Basis of Financial Projections
The main assumptions in preparing the merged college financial projections for the years 2010 -
2013 are as follows:
• SFC Grant Funding of £19.1m is assumed to fund the initial merger costs.
• No restructuring costs after the initial merger restructuring have been included, if this was
required it is anticipated that these costs would be met by SFC.
• No adjusted have been made for any possible changes to the SFC grant funding formula.
• The net value of the SFC grant per WSUM to increase by 1% in 2010-2011 and no increase
in 2011-2012, 2012-2013. The Colleges' currently deliver 181,000 fundable WSUMs and
206,000 total WSUMs and this will remain static up to 2012-13.
• Disclosure for FRS17 SPF pension scheme has been fully incorporated on a like for like basis
for all three colleges. Projections include the actuarial estimate of the additional Income and
Expenditure costs for the years 2009-2010 only.
• There is no annual increase in the enhanced early retirement provision for the years 2009-10
onwards.
• Annual capital investment of £3M per year until the 2012-13 to maintain fixed asset value.
The capital investment will be mainly equipment as the NCG estates project progresses.
• The financial requirements in the medium term of the NCG major capital estates development
are excluded from the business case. The NCG project will be funded by a combination of
SFC, College and other external sources.
• Depreciation to remain at the current levels as a result of capital investment over the first 3
years after merger.
• Employee pay increases annually in line with inflation.
• Teaching staff FTE to remain at the current level in line with no growth of WSUMs over the
first 3 years after merger.
• Non-teaching staff FTE to remain at the current level in line with no growth of WSUMs over
the first 3 years after merger.
• Inflation cost increases of 1% annually.
• The average value of tuition fees per WSUM to increase by 2% annually. SFC annual
increase 1%, Colleges' 2%. Approximately 75% of tuition fee increases are based on SFC
rates.
• ESF income to reducing to 50% for the first year after merger 2010/11 and no ESF income for
the years thereafter.
• Education contracts remain at the current levels.
• Non EU Student Fees will increase substantially over the first 2 years of merger mainly from
GCNS.
• All hardship and bursary funds to be fully spent.
Appendix 6: Financial Projections
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APPENDIX 6: FINANCIAL PROJECTIONS