morning we've heard words like downsizing and solvency etc and an anecdotal kind of comment i would make i understand that a non-central belt college could be in severe solvency risk whenever the pay rise is actually paid that is how much impact the cuts have had on this sector i think that over and above that we have the estates issue we have rack we have the general capital funding issue the reduction in that has created health and safety issues for our members at work and i know that health and safety issues are really a majorly at the forefront in humanist colleges in terms of the approaches that are made so the concern for us is what all of that means is we see people leaving the sector and the problem of that is you are you are obviously losing skills you are losing experience that has an impact on on our students you know and as my colleague Stuart pointed out no without staff you have no sector yeah thank you very much i'm going to invite Colin Beattie to take us through a conversation about where things are with the college estate which is again one of the principal focal points in the brief in the auditor general prepared so calling over to you thank you leader i can't remember how many years now and how many reports the auditor generals put in referring to the college estates and the backlog in maintenance looking at the briefing the auditor generals put forward the one thing that's perhaps missing is the some sort of risk assessment of the total backlog which would have been perhaps useful to get information on but the total backlog if you look at it three hundred and twenty one million that's an awful lot of backlog and what is the impact of that maintenance backlog and i know there's been that the government's provided a bit extra money and so on for this but what is the impact that maintenance backlog and the the learning and the working environment of colleges and and maybe i can ask you to no thanks so you're absolutely right in in the figures you're highlighting and that gap in funding that there's been for the infrastructure which obviously is of significant concern for the colleges i mean to be clear that that funding gap is about making the building's wind and water type that's what we're talking about before we even get on to the elements around reaching net zero and decarbonising by 2038 net zero by 2045 and so the impacts are around the conditions that staff are working in and that students are learning in and so yep there's making sure the safe environments for both staff and students it's about that student experience as well and you know there are some good examples of of college estate where there's been investment but it's just not consistent enough that there are places you can go where tens of buckets are catching the rain water every time it it rains and the students are having to learn in that environment and the staff are having to work in that environment and you know that that probably contributes to some of the wellbeing elements that you were talking about it certainly doesn't prepare them for the work in world and giving them the experience they deserve so if you have somebody at school you could have a similar aged person at college because that's the cost they're taking or they could move from you know great facilities and great estate in schools and then moving into some of the buildings that colleges are needing to to to utilise at the moment and that has that huge impact it can impact the offer of curriculum as well when difficult choices about a state have to be made by colleges we saw during obviously during covid learning was all online that doesn't really work for some of the practical subjects i'm sure you can appreciate that but hybrid learning i think is here to stay so some of that digitising and getting the estate up it's not just about the physical buildings but it's about the digital elements around that as well and so all of that is some of the the the impacts around around the condition of the estate at the moment john do you have a yeah it was actually just a to pick up on a point that was made there around the condition of the estate's impact to non-curriculum so as we move forward clearly with the Scottish Government skills agenda colleges are going to be expected to play a large part in that in terms of you know obviously giving people the skills to then move on into industry and boost the economy but if we've got a situation where colleges never mind making hard choices about staffing as Derek's already outlined earlier but if they physically can't have decreed environments because of capital pressures then there's a real risk to the Scottish Government's plans for the future maybe i can actually comment on something also just to add in what do you have any knowledge of the sfc's progress in triaging for the 4.7 million that's going to be available additional in 23 24 i don't have any specific detail but for example i know my own college has put in a bid for some high priority work and we've been informed that that's highly unlikely because i think it's now up to 20 million is is being request for a small quantum that is not an unusual situation that we come across so we have obviously come to conclusion we will simply won't get that money it's high priority element is it a health and safety issue at this moment in time no but in the future that that example may become it is one element again to draw to your attention we talk about backlog maintenance my understanding is that the assessment of the backlog maintenance is now over well at least 10 years old from that exercise was done so the standard of backlog maintenance was assessed i believe about 10 years ago and that's where the calculations are based on now so it's not even an assessment of the here and now i understand that the the scottish funding council have now published their strategy document and are now working on a action plan to implement that but at the moment as college is to be clear we have no infrastructure or framework for approaching the scottish government or the scottish funding kind of to bid for specific apart from that that one emergency fund that you mentioned mr beaty so there is a a non-going chronic situation where there is no framework to that the monies that were provided are for backlog maintenance but it's only red level backlog maintenance it's not the full backlog maintenance and again i mention again my belief is that the the assessment is over 10 years old so we're now in the process waiting another 12 months i think into the autumn of next year so before we will see a plan to take that forward the next element is a planning for the future going going forward obviously we have no mechanism that we're aware of at the moment it's extremely frustrating and as andy just mentioned there that the backlog maintenance we're talking to simply to keep it watertight and capable to carry on we talked about general pressures i think john had mentioned there this is part of the general pressures that colleges are under one of the aspects that we've mentioned is we're seeing a shrinking workflow the sector is shrinking so it's physically shrinking the amount of student activity that we are able to to deliver now is shrinking it was the target for colleges across oak second were reduced in this academic year by 10 percent by my colleges modelling estimates by the end of the three-year period i will have lost 20 percent of my staffing however my ability to deliver will have gone down by about 14 to 15 percent so that that will increase if the trajectory continues as part of that process now getting back to the the capital investment and infrastructure i have already exited one of my small campuses so that is seeking to be disposed of i will not get no proceeds from that whatsoever because it's a public asset but again it's part of releasing me from the burden of maintaining that property and so on and so forth so these all come together to accumulate an additional pressures a very important point i would like to pick up that Andy mentioned is digital investment i find it almost impossible to do any form of meaningful investment digitally be it hardware infrastructure or software development for the future of learning and teaching which is a big concern i have colleagues that are that are called springs with innovation trying to move forward i find it difficult to release them as far as time is concerned because of financial constraints and obviously because of the lack of digital budget for development which is part of the infrastructure again moving forward is very very challenging so it's a great great concern that it will be another 12 months before we actually have a plan to then respond to that that strategy but at the moment we're in a desert at the moment it's probably worth noting that in addition to the 4.7 million there's been an increase of 7.6 percent in the sector's capital funding but in actual figures of course compared to the backlog that's still relatively small one of the elements i mean obviously i don't have the facts in front of me we must be cautious because for example if there's a single new build in the whole sector that money skews the total capital investment where you've got one college perhaps quite rightly and deservedly might be having a new build but appears that there's a significant investment across the sector which which isn't the case sorry i could clarify just on the actual available money capital for colleges for general backlog meaning it is broadly broadly the same this year to last the increases are because of specific programmes that gain money so the changes in capital you see from year to year are often because the specific programmes are receiving the bulk of that so the the day-to-day maintenance money that colleges are receiving is broadly similar this year to last how's the student experience of the college estate yeah not good i mean i think so picking up on some of the things that have already been said i mean i think one of the first of all challenges is that there's a bit of a postcode lottery so you know if you happen to be a lot of college students tend to be from the local area the local community that their college is based in and