£400k surplus at LCAD

Take a moment to read the following extract from the information sent to prospective applicants for the recent principles job.

'Revenue Funding

The College has three main sources of funding. In 2008/9 we forecast that the LSC will provide £3.9M, HEFCE £4.3M and fees £3.6M. Most (£3.3M) of the latter is from HE students paying the maximum permissible top-up fee of £3,000 plus inflation. The total income is forecast to be £12.5M. The College holds the LSC category A for funding health and has not had an operating deficit since incorporation in 1993. The College is forecasting an operating surplus of £400K for 2008/9, having achieved a similar figure in 2007/8.'

Since when have educational institutions been in the business of generating a year on year surplus?
Also, given the £400k operating surplus last year, which looks like being repeated this year, surely we have enough money in the coffers to adequately remunerate our fantastic staff and also implement the 2004 harmonised pay spine.