Colleges may struggle to maintain provision, auditor warns
Further education colleges may "struggle to maintain" current provision in light of budget cuts, the Auditor General for Wales has warned.
Welsh Government grant funding for the sector has been cut by £22m over the past five years.
Auditor Huw Vaughan Thomas said while colleges were "financially stable in the short term," he was concerned about their financial planning.
The Welsh Government said it would consider the auditor's report.
The report shows core funding for full time provision has risen by 3%, while funding for part time courses has dropped by 71%.
The colleges were said to have responded to smaller funding settlements by cutting costs, including through "large reductions in the workforce".
Recent mergers were also said to have improved "financial resilience" across the sector.
The report said while financial management in colleges "is generally sound", their financial health varies and "medium-term financial planning is not well developed."
It said the colleges would "benefit from a more integrated and long-term approach."
Mr Thomas said: "While further education colleges have managed to cope with the cuts to their funding over recent years, it is clear that their finances are coming under increasing strain and that they may struggle to maintain the amount and quality of provision at current levels."
He added: "The sector needs some clear direction about its place within the wider policy context for post-16 education.
"There is also a need for funding arrangements to better reflect local changes in need."
The chairman of the National Assembly's Public Accounts Committee, Nick Ramsay, said: "The further education sector has a significant role to play in enabling young people and adults to fulfil their potential and in delivering a skilled workforce.
"It is, therefore, important that our further education colleges are financially viable and performing well."
Mr Ramsay praised the sector for showing "resilience" in response to budget cuts while sustaining its academic performance.
But he said it had come at a "significant cost with the withdrawal of much part-time provision and a loss of experienced staff."
ColegauCymru, the charity which represents and promotes post compulsory education and training, has welcomed the report but wants the Welsh Government to commit to longer term financial support.
Its chief executive Iestyn Davies said colleges "cannot be expected to plan ahead without a commitment from the cabinet that they can expect the resources to meet the demands of a changing population."