Fears over college training fund

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There are fears the body responsible for funding England's further education colleges could face its third cash crisis in a year, the BBC has learned.

Colleges fear the Learning and Skills Council (LSC) may not fund all of the apprenticeships it has encouraged for 16 to 24-year-olds, File on 4 was told.

It was an open ended commitment without an open budget, said one principal.

And the LSC's new chief executive Geoff Russell said he could not guarantee demand will not exceed supply.

Earlier this year the LSC put building projects at 144 colleges on hold when it ran out of money for capital schemes.

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No cash

File on 4 has heard from training organisations and colleges, who were encouraged to apply for funding for the government's Train to Gain scheme and adult apprenticeship schemes from the LSC, only to be told the cash had run out.

A LSC circular of 27 May 2009 to colleges and private training companies, has prompted concerns that it might not be able to fund all applications for a young apprentices scheme.

The circular stated that there is "currently" no restriction on 16 to 24-year-olds who want to start the apprenticeship scheme.

But colleges fear that if the scheme proves popular, the LSC will not have the cash to pay for it - as has happened with other schemes.

Funding fears

"What I worry about is that if the economy recovers, colleges could be in the same situation as with the Train to Gain and adult apprenticeships." said Graham Moore, principal of Stoke-on-Trent Further Education College.

"You haven't got an open-ended budget but you have an open-ended commitment," said Mr Moore, who speaks for The 157 Group, the body representing larger colleges of further education in England.

"We have had two experiences of open-ended commitments which were not open-ended commitments so colleges will be duly cautious," he added.

The LSC's last chief executive Mark Haysom resigned in March over the college building crisis.

Decision delayed

His successor Mr Russell told File on 4 that it had changed the way it managed its budget and believed that it could fund the young apprenticeships, adding, that for 16 to 24-year-olds, supply exceeds demand.

Although he admitted: "I can't guarantee that demand won't exceed supply."

Colleges with building projects on hold expected to hear earlier this month whether their projects would be funded.

The LSC was due to announce on 3 June 2009 which projects would get priority funding, after it had received an extra £300m for the government to help ease the crisis, but it sent a letter to college principals stating this will now happen "later in the month".