so i think there's a big disparity between the students who are fortunate enough to be in an area where their local college has a lovely nice shiny new building rightly um and equally some of the the buildings that really are you know having to put buckets down to collect the rainwater and i think this is the really concerning thing and i think also you're just picking up on some of the things that andy was saying around you know the impact that that has on you as a student if you're in a classroom that is drafty that is cold the damp you know that's that's poor quality poor condition i mean what that does to your your physical health let alone your mental health is really really poor and i'm sure it's the same for for staff as well another thing i just wanted to pick up on and again picking up on something that that andy said which is again this disparity between perhaps your experience if you are a student at a school versus a student at a college but also if you're a student at a university for instance and you might be doing this you could well be doing the exact same course or a very similar course very similar qualification at university compared to a college again colleges typically tend to be students from more impoverished backgrounds students from you know areas of multiple deprivation who are going to colleges compared to students who might be slightly better off typically going to university and again this isn't to say that the universities are perfect or that all of the estates and universities are up to scratch because they're absolutely not but i think when you look at the disparity there between essentially the experience that working class students in scotland are receiving and the experiences that other students in scotland are receiving and you can see that there's a real gap there the last thing that i just wanted to pick up on was around and this is slightly tangential but i think it's relevant is around the importance of you know especially as we've come out of the pandemic you know we're going back to to in-person teaching or sort of that hybrid model but it's all very well in good having a good quality estate or having your good digital infrastructure but students also need to be able to access that as well and that's really important so in us scotland's research last year we surveyed over 5 000 students in scotland as part of our cost of survival report we found that more than one in five students in scotland have missed classes because they couldn't afford the cost of getting to campus more than one in ten actually missed an online class because they couldn't afford the cost of internet to be able to access that class so i think this conversation about the estate and about new infrastructure whether that's physical or digital infrastructure is really really important but that also needs to be in the investment there in order for those students to be able to access it and to be able to thrive in those spaces as well. I think that she'll wants to come in on this question too. Let's not deliver quality learning and students cannot be learning in any sort of quality way in substandard or unsafe environments it just cannot happen that the very least short changes students in any ways outlined i think very eloquently the impact of that in terms of potential and wellbeing there also means that elements of the college estate are unsafe potentially as well and i find it ridiculous that in the 21st century we are having to talk about learning environments being potentially unsafe that is ridiculous i find it really really concerning the fact that it will be what autumn 2024 for the publication of the infrastructure plan that's a long time and i welcome your comments mr bt this is something you raised with the auditor general that this is not a new issue derick's talked about 10 years since the last valuation on it that's concerning this is a massive strategic issue for the sector a massive strategic issue for the sector and it's a health and safety issue as well and i need to make the point that we want to work with college employers to try and address this issue and we have tried repeatedly over recent years to establish some sort of national discussion on health and safety and be blocked at every turn this discussion here is why we need to have that sort of forum and that sort of discussion with the employer so we can work together to try and face what's a monumental challenge but just to reiterate in the 21st century we should not be talking about unsafe learning environments that is ridiculous can i ask perhaps about the elephant in the room rack i think john you mentioned it earlier on as a as an issue how big an issue is it i mean i aware that rack if it's properly maintained and all the rest of it is actually not a problem it's only when it's not properly maintained that it becomes an issue andy thanks that on in in regard to rack just to give the committee some sense of scale of the 24 colleges seven have identified rack in some part of their estate in impacting 11 buildings or parts of buildings of those four have either been closed partially or fully in order with that but there's other mitigations in place around monitoring survey surveys have been brought in risk assessments working with the Scottish fine rescue service for evacuation if there was a fire elements like that so that's where the position around rack of course what rack has done is brought an additional pressure all of these figures that we've been mentioning do not take into account rack because they were all said several several years ago and and one of the issues of the estimates we're talking about is that the estimate from the last state condition survey which was almost 10 years ago was 360 million over the next last five years now that that's passed now and of course with inflation and construction costs they're looking at redoing that survey but as as stewart said it's going to be next autumn before we get that investment plan which is the really key element to be able to see what the pounds and pence add up to across the across the college sector and all of all of this and so there's that strategic element but there's the human element as well which has been clearly outlined as well and and I think part of that is around parity of funding so you mentioned universities I've mentioned schools you know I think there's figures that Spice have produced have been in parliament chances where the inequity of the funding per student between school colleges and university and so equity of funding and indeed that parity of funding equity of funding and also the that parity of esteem as well for colleges I think is is all part of that cultural mix that needs to be addressed here in order to find solutions in a sustainable way forward. Just to be clear on what you were talking about earlier about rack we have no idea of what the cost of rectifying issues with rack are in the colleges. I don't have that information I'm not party to the information on cost I've not seen. Does the information exist? I don't know I've not been involved in all of the discussions so I'm not sure if a figure around rack exists but I'm not aware of that at the moment the the ongoing surveying work around that is is happening. Would you be able to say who might be holding these figures? Those figures would be held with the Scottish funding council. Okay so they're the ones that are directly involved in this rather than the individual colleges? So the individual the individual colleges are discussing with the funding council who are obviously discussing with government around the detail. The detail I've provided is my understanding of the latest position. We as a sector body have been engaging with the funding council and the Scottish Government about seeking and ensuring that the finance is in place to pay for these but I don't have a figure of what the total cost may be at this point in time Mr Beattie. Okay thank you very much indeed. Yeah I think John Mooney wants to come in on that point and then we'll move it on back to revenue and so on which Graham Simpson is going to lead on. Just a very quick point and it was just to make it clear again that Mr Beattie can ask him those questions about who holds that information and you know who understands the detail. Two points firstly is Stuart pointed out there is no strategic health and safety forum in the sector where trade unions can ask those questions and have access to that information and secondly granted I have only been in the sector for eight months I have never met before for Scottish funding council. It has been some at least 18 months as I understand it since they offered a meeting today to trade unions and that's something I would suggest the committee needs to change. Thanks Governor. Thanks for that duly noted. Graham Simpson, Graham. So just following up on that, I presume you've asked for a meeting yourself. Stuart, you said you'd not met them. Yeah Stuart's the staff side secretary I believe so he's going to give you a direct answer. So I've been in post nearly three years Mr Simpson. We used to have, the EIS used to have I think regular meetings with the SFC twice a year at the SFC's behest over the last two and a half years that has dried up and they've not been happening. So for two and a half years you've not met the Scottish funding council? No. Have you asked to meet them? We've had one meeting, we've had communications with them, branches have had communications with them but my concern here Mr Simpson is that the SFC used to take it upon themselves understanding our value and worth as trade unions and representatives in the sector to speak to us that has not been happening, that has dried up. Have you asked them to meet? Yes. And what happened they just didn't respond? There's a letter I believe at the moment I would need to check but again it shouldn't be for trade unions to go with a begging bowl to ask for meetings. We have value and worth they should be meeting with us regularly like they used to. Well yeah quite obviously I mean that's common sense these meetings should be taking place it's a real concern that they're not. Can I just ask just to clear up in my own head around the