Colleges caught short by building freeze

The Government said it would not allow any college to collapse because of a freeze on capital spending after mismanagement at the agency that administers public funding for further education in England.

Further Education Minister Sitn Simon said the Learning and Skills Council (LSC) had approved in principle nearly £3bn of building works at 79 colleges that could not be afforded in the current Government spending round.

"This programme has not been managed properly, we shouldn't be in this state," he told BBC radio.

He said a report into the situation by former Audit Commission head Andrew Foster would be published shortly.

Several colleges have already spent money demolishing buildings and commissioning new facilities on the basis of the LSC's in-principle funding approval, and say they face crippling losses if the money fails to arrive.

Simon said colleges should not suffer because of the funding problems. "We absolutely are not willing to see colleges go bust," he added.

"If there are any colleges in financial difficulty they should go to the LSC who we will expect to work with them to make sure they are supported through any difficulties that they are in now."

One example is Barnsley College in South Yorkshire which has invested £12m of its own money in an extensive redevelopment and says it faces insolvency.

"It leaves us with a building site," college principal Colin Booth told the BBC. "It leaves us with 7,000 students in a mixture of accommodation, including a substantial amount of rented accommodation, and it potentially leaves the college technically insolvent."

Martin Doel, chief executive of the Association of Colleges (AoC), called for a quick resolution to the issue.

"These colleges also play a central role in helping the country during times of economic difficulty and these very serious delays threaten to destabilise their efforts," he said.