A highly-rated college claims it has become the latest victim of unfair funding as it struggles to escape its Edwardian surroundings.

Burnley college in Lancashire wants pound;40 million to move to a new site, after inspectors said its building was inadequate. Critics of government FE funding policy accuse it of favouring schools embarking on similar projects.

A spokesman for the Association of Colleges said: “This highlights yet another anomaly between college and school funding. Schools get 100-per-cent funding for capital projects whereas colleges have to raise a significant part of it on the open market. They have to persuade someone to give them a loan, then pay it back.”

As the college struggles for funding, the local education authority has agreed to pay in full the pound;13m cost of a new sixth-form centre in the town, a merger of two school sixth forms.

The AoC says pound;500m a year needs to be spent on college buildings over the next 12 years, nearly twice the figure set aside.

John Smith, Burnley’s principal, said: “This college opened in 1909. It is not fit for the 21st century. We plan to move to a whole new college in the next four years, but there is clearly an issue about capital funding.

Burnley is going to be an interesting test case of the Government’s commitment to the regeneration of accommodation in further education.”

He said the problem is exacerbated by the fact that the college is a listed building and, although it sits in six acres, it has been valued at just Pounds 750,000 because property prices in the town are low. “We don’t have an estate to sell,” he added. We need the cash to create the facilities that the people of Burnley both need and deserve.”

The Office for Standards in Education and Adult Learning Inspectorate rated teaching at Burnley as good or better in 70 per cent of lessons, satisfactory in 25 per cent and less than satisfactory in 5 per cent, well above average.

But they said the buildings were not good enough, though the college made good use of what it had. Rising student numbers were causing “cramped teaching conditions”.

“There are problems in visual and performing arts, and sport, leisure and tourism with noise and poor access,” inspectors said. “Construction workshops are poor, with insufficient space to meet awarding body requirements to teach and assess in separate areas.

“The college is aware of these limitations and is exploring options for relocation with the local learning and skills council.”

Mr Smith said the college had set itself the goal of 80 per cent of teaching being “good or better” in 18 months. He added: “Burnley a town that faces whole sets of social and economic challenges. It needs an outstanding college and that is what’s driving us.”

* joe.clancy@tes.co.uk