A survey has revealed a high proportion of senior leaders are concerned about the college finances.
Conducted by Capita’s further and higher education business last month, it found that 87 per cent of 36 principals and vice-principals questioned are concerned about the short to medium-term financial viability of their college.
It was undertaken for the launch of their white paper, The Vice Principal’s Guide to Efficiency: How Technology Can Help Cut Costs for FE Colleges, which reveals where up to £2 million of savings can be made in further education (FE) colleges.
The white paper looks at the role of using management information and data to improve efficiency in various areas.
Detailed areas where colleges might be able to make savings or increase income, include £1 million saved from improved student management, £750,000 saved from using staff and facilities to their maximum efficiency, £500,000 gained by maximising income and £25,000 saved from streamlining management and administration.
There are also potential savings to be made from shared services and introducing new business models.
The survey revealed that colleges already recognise that savings can be made by making better use of staff and facilities, with more than half (52 per cent) believing this has the greatest potential for reducing costs in their organisation.
This was followed by administrative processes (23 per cent)and new business models (16 per cent) such as mergers and shared services. In fact, 61 per cent of those questioned were already actively investigating the possibility of shared services.
George Layfield, UK sales manager of the firm, said: “Each student drop-out can represent between £5,000 and £10,000 of lost funding and recruitment costs yet, despite this, some rates remain as high as 20 per cent.”
John O’Callaghan, assistant director of information services at Hackney Community College, added: “There can be practical hurdles to overcome for leadership teams to make the most of the data collected on the management of their college, and it can be a challenge to foster a positive culture of data ownership.
“However, it’s worth persevering as data provides the only way to get true picture of how efficiently your college is running and if improvements can be made.”
When it comes to quantifying the reductions colleges need to make for 2012/13, the survey revealed that 61 per cent estimate they will need make savings of up to 10 per cent off overall college budget, 19 per cent believe it will be between 10-20 per cent and 13 per cent will be looking to make 20 to 40 per cent savings.
Mr Layfield added: “The survey reflects colleges’ on-going concerns over budgets and the need to make savings while protecting the student experience.
“The white paper sets out how relatively straightforward strategic changes such as increasing class size and having easily accessible, accurate date can have a huge impact on the bottom line without having a negative impact on learning.”