The formation of Edinburgh’s new ‘super-college’ is being underwritten by millions of pounds in public funds used to pay severance packages, documents obtained by The Journal show, amid an increasingly unhappy response from staff and student representatives to the ongoing merger process.

The Scottish Funding Council approved £7.7 million in funding for the amalgamation of Telford, Stevenson and Jewel & Esk colleges into the new Edinburgh College, according to correspondence between college chiefs and the SFC — including £3.8 million earmarked for voluntary severance payments.

Edinburgh College, which is to be formally vested next week, will instantly become one of the largest further education institutions in Scotland, with an enrollment of around 35,000 students. The merger plan was earlier hailed by the three participating colleges as an “exciting project to create a dynamic new college for the Edinburgh city region.”

The new college is seen by policymakers as a crucial pilot for the Scottish Government’s controversial post-16 education reforms, which seek to ‘regionalise’ FE by reducing the number of colleges in Scotland from 41 to 12. In an interview with The Journal, education secretary Michael Russell said that college leaders “have been very positive about making that step, and it’s going to produce big benefits for learners in Edinburgh... there are a lot of different activities going on in colleges, and I think [Edinburgh College] is making sure that those activities are undertaken as efficiently and effectively as possible.”

But documents released under freedom of information legislation and interviews with sources at the college suggest a painful, expensive process, marred by uncertainty and significant job losses and set against the backdrop of massive cuts to the further education sector. Days before the merger formally takes place, staff are said to be “disgruntled” with the process.

In a funding application dated 27 February 2012, the principals of the three constituent colleges warned of “the need to rapidly reduce headcount in all areas if the [new] College is to be viable.”

The document estimates the total cost of the merger at £17.6 million. Facing a drop in annual grant income of £9 million over the next three years, the college’s strategic plan, as outlined in the funding application, forecasts £10.5 million in voluntary redundancies. A spokesperson for the college told The Journal: “An allocation of funds for this purpose for the year 2013/4 has been agreed with the Scottish Funding Council. But it has to be stressed that these funds have not been drawn down and no final decisions have been taken on how or where these funds will be used.”

“Edinburgh College does not come into being until October 1. All decisions on its future direction and strategy will be managed by the Board, who have yet even to meet.

“Until then we cannot comment on any future policy or operational decisions involving the College.”

John Martin, president of Edinburgh College Student Association, told The Journal: “The voluntary severance scheme funded by the government has seen us lose 150 staff over the summer. “The staff are dedicated to education and are working hard to minimise the effect of the cuts, but the worry I have is that staff are at risk of becoming increasingly stressed and as morale drops, we need to closely watch the effect on students.”

But a leading figure in the Educational Institute of Scotland’s Further Education Lecturers’ Association pegged the number of job losses even higher. Don Gluckstein, convener of the union’s salaries, conditions and services committee, told The Journal that 169 jobs had already been lost, including over 100 teaching staff. The target, he said, was for the college to shed 240 jobs over the next three years.

Dr Gluckstein, a lecturer in history at Stevenson College, said: “We have asked from the very start for an educational rationale for the merger, and we’ve never had it. Our view is that the merger is about putting through the cuts.

“If there’d been an educational rationale, there would have been much less disquiet, but because that’s missing, we are convinced that it’s really about enabling management to push through the cuts more easily.”

On 21 May 2012, in the first of two grant letters to the college principals, SFC chief executive Mark Batho wrote that funds would be made available before the merger date, “to enable the individual colleges to support voluntary severance schemes prior to the planned vesting day”.

But the submissions offer few insights into the precise nature of this staff rationalisation process, noting only that “the individual colleges would approach the exercise from different perspectives. Some may reduce management layers; others may have to stop offering areas of curriculum.”

Little is yet known the possibility of course cuts, sources said. It is likely to be a year before final decisions are made on curriculum alignment within the new college. Staff unions at the college are understood to be unhappy about the process: one trade union activist told of a “quiet resignation” among staff.

But in the short term, union leader Dr Gluckstein said, a negative impact on teaching was “inevitable”. “They’ve spent a huge amount of money getting rid of people,” he said, “and there’s not a lot left to spend on education.”

“Even without the actual fact that it’s taking place in cuts terms, the disruption is inevitably going to be damaging,” he added.

The revelation last month that Mandy Exley, the former principal of Jewel & Esk college recently confirmed as the inaugural principal of Edinburgh College, was a leading contender for the job prompted an angry response from a major education sector trade union.

In a statement, the Educational Institute of Scotland that they were “gravely concerned that one of the applicants for principal is currently in situ at Jewel & Esk College,” citing Denison survey results that “reported low staff morale, a lack of confidence in operational procedures and leadership, uncertainty as to the future and poor communication on the part of the executive.”

Ms Exley’s tenure at the Midlothian college had been marred by morale problems and cutbacks, one Edinburgh trade unionist told The Journal, earning her the derogatory nickname ‘Mandy Axely’.

But Ms Exley is not without her admirers: after her appointment earlier this month, college chair-elect Ian McKay said the board were “delighted to have someone of the calibre and pedigree of Mandy Exley lead Edinburgh College at the start of this exciting journey.” The college will be formally vested at a ceremony at the Assembly Rooms on Monday 1 October.