Fe Colleges Disaster!

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Further Education Colleges in England have indicated they face bankruptcy and disaster aftter their refurbishment programme has been halted.

The colleges have lost up to £200m because of delays in getting the funding that was promised.

Some 144 building projects which have already been started, leaving some colleges half demolished, have been put on hold while funding is being reviewed by the Learning and Skills Council (LSC).

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 to pay contractors are relatively small but fifteen are for between £2m and £5m, and ten are more than £5m.

The total could top £200m.

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.

Lecturers union UCU head of further education, Barry Lovejoy, said: ‘Colleges’ ability to deliver education and training will be vital to any efforts to lift the country out of recession.

‘Quite clearly, we need buildings that are fit for purpose and many of our dilapidated colleges are in need of urgent work.

‘Where that work has been agreed it must be completed and we are seeking an urgent meeting with LSC to find out exactly what is going on.

‘We cannot have a situation where uncertainty about any aspect of a college’s future threatens or its financial difficulties spill over into other areas of its activities or ability to delivery its core functions.’

One college that has warned it could go broke is Barnsley College, in South Yorkshire, which is half demolished with rebuilding work due to begin in May.

College principal, Colin Booth said the situation could end up making the college technically insolvent because it had taken out a bank loan on the basis that there would be a £60m building as an asset, so if the building is not there, its liabilities would exceed its assets.

Other FE colleges are in a similar position, facing insolvency with students packed into temporary accommodation.

Martin Doel, Association of Colleges Chief Executive, said: ‘Colleges must have quick, clear and consistently fair decisions on these projects.’

He added: ‘These very serious delays threaten to destabilise their efforts.

‘We would encourage government to identify where additional funds might be secured to sustain this excellent programme.’

Further Education Minister Sion Simon admitted yesterday: ‘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.’