Finance Report Including European Funding

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Finance Report Including European Funding
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Finance Report Including European Funding

• Funding Councils agenda for Colleges Financial
  Security Campaign
• What is Financial Security
• Is Borders College financially secure
• What challenges does the College face in
  maintaining Financial Security
• Colleges Financial Strategy for 2005/06 through
  to 2007/08
• Update on European Funds in the South of Scotland
• Developing an Exit Strategy from EU Funds where
  no further funding available.

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SFEFC Agenda for the College Sector

• A three year target set for the sector by which
  time Colleges to achieve Financial Security by
  2006
• Definition produced of what represents Financial
  Security
• Funding Support provided by SFEFC (now SFC) to
  assist Colleges in reaching Financial Security
• Council set up benchmarking exercise at National
  level to assist Colleges in providing
  comprehensive Cost Data to establish best
  practice.
• Plans to be developed by Colleges of how they
  will reach Financial Health
• Funds set aside to provide support services for
  the Finance Directors Working Group

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Definition of Financial Security

• A College that is Financially Secure is one that,
  on a continuing basis, is able to generate
  operating surpluses reliably and as planned and
  through that accumulate a reasonable level of
  Financial Reserve.
• The College Board and SMT must ensure that over
  the medium to long term
• Colleges Costs lt Colleges Income
• College has Cash

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Borders College Response

• College developed a Strategic Cost Review which
  concluded College required to move to single
  site, Board should consider rationalisation of
  teaching departments
• College has over past 3 years moved from a
  deficit position year on year towards a small
  surplus position. NB extra cash has been
  introduced into sector!
• College cannot attain goal of Financial Security
  until in consolidates its activities onto one
  site and brings down those costs which are out of
  line with the sector.

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What challenges does the College face

• In moving to a new Campus the College can borrow
  only limited amounts as it cannot service
  significant debt
• Funding Gap exists on the move to Co-Location
  with HWU
• The College must every year seek to adopt Best
  Practice to drive down its cost of operation
• A tension exists between a desire to provide an
  excellent learning experience and the limited
  resources available

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Roger McClure, Chief Executive, SFEFC
Public funds are limited and so must be
rationed. The desire of Colleges to satisfy all
comers is genuine and entirely laudable.
Inescapably, the point must come where they can
no longer afford to provide for everyone without
risking their own survival. Faced with that
choice, they must choose to remain viable.
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European Funds in the South of Scotland

• College receives ERDF Funding (for Capital
  Projects) and ESF Funding to support training
  initiatives (Revenue Projects)
• Funding (both ERDF and ESF) come to an end
  December 2006
• Future funding likely to be much less and not
  allocated to the South of Scotland
• College received in 2004/05 384k ESF
• 2.8m ERDF

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• College relies on ESF income to support a number
  of training initiatives e.g. Workwise
• During 2006 the College must consider how to take
  forward training activities without the support
  of ESF Funding
• College will where appropriate develop an Exit
  Strategy from reliance on EU Funding