Recommendation 10

The Local Government Pension Scheme has had a deficit in recent years, and colleges have had to make payments to help cover the deficit, in addition to their standard contributions.16 Committee Members have been told of concerns about the potential impact of the deficit repayments on the balance sheets of otherwise financially healthy 7 C&AG’s Report, para 2.5 and Figure 4 8 Committee of Public Accounts, Overseeing financial sustainability in the further education sector, Session 2015–16, HC 414, 16 December 2015 9 Q 50 10 C&AG’s Report, para 1.15 11 Association of Colleges, para 2 (MCF00001) 12 Q 54 13 C&AG’s Report, para 2.24 14 Qq 57, 59 15 C&AG’s Report, paras 2.19–2.20 16 C&AG’s Report, para 2.20 10 Managing colleges’ financial sustainability colleges. The ESFA told us that the scheme’s deficit had grown to more than £3.5 billion and that, although colleges could negotiate, the scheme provider had the power to impose deficit reduction contributions.17 Payment of VAT