discussion about the maintenance backlog so I think Derek is it the case that as of now we do not know what the maintenance backlog is? That is my belief here now it is a retrospective assessment that was done several years ago that that the allocation of funding is based upon. So why aren't individual colleges like yours keeping a record of your own? Colleges do have records of you know states issues et cetera and that's one of the reasons that in Mr Beattie's question that there are bids when a fund becomes available which is an emergency fund for high priority that is going back to the Scottish funding council. But again a reiterate although we talk about backlog maintenance the amount of money that's allocated only concerns itself with the red grade element of it there is a red, an amber and a green and for the past few years it's only been addressing the red, the highest priority of backlog maintenance based on an assessment that was done many years ago. So the the monies that have been provided and the Auditor General has expressed and stated about the gap in that funding £321 million that is for both what's called backlog and life cycle maintenance so the backlog is that that's been missed that's needed to bring it when the watertight life cycle is to you know you need to spend money to maintain buildings otherwise they go into backlog maintenance and and that life cycle maintenance is estimated of a need of about £25 million a year in its own right to stop the backlog increase it. And so when you look at that so the estate conditions survey which was done several years ago that was just looking at what was needed around backlog maintenance to make it wind and watertight on top of that you have ongoing life cycle maintenance but the gap that the Auditor General has identified is that gap in funding that the infrastructure state is needed. So it's I mean it's a huge figure however you cut it it's that huge figure around making sure that the buildings and the facilities are up to basic standard that you would want people to work in and people to study it. Okay I'm going to jump jump back to probably the what the convener was touching on earlier. I'm keen to know just what the state of play is here in the college sector. We know from a previous session that the Scottish Funding Council keep a register like we'll call it a risk register of where colleges are and and there are some some colleges around about five or six are colour coded black so they're most at risk. Is that your understanding? I don't get sight of that list or their colour coding so I'm not aware of the detail around that so I'm not really able to answer that directly. If I rephrase it then do you think that there are colleges that are at risk of going under closing? The term of closing I'm being very cautious of the language that you would use. I would again technically we use the word insolvency I'll use the word in a negative cash position and you can interpret that we are public bodies so technically so basically having no cash. The fact does it close down etc that that would be a matter you know for the Scottish Government directly with the Scottish Funding Council but are there colleges and again I don't have the privilege of seeing across the board I do represent my colleagues however so anecdotally in those discussions I would be extremely surprised that there weren't a significant number of colleges that were on the brink of going into a negative cash position that the consequences of doing that would basically be determined of what emergency action the Scottish Funding Council would have to take. As far as a list I would expect there is such a thing a risk register it is not something that I've experienced as a principal being discussed with me directly with the Scottish Funding Council I'm not aware formally of the existence of such a register however it would surprise me if there wasn't such a register. The register exists I've not seen it but we know it exists so in in your discussions with your fellow principals who you represent do they I mean surely if you if you're in a college that is at risk of let's say running out of money do the do any of those principals put their hands up in the meetings you have and say Derek we're really in trouble here yes in a subtle professional manner I am aware of of colleges being being in difficult how many I don't I can't define that however usually those sort of conversations are directly between the college and the Scottish funding council because again I mentioned it depends on the response from the Scottish funding council exactly what the situation there is one phenomenon that's interesting because cash flow is absolutely critical here and colleges are under enormous pressure in managing those cash flows there are difficulty how this financial information is represented for example and I think we heard the auditor general mention the concept of the adjusted result they are adjusted operating result which then gives it an accurate reflection there's another aspect in cash for example colleges hold considerable cash that is ring ffengs that is not accessible and one quote for example which is quite correct in accounting terms that most colleges staffing costs represent 70 percent of income which is technically and as far as accounting is correct however that is taking into account a range of income that is ring ffengs I'll give one example which is childcare costs now we simply manage those costs we don't access them they come into our income and expenditure account and they go directly out and they can't be touched so the term that I use in parallel with that with my border management and in discussions is accessible so for my college and I'm aware that the vast majority of colleges throughout Scotland it's not 70 percent of their income now that's technical correct but it's actually around about 80 percent of their accessible income or accessible revenue and the other aspect of the cash balance we hold these special amounts of cash student funding cash of which we're only custodians however it shows in our regular updates to Scottish funding council as far as cash flow is concerned but to be clear we cannot access those they are completely ring ffengs so it must be caution must be given when reading the financial health of the sector as far as cash flow is concerned another element of that are provisions if for example a college misses by a certain amount their productivity target they are they are liable to clawback of funds and they must provide a provision for that so in the accounts many colleges carry perhaps for a year or up to two years a provision that they cannot access so it does concern me a little bit the picture can be skewed if you're not clear about those aspects you could be looking at a college it looks as if they're solvent for want a bit more than a positive cash but in reality they're in a negative cash position I think John you just to pick up on a couple of comments from Derek there I think I think firstly I've got to say we're sitting here in a committee of MSPs principles trade union student representatives and none of us have seen this register this register and I think that really ties into the long-standing trade union points about governance in the sector and also links to issues that we've had in obtaining financial information that we've been asking for some time despite the fact we'd obviously recognised trade unions I think I need to make that point I think that whilst we remember that we therefore haven't seen this register and have issues with obtaining some information I think the general direction to travel in the sector severance is at an all-time high and always increasing compulsory redundancies are now on the table and in various places I think that demonstrates the kind of financial pressures that colleges are under and as you know and it's already been mentioned a couple of situations here there's a developing situation in Shetland and I'd mentioned another college who are you know open with in certain spaces about the fact that when the pay deal goes through they're in serious trouble so yeah I think the sector's in a really bad place at the moment Mr Simpson okay I'm going to ask I know Stuart once in but I want to explore and you may have something to say about this Stuart you know how many job losses do you think we're looking at in in the sector we've heard about a couple of colleges who are who are cutting but do you see that across the board so I like this Stuart wants to comment the short answer to that is yes the sector the sector is shrinking as Derek says and I think if we're going to talk about job losses we have to be clear what job losses mean certainly in lecturing terms every job loss is a cut to educational opportunity for students so to speak about job losses in silo is to ignore the human impact I know that support staff professional services colleagues are experiencing the same thing I think we have to be honest about what's going on in the sector you asked about what is the state of play the college sector is in crisis this is a crisis and it has been a crisis that has been developing for years and we are now in it and it's going to take definitive action to address it and I know we're going to get on to the weather's report in that review and I've got quite a lot to say about that because there's a risk of that becoming the wrong answer to the right question the college sector is in crisis the EIS and EIS feeler have been saying this for months we wrote to every single college principal and college employer Scotland to ask them to publicly back us for an emergency funding package not one reply not one that's really disappointing to say the least the leadership of the sector need to stand up with us and call out what's going on we need to address this together we need to bin the adversarial nature that has become the culture in this sector and work together to address the crisis because that is the only way the only way that we're going to move forward without a devastating impact of cuts of job losses of cuts to cost provision that affects communities up and down scotland and I think we have to be plain about it to not recognise the