Scotland's Colleges Feeling Impact Of Funding Cuts

2nd October 2025

Scotland's colleges face changing how they operate due to ongoing financial pressures.

The sector has experienced a 20 per cent real terms cut in funding over the last five years. Colleges are already delivering less teaching to fewer students to balance their books.

And there is a risk that colleges could prioritise courses that are less expensive to deliver over those that meet local need.

The college workforce shrank by over seven per cent in 2023/24 as savings were sought through voluntary severance schemes. Despite these cost-cutting exercises, seven out of 24 colleges reported a deficit in 2023/24.

Two colleges also required emergency funding from the Scottish Funding Council to stabilise their finances.

Colleges are generally providing good quality services, with high satisfaction rates and proportionally more students going on to further
study or employment. But the need to reduce costs has impacted on students and staff.

Overall student numbers are down, and colleges are unable to meet the student and employer demand for some courses and apprenticeship programmes.

Stephen Boyle, Auditor General for Scotland, said, "Scotland's colleges are providing good services despite facing ongoing financial pressures.

"Funding has reduced and the demands on the sector are changing, with fewer older students enrolling, increasing competition from universities, and the impact of digital technology on delivering teaching.

"If those pressures continue, colleges will need to change how they operate rather than trying to deliver more of the same with decreasing resources."

In 2023/24, Scotland's colleges' net resource allocation from the Scottish Government was set at £675.7 million for the third consecutive year.

Over 30,000 fewer students were taught in 2023/24 compared to 2022/23.

Almost all colleges reduced employee numbers in 2023/24. Voluntary severance was the most common approach colleges used to reduce costs.

Colleges also utilised compulsory severance, vacancy management, role development and senior management restructuring. Our analysis suggests that redundancies have been broadly consistent between teaching and nonteaching staff.

The SFC's College Staffing Data 2023-24 report stated that 10,112 full-time equivalent (FTE) staff were employed at colleges in 2023-24 (including unincorporated colleges). This is a decrease of 845 (7.7 per cent) from the previous year. Staff costs still accounted for 65 per cent of expenditure in 2023/24 (67 per cent in 2022/23) as pay rises offset savings achieved from reducing staff numbers.

Colleges collectively delivered 1.565 million credits in 2023/24, exceeding the 1.553 million credit target set. But credit delivery in 2023/24 was almost ten per cent lower than the 1.731 million credits delivered in the previous year. The SFC attribute much of this decrease to updated guidance it issued to colleges, which led to fewer credits being claimed for each full time student's learning. Despite the reduction, five colleges did not meet their credit target. Four of these were within the two per cent tolerance allowed by the SFC and funding was not recovered.

West Highland College (now part of the merged UHI North, West and Hebrides) delivered 93 per cent of its credit target, but funding was not recovered because recovery is assessed at a regional level and the UHI colleges delivered 106 per cent of their combined target credits.

College enrolments, student headcount and FTE student numbers all decreased in 2023/24; 30,762 fewer students attended college in 2023/24 than in 2022/23, a decrease of 12.4 per cent.

In February 2025, the SFC reported an increase in the numbers of 18-19-year-olds attending college full-time in 2023/24.10 From a high of 27,162 students by headcount in 2014/15, the numbers steadily declined to 20,234 in 2022/23 before rising to 21,291 in 2023/24.

Data does not include one college for which we did not have a completed set of accounts and AAR at the time of reporting: UHI North, West and Hebrides.

Read the full Audit Scotland report HERE
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