College bosses in Scotland have warned of a “looming skills emergency” because of a £51.9 million funding cut to the further education sector.

Colleges Scotland say that if the Scottish Government’s draft budget goes ahead, institutions may be forced to freeze recruitment, outsource support activities and increase class sizes.

As it stands, colleges are set to lose £23.9m ‘due to inflation’, with an additional £28m removed because of the loss of Covid-19 funding previously received.

Colleges Scotland’s forecast cut does not account for increased pay and rising energy costs.

This comes ahead of the stage one budget debate at Holyrood on Thursday. It is expected the spending plans will pass through the parliamentary process unchanged thanks to the SNP government’s coalition deal with the Scottish Greens.

Ken Milroy, chairman of Colleges Scotland, said: “This is a real emergency for colleges coming after years of underinvestment. Regarding the sector, the debate on Thursday should focus on the perilous choices some colleges will now have to make, and on the significant challenge this Draft Budget poses for the next academic year.

“The total funding loss of £51.9 million means, for example, freezing recruitment, outsourcing of
support activities, possible changes to temporary contracts, increasing class sizes and consolidating classes. All of these would be a last resort, however after years of under investment this Budget leaves no more space to manoeuvre in. Unless there are improvements in the Budget, noticeable changes to colleges are inevitable.

“We believe this risks Scotland sliding into a skills emergency. Figures released today* from the
Scottish Funding Council show that colleges even in the midst of a pandemic exceeded their
activity targets during 2020/21. But in order to continue there has to be investment based in
reality. Scotland’s recovery depends on creating year after year a workforce that is qualified and
able – with the proposed Budget settlement colleges will be challenged in ways not seen for many

Pam Gosal, Scottish Conservative shadow further education minister, said the warning must be “urgently heeded” by education secretary Shirley-Anne Somerville.

She said: “The SNP have failed to fully fund our colleges during their 15 years in power and they look set to hammer them with devastating cuts once again.

“As we recover from the pandemic, the SNP should be focused on creating new opportunities and boosting skills among our workforce.

“That simply won’t happen if the SNP press ahead with these cuts. It flies in the face of what Nicola Sturgeon says about education being her number one priority.

“These concerns should be urgently heeded by the SNP Education Secretary, otherwise there is a real danger of our economic recovery lagging behind.”

Willie Rennie, Scottish Liberal Democrat education spokesperson, called the budget cuts a “perverse” way to tackle Scotland’s skills shortage.

He said: “Everyone knows that 140,000 college places have been lost since the SNP came to power. Instead of squandering good opportunities, the Scottish Government should be making the most of what this sector can offer.

“There are sectors crying out for more people like education, the NHS and social care. Colleges should be empowered to drive recruitment to fill those gaps.

“Curtailing budgets seems like a perverse way to tackle Scotland’s skills shortage. Scottish Liberal Democrats want to restore colleges to a powerful role in local economic development, training people of all ages in the skills they need to start – or change – their careers.”

According to a survey carried out by The Open University, 62 per cent of organisations in Scotland are struggling to find people with the right skills. In particular, there is a shortage of specialist, entry level talent, including business-critical digital skills.

And an Audit Scotland report last week found that “urgent action” is needed on national workforce planning to ensure those entering post-school education are able to access the skills they need for modern job roles.

Jamie Hepburn, the Scottish Government’s further and higher education minister, said: “Our colleges, universities and their staff are vital to our Covid recovery and we recognise the importance of sustainable funding, not only to the stability of our institutions but also the learning experience and well-being of our students.

“Throughout the pandemic colleges have demonstrated resilience and flexibility to continue delivering the courses to produce a skilled workforce. They are instrumental in any economic recovery strategy – working with the small and medium sized enterprise base on upskilling and re-skilling.

“In our 2022-23 Budget we will provide over £1.9 billion for Scotland’s universities and colleges – protecting their role in driving an inclusive economy, delivering high quality education and training for the future workforce. We know our colleges face significant financial challenges which have been exacerbated by the pandemic but we are working closely with them to mitigate the effects of the crisis.”

According to Colleges Scotland, the sector was facing a series of cost pressures prior to the impact of Covid-19, including pay awards, employers’ pension contributions, changes in National Insurance costs, maintaining the college estate, and the UK’s exit from the European Union.

It was announced by finance secretary Kate Forbes in December 2021 that colleges would receive £675.7m in revenue, plus £74.7m for capital, for 2022-23.