crisis in colleges is to not recognise reality and I think it's maybe just to pick up something that I think Derek said very early on and and it was around we're just at the start here we're in the middle of of the financial situation we're in we're not we're not at the end you know so the auditor generals identified 8.5 per cent real-term cuts over over the last three years but we're also all aware of the messaging we're getting around the general public condition of the of the public finances and so you know looking at it collectively it's around well you know what next are we here next year and it's 10 percent overall cut what is it the year at because we're not at the end of of the challenges and that's that that's my concern and you know we've we've heard expressed and understood this morning the impacts on staff on students on the state on the learning experience on equity of of access for people from that and again that's why you collectively as a sector we're looking for that restoration as well as repurposing because you know we we see the opportunities of a growing sector and the paradox is at a time of being on this burning platform is is the very time Scotland needs colleges to provide the workforce to drive the economy to to to help grow help increase productivity so that this is the moment where where we need that le you want to come in yeah so just a couple points first of all is is this really important point that this is not a new problem that suddenly popped out of thin air in in recent years this has been a long-term issue for for a very very long time i mean you only have to look at for instance the fact that um you know staff have had no choice other than to go out on strike for a fair pay deal i think eight out of the past 10 years is that right um and you know the impact that obviously that has on students is is huge but we're very very clear at nus that um you know the impact of cuts is is far far greater than the impact of any strike action that can be taken you it's very clear that um you know the working conditions that staff are facing and the pay conditions and things like that you know that has an impact on students as well because it's our learning conditions um the other thing that i wanted to point out is just just around we had talked a little bit around Scottish funding council around sort of college governance um and one thing i wanted to point out and there are lots of challenges i think around the governance of colleges but looking at the sector as a whole so look at the Scottish funding council um i'm fortunate enough to sit on the the board of the Scottish funding council as an observer um but there are no trade union representatives there um when you look at college boards themselves and also obviously Scottish funding council also works with universities university courts as well they're required to have student representatives and trade union representatives which are full voting members of those boards so the fact that we're not applying those same standards to the Scottish funding council which has responsibility for the whole sector concerns me um and i'm obviously concerned around the fact that that those meetings haven't been happening with trade union colleagues either i would say that NUS does have a fairly good relationship with the Scottish funding councillors relationship that we value but i think that it's one that really needs to be strengthened and the fact that we don't have voting um members from trade unions or at all um or from uh you know student representatives i do find worrying especially when you consider you know the perspectives and the really valuable perspectives um that i think are needed to tackle some of the challenges in the sector yeah it does it does seem completely ludicrous to me that you know the scottish funding council does not have union representation huge issues to explore but we'll have them in in in front of us um just one final question um i guess is to andy or derrick are are we seeing courses being cut and if so what how many probably i i i'm best answer on that again it's difficult it's a very dynamic situation um the broadly and again i can give out a contextualisation for myself and my own college and i'm a you know a typical college but probably more orientated to community we talked about simd 10 and 20 for example 36 percent of all my students are from simd 10 post codes if you take that up to simd 20 it's well past 50 percent between 15 60 percent so it's a substantial amount so what's been happening that there are things happening geographically there's consolidation of course and what i mean by that is class sizes are getting larger so the the ratio between teaching staff and that's all about trying what we're trying to do is keep the impact as far away from the student as possible however students are affected by it so what does that mean it will mean restrictions in choice so where we would have had choice at an entry level instead of having three choices with an engineering landscape will be a generic engineering the class sizes will be larger etc the different campuses across from within one college or amongst colleges will be less more restricted again we will try and work together collegially to make sure if you can't gain it here at least you'll be able to gain it four miles away three miles away whatever however the whole principle is to have it accessible at place and that's particularly important for my own college because i work in Easterhouse, Haghill and Springburn for example in Glasgow so there are these aspects of my own college and many colleges are doing exactly the same thing so it's not so much black and white how many courses but i will tell you you know between eight and ten percent of all my provision has been reduced this year so that's a fact and other colleges might not the target was just by 10 percent for all colleges different colleges will depend on their financial position but reducing that anything perhaps between five and 10 percent they will decide how they reduce that depending on the financial situation but there is definitely a universal reduction but that manifest itself is restricted streamlined choice also restriction in geographical dissolution and my own college that has manifest as i had four campuses three large and a smaller campus i've now closed down one of my campuses for that reason of affordability so they are definitely reducing what we're trying to do again is prioritise particular areas of demand of need through employers economically but also socially as well in communities which staff are doing extremely well as far as that's concerned but yes categorically there is across the board in Scotland a reduction in activity a reduction in choice and class sizes are getting bigger as far as that that that's concerned to to offset those those costs can i make one that and it's something that steward had brought up and to be clear that pay disputes for example and the settlement of pay disputes are not the cause of any crisis situation we are in the cause of the crisis situation is long-term chronic underfunding of the sector and Ellie's absolutely correct this has been going on for years and years and years and it's now got to the situation where when we talk about efficiencies there there is no fat on the bone we've been cutting into muscle for several years now and now we've got to the extent of our actually downsizing and it's the only way that we can actually remain solvent for want of a better word for it going forward so that's what's forwarding i am making no choices to reduce my staff based on pedagogy or any other means purely because i simply don't have enough money to pay the pay bill it's as simple as that and it's not the dispute that causes the problems it's not asking for a settlement if we leave to decide if it's appropriate or it's not that is not what causes the problem it's a continuous underfunding and again i'm part of the national negotiating machinery and have been for the past two two and a half years that is one of the major frustrations there is much that colleague union colleagues here and i will absolutely agree on however we come to an impasse because it's my duty my responsibility to remain solvent obviously however that is where the the paradox comes in and this isn't the first year this has been going on for several years that that is why we're in continuous dispute we're not continuous dispute i'll exaggerate a little bit but we've been you know in long-term um dispute over the years it's caused by basically we simply don't have sufficient funds for the expectation of the output yeah and now what's happened is that as far as i'm concerned the dam has burst and there's been a realisation we cannot accept this expect the same output for the amount of money that's available hence there has been an overall reduction in the target for colleges to start with what i agree with with derrick and that is that i don't think the majority of collies leaderships want to be making cuts i think some see it as opportunities for something else but i believe derrick when he says that it's not or the logical or pedagogical reasons that you're making these choices that you don't want to be making them i also agree in a welcome that pay deals in of themselves are not the problem because college employer scotland in public communications quite often like to remind our members that they're the best well paid lecturers in the UK well how are they because they've went out and fought for it eight times in nine years that's why so i welcome that sort of dialogue and i would welcome more of it from college employer scotland frankly what i don't agree with with errick and we have nego we can disagree respectively here i think we need to be no we're not negotiating i'm going on to i'm going on to an education we're doing that this afternoon don't worry about it and i hope it's a fruitful negotiation we all do hope perhaps is for lawn but we'll see i'm very very clear the reduction of activity downsizing job cuts that's cuts to provision that's cost cuts let's be honest about what that is and we have to be honest that's crisis point class sizes being bigger that's not the answer