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Concern as building plans are stalled

Colleges call for share in pound;10bn recession pot as funding decisions hit by three-month delay

Colleges are calling for a share of the pound;10 billion set aside to keep the construction industry afloat amid fears that the Building Colleges for the Future money is not enough.

With the Learning and Skills Council having stopped decisions on funding new buildings until March to cope with the demand, principals fear that future capital will be more tightly rationed.

They want part of the public spending that Prime Minister Gordon Brown has pledged to bring forward for schools, hospitals and technology to ensure that the rebuild and refurbishment of all colleges can be completed.

Demand for funds reached pound;2.9 billion in a year, with pound;2.3 billion available until 2010. Colleges would be expected to raise an equivalent sum through borrowing and land sales, but both of those have been made more difficult by the recession.

Between 40 and 60 colleges are expected to be affected by the LSC's three- month delay on funding decisions, with 22 having been made to wait last month.

The delays have hit the vaunted pound;110 million that was intended to be fast- tracked from next year's FE capital budget to colleges in order to stimulate the economy and the construction industry. A decision on what to do with this cash will be made in March, the LSC said.

Ioan Morgan, principal of Warwickshire College, where a pound;35 million project to rebuild the campus in Rugby is due to begin next month, said the funding colleges had received so far had been vital for building the kind of modern facilities that businesses expected for training.

He said: "The major capital investment up to now has gone into professionalising the facilities we provide to match the commercial world that we are training for.

"We haven't lost hope that the LSC rethink won't be good news. What would be a shame is if the college sector lost out to the schools sector in the spending being brought forward."

Colleges want the LSC to take advice from principals on how to prioritise bids, for the Government to put its anti-recession package towards college buildings and help with negotiating better borrowing rates with banks.

Martin Doel, chief executive of the Association of Colleges, said: "We can see colleges have got good plans for the future. They are already realising the benefits of new estates. This is a valuable programme we want to see continue.

"Number 10 is looking for projects that can stimulate the construction industry. This is a good candidate for further additional funding: it's been delivering on time and on budget," he added.

Colleges deny that their claims for funding are too large, arguing that they have to pass several layers of scrutiny. But the size of bids has risen dramatically.

The first 21 projects completed under Building Colleges for the Future typically received about pound;16 million, while the average funding claim now stands at pound;40 million per college. Mark Haysom, chief executive of the LSC, has stressed the size of the funding already committed and said only 42 colleges have not had recent investment in their buildings. "However, the pace of demand for funding has increased," he said. "This is because the scale of ambition and the government funding they require has grown."

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