Scotland’s public spending watchdog has warned that most Scottish colleges are forecasting deficits in the next five years as the gap between their income and expenditure continues to widen.

The latest report on colleges from Caroline Gardner, the Auditor General for Scotland, shows Scottish colleges received £606.5 million in Scottish Government revenue funding in 2019-20, compared to £588.9 million in 2018-19.

It said this 1% real terms increase is to fund the cost of harmonising staff pay and conditions.

The report also shows capital funding for the colleges sector fell to £47.6 million in 2019-20.

Forth Valley College’s new campus accounts for £22.7 million of that capital funding figure, with £21 million allocated to “lifecycle and maintenance backlog” costs.

“However, the SFC (Scottish Funding Council) and colleges estimate lifecycle maintenance costs alone will cost £22m in 2018-19, notwithstanding the £77m the SFC identified as priority backlog maintenance costs in their 2017 estates survey,” warned the report.

The report added: “An increase in Scottish Government funding to colleges will cover only the costs of making staff pay and conditions consistent across the sector.

“Meanwhile, money allocated for buildings and infrastructure will fall short of the estimated costs of maintaining the college estate.

“Most colleges are forecasting deficits in the next five years, as the gap between their income and expenditure continues to widen.

“Only a small number of these colleges were found to have identified specific actions to deal with shortfalls.

“Despite these challenges, student numbers have increased, and the sector continues to exceed its learning activity targets.”

There were nearly 242,500 college students in 2017-18, an increase of around 6,750.

Gardner said: “Colleges are increasingly dependent on public funding to cover their costs, and it is likely that the gap between their income and spending will continue to widen without action.

“Tighter budgets make financial planning even more important.

“Colleges and the Scottish Funding Council need to do more to ensure they are as well-prepared as possible to deal with ongoing pressures.”