there is not one shred of educational rationale you will find anywhere that says enlarge class sizes are better they never will be and i say that as a former teacher so i'm very very clear that cuts to provision are happening and what is cut first community learning is cut first additional support needs is cut first that's how it works that's what happens so the most vulnerable people in society are the ones that are losing out from the cuts graeme i think john wants to come in and then we're gonna have to move it on i think because of the clock being against us a lot of interest in this yeah i'll try and keep it brief just following on for the question about how many jobs are going in this sector can't give you a specific answer but i think that i was honestly quite alarmed because of this college is the juicing by 20 percent i've got real concerns about what that means across the sector and i would just quickly point out that between eight and ten colleges are currently talking to us or not talking to us is a case maybe about the juicing jobs so that's what 40 to 50 percent of colleges roughly speaking that's the situation within over the last few months okay i think as stewart called out and his organisation i think we need to give him a right to reply before we move on so andy okay no thank you i mean the the points you did raise that we don't want to miss is that you know Scottish lecturers are the best paid in all of the UK i think it was the dfm at the weekend said that there was a relationship between head count and pay and she did make the point about public bodies that they would need to downsize their workforce now as you've heard um and it was in the audience another old report by the auditor general um further education is one area where the reductions have have already happened with that but i think this is where that effective and affordable workforce planning which again the auditor general is one of the recommendations there is where we need to um look at and take forward okay okay thank you i'm going to um i know stewart wants to come back in but i'll you'll have another opportunity stewart before we finish up but i'm i'm keen that willy's going to lead the next part of the conversation that we're having willy right thanks thank you one of the aspects of the auditor general's report also looked at the college's ability to generate income from other sources external sources and so on and we know that covid really hammered that ability for the colleges to to seek additional income from external sources and we also know the european social fund has dried up and pretty much disappeared i just wanted to know we got a perspective from from trouble from dairy again from mandy about what your thoughts about that are is there work going on within the sector to try to recover some of that activity at all could you give us a flavour of what that looks like and how we whether you think that will be successful in the medium to long term and assisting to generate income from external sources yeah i mean i can kick off and then maybe Derek could give some examples from from his college so um yeah i mean this starts from the baseline that the funding for the sector that comes in the Scottish funding council is on average about 75 percent of the day-to-day funding of colleges now that does vary between college to college but as a as a broad average across um the sector now the other 25 percent some of that is also public funding but it's through different routes tuition fees and and and things like that so there is commercial income within the college sector um but it is um relatively a small percentage um but that is needed not for the nice to haves but actually the day-to-day running of so we've got public assets that are in public ownership but uh they're not fully publicly funded um the the colleges do generate commercial activity and again that will vary from college to college it did stop during covid that is getting picked up again the um to get to significant levels of commercial income you're probably looking at changing the business model of a college where it's not then focused on learners and its and its core purpose around that but what colleges are doing is getting into partnerships and collaboration i think there's work to be done in looking at how much employers contribute to skills training and costs and how they could work um with uh with with the different uh the different colleges uh but but it goes back to you know that that whole value for money and as i mentioned the Fraser Valander Institute report earlier you know it's very clear the value for money for each public pound that goes in and how that's multiplied in benefit to the individual as well as the Scottish economy and so um you know needing to find a way through this is is is really critical and of course in parallel with all of this because of the structural setup of colleges they can't hold reserves they can't borrow as well which adds to the the challenge around it but that's just a broad overview i don't know if Derek's able to come in this specific it's an interesting picture in one thing i would caution members when you read the financial papers in college outcomes etc that non-sfc funding doesn't equate to commercial income as Andy was saying you know skills development Scotland other local authority to a lesser extent etc and of course the fees of individual students coming through can be quite quite sizable um simple answer have we been working as colleges to bring that that level commercial activity yes we've been trying to drive that but for examples the the confusion that we've had this year hasn't helped on flexible workforce development fund for example the flexible workforce development fund has been a great success especially when it's been opened to SMEs as well i can talk about my own college in the Glasgow area and across the board in general it's been very welcomed it's quite flexible for example and what that allows is many companies to do is upskill and reskill and again funded through the Scottish Government this year that money has not been forthcoming we are now making an assumption within my own college that it will not be coming forward for this year and that has been a great disappointment but one of the aspects that we have when we're dealing with we do with a lot of SMEs for example and again we're an SME built economy SMEs often will sit and wait to see if there's to be any government subsidy because of the confusion and uncertainty there we do know that we have some companies that will not engage at the moment because they're waiting to see will there be support from there so one element there that has caused there's a bit of difficulty going forward there is an issue for example with industry being the large companies and small companies contributing towards their own their own training but again that comes because of the confusion of the landscape in my view in the view of many my my colleagues flexibility to me is the key word here again trust in the colleges and institutions working extensively with local employers and industry bodies etc to perhaps subsidise you know dual fund priority areas etc i was just going forward is the way to go forward to assist in building that commercial element pure commercial work is a proportion of almost every college's income is extremely small we must bear in mind it's the for reinvestment in the core business it's only the margin that that margin is only going to be at a maximum of about 20 25 percent perhaps i can't speak on behalf of all colleges but it's comparatively small the amounts of money that we are talking about here and again by my calculation for my college and bearing in mind i'm not the largest college i'm a bit of mid-sized college over the the five-year period that we are asked to project of a flat cash settlement leaves a black hole cumulatively over that five years of an excess of 12 million pounds for myself and my turnover is 33 million pounds so just to give you a quantum of the amount of money we're trying to save when you're dealing with aspects of that the amount of money that we could expect to bring the commercial pales into insignificance to be quite honest to you but it is a very important aspect for us to to drive forward we do have exceptions within Glasgow the city of Glasgow college over decades and decades of obviously nautical education is a worldwide phenomena and some colleges do have you know these specialist elements where they do do well but the idea of a commercial income increasing to a level that would really have any real dent in the financial situation we have now is unrealistic but it's fit but i do you know emphasise a very very important aspect and colleges are doing everything they can to drive that forward that's really helpful to hear that Derek i mean you talked about flexibilities there as well do you need different better revised flexibilities to enable you to pursue these directions if you so wish to generate more commercial incomes you need more flexible more power would you need yeah absolutely it's not so much power it's a flexibility to work with industry bodies to work with you know local skills planning for example through we've got the economic regions we work very closely with glasgo city region which is although it's got the word glasgo and it's much wider than glasgo it's you know north likes south likes i think there's eight local authorities involved in looking at those needs and alignments the other things we have we have multiple streams of funding i mentioned skills development in scotland modern apprenticeships enormously important in my own college we have at any one time 900 apprentices receiving training at any one time we have you know national specialisms and as far as that's concerned that is funded through skills development in scotland through a completely different stream firing across for example prioritising the need is very very challenging as far as that's concerned so a streamlined approach flexibility as far as that's concerned and again to work in partnership with industry bodies is there a methodology that we can do we can actually match fund for example and encourage industry looking