Colleges' borrowing has not left them in financial difficulty

25th July 2008 at 01:00

I am pleased that the recent National Audit Office (NAO) report, Renewing the Physical Infrastructure of English Further Education Colleges, recognises the huge progress we have made in rebuilding and revitalising the FE estate (FE Focus, July 11). I was therefore surprised by Steve Hook's negative view of the impact this is making.

To quote the report, at incorporation "much of the physical infrastructure was in poor condition, and many buildings required urgent health and safety-related repairs, were unattractive to potential learners, unsuitable for modern learning, inaccessible to people with disabilities and inefficient to run".

Since then, record levels of investment have supported FE colleges in shaping their futures. Colleges are investing in the high-quality facilities needed to deliver courses, attract learners and meet employers' skills needs. Between April 2001 and March 2008, the Learning and Skills Council (LSC) approved colleges' projects at the final application stage with a cost of amp;#163;4.2 billion and grant support of amp;#163;1.7bn.

To ensure all communities have world-class facilities, the Government has committed amp;#163;2.3bn for the next three years. This is expected to support more than 120 projects; in turn, three-quarters of a million learners will benefit from new facilities.

As independent, self-governing bodies, it is only right that FE colleges contribute towards the cost of their capital projects. To date, the NAO has not found any college reporting financial difficulties, and the LSC's affordability criteria ensure that levels of borrowing remain affordable. For the sector as a whole, interest payable is only at about 1 per cent of college income. We will, of course, keep such policies under review to make sure colleges continue to be supported.

Bill Rammell, Minister for further and higher education.

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