Edexcel, as a not-for-profit charity, has filed its annual accounts for the financial year January to December 2001 with Companies House, reporting a £7 million deficit and a drop in reserves to £16.5m.

John Kerr, who took over as Chief Executive in October 2001, explains: "These losses are partly due to the £12m investment that Edexcel has made in customer service and technology to improve processes, and partly to the unexpected costs arising out of the problems we experienced managing Curriculum 2000 in 2001. This resulted in a massive leap in numbers of marks that Edexcel managed in 2001 - from 4 million in 2000 to 8 million in just one year.

"We will continue to invest in new qualifications and developing technology solutions to enable our qualifications to meet students' and teachers' needs, and to ensure the exam system operates efficiently.

"I am confident that with careful cost management, the 2002 accounts will show that Edexcel has turned the corner and come out of deficit.

"Edexcel is firmly committed to enabling more learners to achieve success through their qualifications and we have invested significantly in developing new qualifications such as the new vocational GCSEs which started this September, and the new BTEC National programme which fits into the QCA National Qualification Framework."