to increase impact so i do think there's a lot of things we can do in that space so the key word being across the board and general terms flexibility but also in these particular specific areas it would be very productive that's really helpful thanks for that i think maybe Stuart wants to come in there back to you andy you know just very briefly if that's a thank thank you yeah so the you talk about flexibilities there and the the colleges have been offered a number of flexibilities in this year we've sought these flexibilities over a number of years and actually some additional ones but we've got some of these it is a it is a regional picture so they benefit some these flexibilities benefit some colleges more than they benefit others depending on their regional situation make-up of courses either in area of growth or or not so so i've got to bear that in mind but but the the the flexibilities we've we've tried to call them foundations because we want to see them embedded in rather than needing to seek them each year and if we're going to overcome a burning platform we need to get good foundations in to that but but just maybe the more fundamental point is the looking at the underlying funding model because i don't think it's an exaggeration to say if the funding model was correct we wouldn't need these flexibilities and so i think one of the key elements is doing the work to actually look at fundamental changes to the to the overall funding model for the college sector thank you Stuart you wanted to come in i find the discussion around this disturbing and i actually think that we're now talking about what is genuinely the biggest risk to the college sector the risk we're talking about here is changing the entire nature of what is a public sector education service that's what this is all really about and they spoke about changing a business model what that really means is if you're growing income through commercial income or growing business subsidies that's private sector income that's private sector income and influence coming into what's a public sector service it changes the entire nature of further education if you grow commercial income and business subsidy it's the answer to what is and i agree with you Derek chronic underfunding it's privatisation and we have to say what it is there comes a tipping point then there will come a tipping point in the future where colleges move further away from community based learning from their wider societal mission in order to serve the needs of business and the economy that's only one part of the wider array of things that colleges do so if we're going to be going down this road it is the wrong answer to the right question colleges are public sector bodies they are an education service focused on the public good they should be funded as such increased privatisation through the back door it's not the answer i think sorry i think i think john wants to come in i think he's been in already Andy on this so an alley wants to come in so maybe john an alley yes thanks very much it was just to kind of pick up on Stuart's point there and certainly in unison's point of view this could potentially lead the Scottish government to a similar situation where they were in during the pandemic with social care but essentially they needed certain things done in certain ways for certain reasons and did not have to control anymore because social care had been outsourced even you know to charities etc are not just private companies and they did not have the control to get what they needed and i think that we are in genuine risk in further education where we are going to be for economic reasons the line on colleges to deliver certain things at certain times in order to meet you know whatever aims are in place at that point but if the colleges are dancing to someone else's tune you will simply not be able to do that so there's a genuine risk to Scottish government planning in the future over and above unison's obvious concerns about public sector provision moving into the private sector thanks very much yeah and just to to add on to this as well i'm sure people might have seen me nodding vigorously to everything that Stuart was saying because i really do agree and i think it is a huge huge risk and this is i think it comes back down to this point of what colleges are and what colleges are thought they are about community based education education is something that is an inherent good it is an inherent public good and we should value that we should value education in and of itself um and i have real real concerns about bringing in i think it's not always inherently a bad thing to to have some level of you know to have industry and businesses and things like that involved in some way shape or form because sometimes that can be beneficial in terms of you know particularly around you know gaining skills um around particular industries but the moment you start adding money and funding and things like that to that what it does is it it removes i think the independence of that education it also narrows down options and choices for students and we've heard uh already some of the various issues around your choices for students already being narrowed down due to the chronic underfunding i think we we need to remember that colleges again it's then they're not just a place where someone goes in they want to get a job here so they go to college so that they can get the piece of paper that allows them to get that job that's just not that's just not the reality colleges are so much more than that they're so much better than that many students for instance will access college in order to perhaps progress and transition into university for instance and i have real concern around how those transitions and those pathways would be affected by um you know the sort of you know bringing in uh you know industry and and uh you know those funding models how that would impact um students freedom and and choice there so i have i i share uh the really strong concerns that stewart and john um have have pointed out and i think that this ultimately comes down to colleges of public sector bodies they should be funded publicly they should be funded by the scottish government and it's i think scandalous quite frankly the chronic underfunding that we have seen in recent years it's it's i mean some of the things we've heard throughout the session already around the state of the estate and things like that i mean they're frankly embarrassing uh to be perfectly honest and i think that that have been solutions that have been presented the the scottish trade union congress last year published i think a very very good paper as part of their scottland demands better campaign around progressive taxation and because i totally acknowledge the the really significant difficulties that the scottish government faces at the moment but ultimately this is about prioritisation i think we have to recognise the the the value of scottland's colleges we have to recognise just how critical they are to the scottish government's goals of things like lifting people out of poverty it has to be a priority they need to be funded by the scottish government and i think for instance the sduc's paper there brings up some some options that the scottish government has in terms of raising the revenue in order to be able to invest in scottland's colleges and in our education system okay thanks um i'm very conscious of the time and we are anxious before we conclude uh to look at things like the scottish funding council's new model of distribution and what impact that will have and will the wither review as well as something that we will turn to so i want to invite the deputy convener Sharon Dowie to guide us through this final section of our discussion this morning. Sharon? Thank you can i start by asking your views on the scottish funding council's new funding distribution model and the extent that it provides colleges more flexibility and more opportunity to decide how best to respond to local regional and national needs in this start with eric. I appreciate that that's a title of a document there is no new funding model there has been adjustments to an existing funding model and they have been very very minor they are very welcome so i will say that our interaction with both scottish funding council and scottish government colleagues we are have been listened to we've had discussions but these are purely short-term responses to requests and he was mentioned about an ongoing request for flexibility we were more talking about a future model your long-term model within that but yes we have been offered sometimes i would say at the 11th hour sometimes in the middle of a year that's already active sometimes retrospectively but again i'm not complaining about that the fact that the fab tend is a positive point and have been some movement but i have to clarify that these are very small and immediate responses and they're certainly not a reshaping of an overall funding model which is absolutely essential moving forward and we need to be in dialogue now because it takes time to look at that because we are talking about a new and i know the scottish government have committed to a new funding model for post-school education which are welcoming and that's something we should be looking at in the year now and start to develop moving forward but yes there have been some musiments and some flexibilities that are welcome but they certainly do not change the overall situation and the magnitude of the situation we're talking about now it may prevent some colleges getting into severe difficulty at this moment in time but these are survival mitigations as opposed to anything else i'll come back to the new model for a second question and that'll come back later to ask Andy. Just to build on that this is the sort of two stages we've got here we've got the dealing with the immediate issue and we've got then been able to plan going forward and to take some of these opportunities to get some sort of more medium long-term settled in so the the flexibilities that have been offered and Derek's quite right it's changes to the current funding model we've gained those as i say different different colleges