Ráðunautafundur - 20.02.1996, Page 14

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the public interest. To further its commercial development, SAC has, through the SAC Foun-
dation, set up an associate commercial company, COSAR Ltd.
Today, SAC operates in a highly developed market economy in which it is Government
policy that farmers and other clients should pay for technical and business advice which will
be of direct benefit to them. SAC, and its associated commercial arm COSAR Ltd, has an
international presence and a world-wide client base. The all-Scotland College (SAC) has been
very successfui in meeting the commercial chailenge it was set. Turnover has grown from
£18M in 1986/87, mostly grant aid, to £43M in 1994/95, of which only 45% was provided by
the Scottish Office as grant-in-aid in support of SAC’s three functions in Scotland. The larger
pait of SAC’s income is now obtained from client charges and sources other than government
grant-in-aid.
SAC’s operations are based on three Centres of Study (at Aberdeen, Auchincruive and
Edinburgh), with a network of 24 Advisory Offices covering the whole of Scotland, and 8
Veterinary Centres, together with 7 farms. SAC currentiy employs 1,370 staff, of whom 87 are
professional Advisers working with farmers and other land managers, and some 200 are
science and production Specialists providing specialist advice and analytical and diagnostic
services. Nearly all of these Specialists are also engaged in R&D or education or both.
FUNDING CHANGES IN 1987
In 1985 the Government announced reductions in the planned level of funding for SAC’s
R&D of 18% and for advisory work of 41%, to take effect in April 1987, as part of a more
general programme to introduce the philosophy that “the customer should pay”. In response to
these substantial cuts, the three previously separate regional Agricultural Colleges came to-
gether to form SAC, reorganised their farm Advisers into a single Advisory Service for the
whole of Scotland (with corresponding changes in the Veterinary Service), and introduced
charges for a wide range of services previously provided without charge or at very highly sub-
sidised rates. Market research was undertaken to guide price setting and the advisory income
achieved in the first year was in line with expectation. In each of the four succeeding years
invoiced sales to farmers increased by an average of 25% per annum; in the past three years
the increase has averaged 11% per annum each year.
Since 1987 public funding by grant-in-aid has continued at broadly the same level in
cash terms, ie declining in real terms. From 1987 advisory grant-in-aid was allocated to: “free
services”, i.e. without charge to the recipient; “partially charged services”, primarily support