Colleges need extra pounds 200m per year to stave off crisis

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Education colleges need pounds 200m extra a year merely to stave off financial crisis, MPs were told yesterday.

The figure, revealed by college funding leaders to the House of Commons Education and Employment Committee, takes no account of extra money needed to help reach the Tony Blair's target of half a million more students in further and higher education by 2002.

On the first day of its six-month inquiry into the role, funding and governance of further education, the committee heard that increasing numbers of colleges were in severe financial trouble.

Where 25 colleges, representing 6 per cent of the sector, were in a financially weak position in 1994, 119 colleges fall into that category now. Professor David Mellville, chief executive of the Further Education Funding Council, agreed with committee member and Liberal Democrat education spokesman, Don Foster, that the situation was "incredibly worrying".

The Prime Minister pledged at Labour's Brighton Conference last month to increase student numbers by 500,000 within this Parliament. This would cost at least pounds 1bn.