Many thanks, convener, and good morning, committee members.
I welcome the opportunity to speak to the committee about Scotland’s college sector. Scotland’s colleges play a vital role in helping people to learn new skills and fulfil their potential. They also make significant contributions to supporting economic development at the local and national levels.
In recent years, we have reported on the challenges that the college sector has faced, including in responding to financial sustainability risks and focusing on improving outcomes for Scotland’s students. Those pressures continue, with anticipated challenging financial settlements for colleges in future.
My latest briefing focuses on the 2020-21 academic year. It highlights that Scotland’s colleges responded well to Covid-19 and that additional funding contributed to a better-than-expected financial outturn for the year. However, the financial position of colleges is now expected to deteriorate, with deficits forecast in 2021-22 and 2022-23.
The Scottish Government’s multiyear spending plans, which were announced in May, show a flat cash settlement and real-terms reduction for the Scottish Funding Council over the next four years. That indicates that there will be some really challenging times for the sector.
The Covid-19 pandemic had a detrimental impact on learning and student outcomes. The proportion of full-time further education students successfully completing their courses and achieving the intended qualifications fell in 2020-21 and, on average, socially disadvantaged and vulnerable students are still less likely than their peers to complete their courses. The varied impact of the pandemic across different groups of students has exacerbated existing inequalities. Changes are needed to ensure that the sector is financially sustainable in the long term and that more students successfully complete their courses.
The Scottish Funding Council made a series of wide-ranging recommendations to improve the further and higher education sector in 2021, and the Scottish Government and the SFC are starting to take forward those recommendations. They have prioritised work to set out the future role of the college and university sectors by May next year and to develop their national impact framework to assess outcomes by August 2023. In the meantime, the Scottish Government and the SFC need to consider how best to support colleges to prepare and plan for those changes now. It is important that they clarify expectations and priorities for the sector over the medium and long term and the funding that is available to deliver them.
As ever, my colleagues and I will do our utmost to answer the committee’s questions.