that they're more beneficial to some regional colleges and others but they are there and they have helped in general to to deal with the immediate situation we're in around some of the flexibilities they've they've offered there but as i mentioned earlier that the fundamental question is actually to look at the funding model itself which is sort of more medium term as as Derek's saying but we want to see that come in in the sort of first academic year it possibly can so we're keen to see those conversations develop as quickly as possible on the new funding model. I agree with what Derek's saying and I actually think what Derek's said about this new funding model if i don't believe it is a funding model says is concerning because it's just a sticking plaster to the overall situation of chronically poor funding it's been hard for unions i'm sure john's in the same position to actually find out concrete details around this because we don't have regular meetings with the sfc but you know the specifics of it like rebasing credit allocations well that's either positive or negative depending on who you ask and have a different answers from different colleges on that one the Scottish government supported that that's a positive thing that the sector wanted but i've had several principles tell me they didn't want it and i don't think it's clear what significant impact there is in terms of the serious financial challenges in ensuring that 20% of college funding is not directly linked to credits i'm not sure what that does either to be honest it's a sticking plaster at best or at worst what Derek has outlined i think i'll move on to my second question straight away then and then i can bring it if you get any comments in the first question you can bring them in after the second one in the interests of time so the Scottish government plans to take over national responsibility for skills planning and to establish a new national model of public funding for all colleges universities apprenticeships and training so if you tell me the extent to which these changes will help address some of the challenges facing the colleges sector and just on that if you can tell me maybe the if you think the pace is quick enough so it's something that i think everybody's been thinking of for quite a while i'm quite sure everybody will already have thought of what model we actually need so given the the issues that you've already raised during this session are we using are we moving it a quick enough pace and i'll maybe bring in stewart first just because his comment earlier on had said it was the wrong answer to the right question which i i said the majority of the weather report is the wrong answer to the right question the Scottish government taking over responsibility for skills planning i don't think is in of itself anything really new the strategic responsibility for college education has always sat with the Scottish government so that's not new what's new is the language around skills and that concerns the eis from an educational perspective if unchecked the language around skills could lead to a narrowing of the curriculum and Ellie mentioned that earlier colleges do deliver schools but they also provide learning pathways and provide learning opportunities for a wide cross section of society if the recommendations of the weather report review are taken forward then it's not simply the Scottish government that's going to have input nationally and regionally on skills businesses are going to be in there and that is one of the key recommendations at national and regional level there are businesses in the Scottish government that are effectively defining the college curriculum i find that concerning the eis finds that concerning one of the reasons we find it concerning is we were not consulted on this review the first i heard of the weather review was when the minister for education mentioned it to me the eis was not consulted professional services unions were not consulted in our case that means educators the ones that will deliver the education were not consulted so from an educators or a former educators perspective if you have an unbalanced evidence base you're going to get an unbalanced outcome so i find the whole acceptance of a direction of travel and weather concerning so the pace of change if it's fast would concern me because i think there's an awful lot we need to talk about about with us and whether or not it's actually a good thing i talked about privatisation by the back door if you have business effectively defining what the curriculum that colleges deliver will be that is privatisation of the curriculum and that's wrong because again asn community learning pathways to universities those things fall by the wayside on a narrow views or a narrow focus on skills and what businesses needs business absolutely have a role to play the absolutely should be part of it but it should not be in balance to what they need we have to think about what the community and society needs as well thank you i bring in Derek and then i'll bring in early afternoon a direct answer it's certainly not moving fast enough in my opinion there has been commitment at the moment we don't know what that that picture is so for example am i in favour of moving forward in a new tertiary whatever terminal tertiary educate or post school education funding model yes absolutely i'm in favour it needs completely overhauling as i call it sector are we in favour of moving to a single body for example if it's done correctly in the vision that we would have then yes moving forward there's a little bit of a paradox within the weather's review because it talks in one hand about central responsibility of the the government but also talks about regionalisation that is something that needs to be clarified moving forward you know colleges have a view on that we do think it can work the high level strategic direction in sure it's right obviously ultimately the responsibilities with ministers as far as skills are concerned however i do think there needs to be a step change and there needs to be more strategic direction that is directly so i would support that however this paradox between the regional element of it needs to be resolved and again that is why colleges want to be in amongst that conversation take on board steward's points about consultation with unions as well so i would like to see that accelerated i understand we have you know the purposes and principles have been set up and we have a set of commitments in response although not formally in response to withers but it obviously aligns it with withers but there's an enormous amount of work to do there we've also got the implication of the potential of looking at you know the merger of three funding bodies that is going to take significant time that's an extremely complex thing to do we can't wait for that in my opinion and an opinion of principles going forward so i welcome the fact that that's been stated by the Scottish government by the minister but i'm not convinced that the realistic timescale is the cognizant of that i think that something needs to be driven forward i can't comment on the new because i've seen absolutely nothing that describes what this new framework would be other than it would be for all education training and skills the other interesting phenomena that stands is for example the the directorates within the Scottish government i'm involved in a lot of discussions about skills at a regional level i mentioned Glasgow city region and again it's reporting through economic development does it report through economic development does it report for lifelong learning skills this is a phenomenon that i think is needs to occupy the Scottish government and ministers going forward can directorates work together i'm absolutely sure that they can but as a person and as a group and as a sector feeding into that i'm a little bit unsure of those those pathways because quite clearly Stuart was pointing out about okay we've got an economic need here we are still educationalist within that i don't think i'm not quite so concerned but i can understand Stuart's points in there because i think we can balance these needs in these demands but we do need an element of clarity going forward between that economic development piece and lifelong learning and skills were you involved in the review in any way were you consulted on it not other than well as groups of principles feeding back to james withers for examples visits to colleges etc as he was gathering evidence that is the involvement providing information okay thank you ailey once again you may have seen me nodding along to to what Stuart was saying i do you find it concerning some of the narratives in that review and again we weren't consulted on that in terms of yeah so in terms of some of the the stuff around moving to a sort of single funding body that that could be a good thing if done well and if done properly um you know in terms of if that means um so we're bringing together new if it can make it easier for students who are maybe moving and transitioning between different models of education around things like apprenticeships colleges universities things like that that could be beneficial the problem is is that if we're changing the funding model but we're not injecting more funding into a chronically underfunded sector then all we're doing is just changing the way in which we're chronically underfunding scotland's colleges we're not actually solving the problem and i think this is the issue here this we're not inherently opposed to to these reforms and like i say they could be they could be good in terms of some of the stuff around moving to you know a single funding body um the stuff around um around a new sort of private sector coming in and business influence and things like that that is very very concerning um but like I say we this this can't be something that just happens um without without injecting more money because the fundamental problem here the issue that underlies all of the challenges that we've spoken about during this session is that scotland's colleges have been chronically underfunded for an extended period of time and the only way that we're going