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Building funds get a #163;100m boost

There is, however, a catch .

There is, however, a catch .

When the Government came to power, the #163;5.7 billion capital-funding regime for colleges was "in turmoil", it insisted - a choice of words that could have been characterised as political hyperbole.

But in this case it was no exaggeration. Almost no one could have denied that the scenario was dismal for colleges in early 2009, when 144 building projects were halted due to the former Learning and Skills Council's massive funding shortfall. Many FE institutions had already started ambitious projects, fully expecting that the billions of pounds needed to complete them would be forthcoming - only to see the cash disappear before their eyes. Just 13 of the projects were completed.

The Coalition's efforts to resolve the situation have been limited, perhaps inevitably given the financial predicament it faces. A #163;50 million capital renewal grant was made available, and a further #163;25 million has since been provided for the most urgently needed schemes.

But at last, it seems, a more substantial sum of money is on the way for colleges in dire need of new or refurbished facilities. The new capital programme will make #163;100 million available to colleges over the next two years. "Stability has now been restored," trumpets the Department for Business, Innovation and Skills. And while the money only goes a minuscule way towards filling the capital-funding chasm that has opened up, there is relief in the sector that this is, at least, a step in the right direction.

Starting this month, colleges can apply for up to #163;2 million. But there is a catch: for every #163;1 from the pot, they must stump up #163;2 themselves. Association of Colleges assistant chief executive Julian Gravatt can see the benefits. "There is a need for funding there," he said. "The Government gets to put in a relatively small amount, and gets more investment in facilities. If colleges want to properly educate students, they need to keep things up to date."

With Government funding having dried up as the economy deteriorated, many colleges have looked to other ways of generating money to cover their capital costs, primarily selling off land, taking out loans or, for the lucky ones with a healthy bank balance, dipping into their surplus.

Cambridge Regional College paid for a large chunk of its #163;23 million campus redevelopment by selling off its former city centre site for housing. Bucking national trends, the college has seen its student numbers rise in the subject areas with purpose-built new facilities. Vice-principal Chris Lang welcomed the latest influx of funding. "New buildings are a key part of attracting and keeping students," he said. The college hopes to receive a sizeable contribution from the new fund towards a planned #163;2 million construction centre.

With ever tougher competition for prospective students from sixth-form colleges and schools' own sixth-forms, a hi-tech new computer lab or sports hall could give an FE institution extra pulling power. And with colleges being funded for every learner they sign up, capital projects could even, in time, pay for themselves.

But with plenty of fundraising to do themselves to access the new stash of cash, colleges have a way to go before they reach the pot of gold at the end of the rainbow.

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