By Alex Klaushofer
30 July 2009
The effects of the Learning and Skills Council’s college building mismanagement could be worsened by the recession, the Commons Public Accounts Committee has warned.
In a report on the fiasco, published on July 28, the PAC said colleges were taking on more debt than they would be able to service. At the end of 2007/08, 23 colleges had debts exceeding their annual income by 40%.
Serious failings in the LSC’s management of the building programme were identified in April 2008. By then it had given the go-ahead for 79 projects requiring almost £32.7bn more than it had to distribute.
As a result, some projects are now in limbo as colleges wait to hear if they have got final approval, and only 13 will go ahead this year.
The quango, which is to be replaced by the Skills Funding Agency and the Young People’s Learning Agency in 2010, was condemned by the innovation, universities, science and skills select committee earlier this month for being ‘de-mob happy’ in the run-up to its closure.
Colleges’ ability to get loans or sell assets to finance their building projects could be further affected by the recession, the PAC report found. ‘Risks associated with the planned transition from the Learning and Skills Council to its successor bodies will require very careful management,’ it said.
‘With the dissolution of the council expected by 2010, the department will need to be confident that the management of the programme is not put at further risk, that uncertainty and funding issues are resolved as far as possible, and that overall the administration burden on colleges is not increased.’
PAC chair Edward Leigh said that the future of the programme needed to be clarified as soon as possible. ‘Some colleges are heavily committed to projects on which they have incurred costs. Some straight-talking is needed from the council so that colleges in this position are aware of the difficult decisions they will have to take,’ he said.
‘There remains a risk that some colleges are taking on more debt than they can reasonably service. The council must keep under close review the financial health of the further education sector, especially in the current economic downturn.’
The report follows the publication of an independent inquiry into the funding fiasco led by Sir Andrew Foster, who said he was ‘incredulous’ at the mistakes he had discovered during his investigation.
30 July 2009
The effects of the Learning and Skills Council’s college building mismanagement could be worsened by the recession, the Commons Public Accounts Committee has warned.
In a report on the fiasco, published on July 28, the PAC said colleges were taking on more debt than they would be able to service. At the end of 2007/08, 23 colleges had debts exceeding their annual income by 40%.
Serious failings in the LSC’s management of the building programme were identified in April 2008. By then it had given the go-ahead for 79 projects requiring almost £32.7bn more than it had to distribute.
As a result, some projects are now in limbo as colleges wait to hear if they have got final approval, and only 13 will go ahead this year.
The quango, which is to be replaced by the Skills Funding Agency and the Young People’s Learning Agency in 2010, was condemned by the innovation, universities, science and skills select committee earlier this month for being ‘de-mob happy’ in the run-up to its closure.
Colleges’ ability to get loans or sell assets to finance their building projects could be further affected by the recession, the PAC report found. ‘Risks associated with the planned transition from the Learning and Skills Council to its successor bodies will require very careful management,’ it said.
‘With the dissolution of the council expected by 2010, the department will need to be confident that the management of the programme is not put at further risk, that uncertainty and funding issues are resolved as far as possible, and that overall the administration burden on colleges is not increased.’
PAC chair Edward Leigh said that the future of the programme needed to be clarified as soon as possible. ‘Some colleges are heavily committed to projects on which they have incurred costs. Some straight-talking is needed from the council so that colleges in this position are aware of the difficult decisions they will have to take,’ he said.
‘There remains a risk that some colleges are taking on more debt than they can reasonably service. The council must keep under close review the financial health of the further education sector, especially in the current economic downturn.’
The report follows the publication of an independent inquiry into the funding fiasco led by Sir Andrew Foster, who said he was ‘incredulous’ at the mistakes he had discovered during his investigation.
