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I understand—anyway, it is now a matter of record.

That leads on to the wider discussion about what colleges do next. Their situation is clearly not sustainable. You talked about the colleges as going concerns. They will not be going anywhere, but they will be very concerned when they suddenly find that they are running out of cash. As has been said, cuts can be taken only so far, so wider reform has to be part and parcel of the conversation.

The college sector is not immune to reform—it has been reformed previously. You talked about the move to being public bodies and changes to structure, and we have talked a little today about changes to the financial models. There has been amalgamation over the years, and there has been a reduction as well as an increase in the number of colleges, so that sort of stuff happens.

I appreciate that some of it is about policy, but it strikes me that there has been a conversation about reform for some considerable time. For example, the 2023 Withers review of the skills development landscape made a large number of specific recommendations that do not seem to be going anywhere. You expressed those concerns in your report. Will you elaborate on why you think that the Government is not moving at pace with some of the reform?

I have been listening carefully to your responses to the many questions that you have been asked today, and I have written down some of the phrases that you have used. The words that keep coming up are “slow” to progress, “limited progress” and “lack of progress”. Progress is a good thing, but a lack of, limited and slow progress are not. Is there a reason why you use those phrases so often in your analysis of the Scottish college sector?

Absolutely. In your briefing, you allude to the wider role of colleges in relation to strategic planning. There is a bit of talk about a new national skills approach, which we will see in March next year, which might be a bit too late for some of the colleges that have been mentioned by others. There is also reference to simplification of the funding landscape, regional skills planning and all the typical buzzwords that you would expect from working groups and reports of this nature.

The root of the issue is the wider role of colleges in education and in economic development. I was struck by some of the briefings that we got ahead of today. We are told that 33 per cent of all college learning is in the care-related sector, which includes childcare, social care and healthcare, and that 24 per cent is in science, technology, engineering and mathematics subjects. Both those areas are endlessly crying out for more people. We hear daily that there are shortages of people in STEM subjects and in the care sector, and colleges are perfectly placed to deliver some of those skills and resources, but those institutions are facing cuts. It strikes me that there is a slight imbalance to having an economic strategy that aims to fill those gaps in the economy, while pulling the plug on the funding for the very institutions that can deliver that.

Is there any particular reason why the average spend on college students is substantially lower than that, say, on secondary pupils or university students? The figure is around £5,000 per student in colleges, but £7,500 in universities, even though colleges deliver 26 per cent of higher education learning. There is a real disparity in investment in college learning.

You mentioned the six colleges that are experiencing significant financial difficulties. I appreciate that you do not want to name them because the situation might change as further audits come forward or analysis is done on their finances, but it sounds as though they are in a perilous financial position. What happens when a college simply runs out of cash as a public body?

So, one solution would be simply for the Government to give more cash to the sector.

You can only cut so far. There must come a point when you suddenly cannot pay your bills—when you cannot operate the buildings, pay your staff, buy anything or replace anything that is broken. If that was a business, it would go bankrupt and close. I am trying to understand what happens in a public sector environment. Would the Funding Council simply loan a college cash if it had no reserves? Could a college borrow money, or would it simply have to close altogether?

That message is loud and clear, and it has been widely reported as such off the back of your briefing. However, there is a false economy to trying to make ends meet on an annual basis simply to make your accounts fit for purpose. Redundancies come at a cost. We have talked about the educational, social and even moral impact of making redundancies, but there is also a financial cost. You are hoping that it will save money down the line, but it costs money up front to pay people off. It seems like a short-term fix to a longer-term problem. Is that a correct assertion?

I point members and the Auditor General to my written question S6W-30005, to which I received a response late yesterday afternoon. Ahead of today’s evidence session, I asked the Scottish Government to comment on the Auditor General’s report. The reply from minister Graeme Dey is quite illuminating with regard to the Government’s thinking on issues that we have just talked about. In the second paragraph of the answer, the minister writes that

“It is the responsibility of each college to manage its operations in line with”

its funding and that the Government expects colleges to “reassess” their models

“and explore avenues for cost reduction”.

However, in the first paragraph, he also says that ministers recognise the role of colleges with regard to students’ development but also with regard to Scotland’s economic growth. Those two statements do not exactly seem to match up, shall we say? Perhaps that is more of a comment than a question.

I might come back in later to talk about wider reform, but I am sure that other members have questions in the meantime.

Good morning, Auditor General and guests. The college sector is very important to the experience of young people in Scotland, workers and the general wider economy. You highlighted that very well in your report.

I want to drill into the meat and bones of the numbers and the state of the funding. I will use the word “crisis”, but I will leave it to others to use their own language.

In your opening statement, Auditor General, you mentioned that we have had three years of cash freeze and, this year, a reduction in funding, which equates to an overall reduction of 17 per cent in real terms. I want to tease out what you think the effect of that has been. I have not been on the committee for long, but that issue has been raised by Audit Scotland for a number of years. My impression is that it is not a new problem and that it seems to be getting worse.