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Colleges face £100m projects loss Colleges face £100m projects loss
(about 1 hour later)
Colleges in England have indicated they face losing more than £100m because of delays in getting funding they say was promised for refurbishment.Colleges in England have indicated they face losing more than £100m because of delays in getting funding they say was promised for refurbishment.
Some 144 building projects are on hold while funding is being reviewed by the Learning and Skills Council (LSC).Some 144 building projects are on hold while funding is being reviewed by the Learning and Skills Council (LSC).
Further Education Minister Sion Simon said the government would not see further education colleges go bust.Further Education Minister Sion Simon said the government would not see further education colleges go bust.
But he said they should turn for help to the LSC - the organisation they say has caused the problem.But he said they should turn for help to the LSC - the organisation they say has caused the problem.
Responses to an Association of Colleges survey show at least £100m would have to be written off if colleges' capital projects did not get the LSC backing they were expecting.Responses to an Association of Colleges survey show at least £100m would have to be written off if colleges' capital projects did not get the LSC backing they were expecting.
Some of the sums to which the colleges are committed are relatively small but 15 are between £2m and £5m, and 10 are more than £5m. The total could top £200m.Some of the sums to which the colleges are committed are relatively small but 15 are between £2m and £5m, and 10 are more than £5m. The total could top £200m.
'Extraordinary incompetence''Extraordinary incompetence'
Asked what extra costs they would incur if their projects were delayed or staged over five years, the answers again covered a wide range but added up to £151m at the very least.Asked what extra costs they would incur if their projects were delayed or staged over five years, the answers again covered a wide range but added up to £151m at the very least.
FROM THE TODAY PROGRAMME More from Today programme Shadow further and higher education secretary David Willetts told the BBC the situation represented "quite an extraordinary catalogue of incompetence" on behalf of the government.
Mr Willetts said colleges had been "actively encouraged" by ministers to go ahead with works and "now they are all at a standstill because of this extreme mismanagement".
He said according to minutes from meetings, the Learning and Skills Council was worried that it could face legal challenges because they it given assurances to colleges over the funding.
Mr Willetts said: "We think ministers need to come clean on the scale of this problem. At every stage we've had to extract information from them using Freedom of Information requests.
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
"Despite what ministers say, these colleges are not going to be able to improve their facilities at a time when they desperately need them." Mr Simon conceded to the BBC that the LSC had given approval to funding that, it was now clear, could not be met.
Mr Simon told the BBC he conceded the LSC had given approval to funding that it was now clear could not be met.
As a result the government has asked trouble-shooter Sir Andrew Foster, a former chief executive of the Audit Commission, to investigate the situation.As a result the government has asked trouble-shooter Sir Andrew Foster, a former chief executive of the Audit Commission, to investigate the situation.
He said: "I really do understand and I sympathise with the frustrations of colleges in this kind of position."He said: "I really do understand and I sympathise with the frustrations of colleges in this kind of position."
He added: "It is right to say that the LSC has given in principle approval to 79 colleges which would total nearly £3bn of government money and it is clear that that level of expenditure cannot be funded in the current spending round.He added: "It is right to say that the LSC has given in principle approval to 79 colleges which would total nearly £3bn of government money and it is clear that that level of expenditure cannot be funded in the current spending round.
"We are quite clear as ministers that that's not acceptable. We shouldn't be in that position. This programme has not been managed properly.""We are quite clear as ministers that that's not acceptable. We shouldn't be in that position. This programme has not been managed properly."
Barnsley principal Colin Booth is contemplating financial disasterBarnsley principal Colin Booth is contemplating financial disaster
He said any colleges who were concerned they were in a precarious financial position as a result of the shortfall should not hesitate in contacting their local LSC office.He said any colleges who were concerned they were in a precarious financial position as a result of the shortfall should not hesitate in contacting their local LSC office.
"We will expect the LSC to deal urgently with their situations. We are absolutely not willing to see colleges go bust," he added."We will expect the LSC to deal urgently with their situations. We are absolutely not willing to see colleges go bust," he added.
The shadow innovation, universities and skills secretary, David Willetts said: "Sion Simon's comments show that the government clearly hasn't got a grip on the situation.
"We have minutes [of meetings] to prove that departmental officials attended meetings where the funding crisis was discussed, and that there were serious concerns about the programme as far back as October.
"Now 144 colleges have had their building projects frozen, millions of pounds have been lost, and some institutions are facing bankruptcy.
"Yet the minister offered no reassurance that the government would ensure the colleges' survival, and just passed the buck to the Learning and Skills Council. This is not acceptable."
BankruptcyBankruptcy
One of those that says it might is Barnsley College, in South Yorkshire, which is half demolished with rebuilding work due to begin in May. One of those that says it might go bust is Barnsley College, in South Yorkshire, which is half demolished with rebuilding work due to begin in May.
Its principal, Colin Booth, said it looked as though the contractors would have to make people redundant.Its principal, Colin Booth, said it looked as though the contractors would have to make people redundant.
He said the situation "could end up bankrupting the college" because he had taken out bank loans on the basis that the work would be done and students - with associated funding - would be taking up places in the new buildings.He said the situation "could end up bankrupting the college" because he had taken out bank loans on the basis that the work would be done and students - with associated funding - would be taking up places in the new buildings.
Without the buildings, he has no student income and no way of repaying the loans.Without the buildings, he has no student income and no way of repaying the loans.
Others are in a similar position, facing insolvency with students packed into temporary accommodation.Others are in a similar position, facing insolvency with students packed into temporary accommodation.
The Learning and Skills Council, which has approved eight projects, has said that "it has always been perfectly clear that full funding and final approval was not guaranteed and that colleges were proceeding at their own risk".The Learning and Skills Council, which has approved eight projects, has said that "it has always been perfectly clear that full funding and final approval was not guaranteed and that colleges were proceeding at their own risk".
It is trying to work out how to prioritise all future projects, and to understand what has already been spent by the colleges involved.It is trying to work out how to prioritise all future projects, and to understand what has already been spent by the colleges involved.