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Last Updated: Thursday, 10 February, 2005, 08:47 GMT
Colleges' deficits set to top 7m
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The colleges' organisation said funding had not matched costs
More than half of the 23 further education colleges in Wales are likely to end the financial year with a joint debt of 7m.

The figure, highlighted by Plaid Cymru, is more than double that recorded by institutions last year.

The body representing FE colleges said they had been financially squeezed, with increased funding swallowed up.

But Welsh Education Minister Jane Davidson said colleges had more than adequate funding.

What I know is 30% of college income comes from outside public funding.
Jane Davidson

At the end of last financial year, 13 of the 23 post 16 colleges recorded a joint deficit of 3.5m. This year that figure is likely to be double at 7.5m.

The organisation representing FE colleges, fforwm, is blaming increased pension and national insurance contributions as well as staff pay rises for swallowing up increased funding.

It claims that Elwa, the education and training body, is not allocating enough money.

Fforwm chief executive, Dr John Graystone, said: "The FE sector in Wales has endured frozen budgets for the last two years.

"In actual fact, colleges received less money this year. As predicted by fforwm, this financial squeeze has left the sector with a deficit of 7m.

"This situation has also been exacerbated by increased employer contributions, including pensions and national insurance, which have not been matched by ELWa ."

'Desperate situation'

Education minister Jane Davidson said fforwm and the unions had agreed the new pay deal and finance arrangements and said the sector had always received above-inflation funding.

She said: "What I know is that Elwa has increased the FE budget for provision by some 21% since Elwa has been in place.

"What I know is that I have a joint letter from fforwm and Natfhe, welcoming the fact that they have agreed all elements of the year two pay deal.

"And what I know is 30% of college income comes from outside public funding. I welcome all these things."

Plaid Cymru's leader in the Welsh assembly Ieuan Wyn Jones highlighted the figures and called it a "desperate situation."

"It is quite scandalous that the assembly government should seek to portray such a rosy picture of the financial situation in the further education sector when more than half our colleges are facing deficits totalling more than 7million. " said Mr Jones.

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