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FE college reserves legitimate and necessary - Empey

2 July 2009

Employment and Learning Minister, Sir Reg Empey, has clarified the position of Reserve funds held by Northern Ireland’s six Further Education colleges.

Sir Reg explained that it is entirely legitimate, and indeed necessary, for colleges to retain a certain level of cash reserves.  He said: “For example, it can enable colleges to invest in improvements to their buildings and capital equipment in order to improve the learning experience for students. Reserves also enable colleges to cope with any annual deficits that may occur from time to time, and I know some colleges have used reserves to fund one-off costs associated with the recent college mergers.”

Sir Reg indicated that the situation differed between individual colleges across the FE sector. He said: “However, over the past few years, my Department has been successfully working with colleges to reduce the level of Reserves held by them. It has been agreed with colleges that they can retain cash balances of 10% of income for working capital, which equates to around £24million across the sector.

“My Department will continue to work with colleges in this area. For example, one college has extensive plans to invest in its estate and IT infrastructure over the next two years, all of which will be funded from the college’s cash reserve.  

“The levels of reserve will be reduced to the optimum 10% figure as soon as possible. In the meantime, existing reserves will have been used to greatly enhance the learning environment and learning experience for students across Northern Ireland.”

NOTES TO EDITORS:

  1. Since 2005/06 the level of college reserves has reduced by around 18% to £44 million.
  2. All media queries to the Department for Employment and Learning Press Office, tel: 028 9025 7872.  Out of office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.