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LSC chief was director of private property firm

Details of Mark Haysom's business interests emerge as Foster reports on college building chaos

Mark Haysom, who resigned as the Learning and Skills Council chief executive last week, was a director of a property management company while the pound;2.3 billion college capital programme ran out of control.

As Sir Andrew Foster unveiled his report into the mismanagement of the budget for new buildings, which left him "incredulous", FE Focus discovered that the chief executive had taken on extra responsibilities as the programme was growing.

In January 2006, Mr Haysom became a director of Limehouse East Management, which manages properties in the 179-home Basin Approach development in east London, where he lives. Just months before the Building Colleges for the Future programme ground to a halt in December last year, this waterside development was refurbished, complete with an art installation.

David Collins, the Association of Colleges' president, said: "It's a pity property expertise wasn't brought to bear on the rather wider issues."

There is no suggestion that the directorship prevented him from carrying out his duties as chief executive, and Sir Andrew Foster's report did not mention it as a factor.

But in A Review of the Capital Programme in Further Education, Sir Andrew lays prime responsibility for the failings with the council. "When I first came to this and started to understand it, I was incredulous at what I saw," he said.

The council ignored a warning in February last year of a projected overspend. It continued to approve more projects worth pound;2.6 billion.

Sir Andrew said colleges were encouraged to bid for ever-bigger projects by the LSC, which initially feared it could not spend all the budget because of the programme's slow start. When the council stoked up interest, it had no system for choosing from what Sir Andrew described as a "tsunami" of bids.

Meanwhile, risk management procedures ignored the capital programme until the end of last year.

Officials from the Department for Innovation, Universities and Skills should have challenged the LSC more rigorously, Sir Andrew said, but he concluded there was no evidence that ministers knew about the crisis until November.

"The biggest part of this is that the original design for how funding was being managed was structurally inadequate," he said.

"It is surprising to me that as many meetings could take place over the relevant period without there being more challenge as to what was happening."

Sir Andrew said colleges should have been more wary of the "champagne moment" of approval in principle, with 79 now in limbo waiting for detailed approval, although he accepted they had been given encouragement by the LSC.

John Denham, the Skills Secretary, said the LSC has now called in consultants to ensure it has proper information about schemes in the pipeline and appointed a director responsible for the programme. He has ordered a review of Dius's failure of scrutiny.

pound;2.6bn - The value in pounds of grants approved after the overspend warning.

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