London college fights big deficit

Queen Mary College could accumulate a deficit of nearly £17 million over the next four years unless it takes steps to cut costs.

A summary of projected income and expenditure over the next five years shows that the University of London college could record a deficit of £5.8 million in the current academic year and one of £4.7 million in 2001-02. The projections reveal this would total nearly £17 million by 2005-06 if nothing were done.

Documents seen by The THES identify pay awards and administration costs as major pressures on the college's budgets. A paper by the director of finance and planning, Dean Curtis, says the college spent 10.4 per cent of its turnover in 1999-2000 on administration, compared with 8 per cent for similar institutions. "A saving target has therefore been set for the administrative departments of £1.5 million in 2001-02," it says.

The paper spells out the implications of a continued deficit. "Cash resources are severely depleted by the previously agreed investment strategy and there is not the internal cash resources available to continue financing a deficit."

It says action is being taken and the college aims to break even in 2001-02. This may involve some vacancies being frozen.

A spokesman for the college said: "In common with many in the sector, we had a difficult year but made a significant improvement in financial performance. We are confident we will achieve a surplus in future years through current plans to increase income - £3 million of the temporary deficit is investment from reserves to fund these plans."