to fix that problem is by the Scottish government stopping you know stopping underfunding them and starting to fund them properly um in terms of some of the narratives around sort of skills again not inherently bad but a concern around how that can lead to sort of an almost more transactional education model and and that worries me as well you know this sort of idea of okay you go and you do this course and you get this skill and then that's that's you I think again if we're looking at the skills and the education that students are receiving from any method of education like I say whether that is college apprenticeship on the job training university then that if we're looking at that more cohesively then that is a good thing but I have real concerns around making our education system more transactional and around the influences that certain groups and certain businesses certain organisations et cetera might then be having that removes the independence and removes the flexibility of that education system for students. Thank you Andy. I mean a lot of good points have been picked up already and looking at the withers I mean collectively the the college sector is generally supportive of the recommendations in withers that would include and of course that as Derek said it's about the detail that how that's taken forward but there's the potential there to do it in a way involving the colleges at key points to ensure it works so in principle supportive of the single funding body we need to make a clear distinction that it's not the same as a funding model they're two different things but supportive of that supportive of taking skills planning back into government we see advantages potential advantages of that what it is starting to create already is a sort of conversation cross portfolio in government and I think that's healthy about how colleges can help deliver on some of the policy drivers of other parts of Scottish government that isn't directly educational so training of certain NHS staff and delivering wins there and then really utilising colleges as a public asset I think that's very beneficial. It is key for the economy that there are in certain parts of Scotland the principle of the college now chairs the local regional economic partnership and I think that's good relationships developing but as we said earlier colleges are about the social side and the community side as well so it's not just the economic side and the reality is that we do need to remember that not every single learner in a college will even if they're successful bring direct economic benefit it's about a journey that each individual learner travels and they can be benefit for that individual even if they don't bring direct economic benefit we mustn't forget those learners in the economic conversation but the economic side is important and just one last point to pick up I mean colleges have always engaged with businesses in looking at curriculum development for example in relation to making sure that people that come through a particular course of work ready or you might get approached by a company that is looking for a thousand apprenticeships in something so there's always been that engagement with business and I think that's an important relationship to ensure that people come out those that are able to be to be work ready so just to just to clarify that point thank you thank you join you want to make any comments no I think that I agree with lots that's been said by Stewart and Ellie earlier on I think the only real point that was in my head was to point out that while we're talking about moving to a single organisation that we have unison members affected on all sides of this proposal you know skills development in Scotland etc and I know that our concerns on that side now clearly coming from further education to be honest committee I'm not well placed to speak to that but I think it's worthwhile just signposting that that there is concerns from different areas different sides of this proposal thank you okay thank you very much we we kind of at the end but I know graham simpson's got in the last couple of minutes we've got left graham's got a very specific question that he wants to raise so over to you graham thanks convener it's around the use of alms length foundations because Derek used you rightly said the colleges aren't allowed to keep surpluses you used used to be able to so prior to 2014 you could do that and then colleges were reclassified as public sector bodies so no surpluses so every college then set up an alms length foundation I think it was every college but so have that have have these foundations been used to any great extent and what is the current position just to clarify I'm personally a little unsure of every college but the vast majority of colleges established an alf at the time of moving under ons classification as you said the concept the concept was that if as opposed to being able to hold cash reserves that if you had a surplus in discussion with the Scottish funding council the funding council you may be allowed to transfer that into an alf to be honest in the last five to 10 years I'm unaware of many colleges that have made sufficient surplus that they would be able to put any a penny into their alf however there are colleges such as myself who is part of a merger and disposal of various assets there were certain amounts of money that are allowed to be held by the colleges to then use in the future as we went forward for investment infrastructure etc I can speak for example in my own college we do have a modest alpha amount it's very mixed picture across the board some colleges do have alves but there's so little in it it isn't worth speaking about because it's so small so some in realistically don't have any alves I'll give you an example I can speak for my own college you've heard the numbers that I'm talking about part of our plan and three-year plan is we will in the tall and tense parts exhaust the remaining money in our alf by the end of year three what we'll be using that money for we won't be using it directly for example for severance payments because that's not something that we can do however we will be using the money exhausting it to support other activities to allow us to to be fair and moving forward and reducing that that stuff and I do reiterate I do not want to reduce it is not operationally in my interests or my students interests to be doing that but it's the thing that we have to do the other element is what it allows me it doesn't solve anything that that amount of money that utilising that money all it does is allows me to manage it in a reasonable fashion over a period of three years because if I didn't have access to that money I would have to accelerate that possibly and do it within a period of two years so that's just an example it is allowed operational flexibility for my attempt to be as reasonable and fair to my workforce in that downsizing although I do reiterate the monies cannot be used directly each college has might have a different constitution the rules will be slightly different there are legal implications there okay but in that example I will be using that to assist in the overall cost and movement operationally in those three years but again the funding council are probably the only individual body that would be able to tell you directly exactly how many colleges have alfs and the amount of funds that are within them the last figure I had for your college which was in 2021 was you had 1.7 million in your alf at that point my local college south Lanarkshire at that point had 3000 but last year they they put in an extra half a million into their alf so a bit of an outlier you know is that something you've heard of um so in so when they were first set up for the reasons Derek outlined there was there was just over 100 million was put in which was effectively the reserves from the college at that time we've got to remember these are independent foundations they're not directly connected to the college the college has to put in a business case and apply for these funds back the last time we don't hold the data directly the last time we surveyed the colleges was pre-covid and the amount was down if you're taking into account what was held in them or had already been agreed to be committed when a business case has been put in it was down to about half the original amount that was put in but it's whilst there may be an odd outlier and it is an odd outlier um the the the alfs are reducing because um they are drawing um I don't have a figure of what that stands at today but there are different rules and constitution you know the the the rules that have set up and um I think I'm right in saying for for the vast majority of not all it has to be spent on non-recurring spend uh the the the alf money uh and I do believe it wasn't quite every I think every college set up an alf but not every college actually had anything in an alf uh but yeah yeah so I was just clarifying convener I'm happy to leave it there right thank you very much indeed and can I um then draw this morning's uh evidence session to a close I think um I reflect on the fact that the closing paragraphs of the Auditor General's report states bluntly addressing the challenges facing the college sector cannot be avoided or postponed and I think from the evidence we've taken this morning certainly everybody around this table is clear that that is an absolute truism and as I mentioned at the start when we get to January we will have the Scottish Government and the Scottish Funding Council before us and as that paragraph goes on to describe there's a responsibility that lies at their door and we will do our level best to try and get some answers from them but can I thank you this morning for your evidence very lucid and forthright and valuable to us as a public audit committee good luck for those of you involved in your negotiations this afternoon you might be travelling in hope rather than expectation but hope is a variable valuable commodity so can I thank Ellie Derrick, John, Andy and Stuart for your time and the insights that you've given us this morning and I'll now move this morning's committee into private session thank you