By Neil Merrick
25 September 2009
Borrowing rules for further education colleges should be relaxed so that work can resume on new buildings, the government was told this week.
The call came from the College Capital Task Group, comprised of 21 colleges whose capital schemes were shelved following the collapse of the Building Colleges for the Future programme.
The group also urged the Treasury to support extra borrowing by colleges as an alternative to grants.
In June, 13 college schemes were approved after the Learning and Skills Council was allocated an extra £300m in the Budget. But the vast majority of the 79 projects that had been approved are still awaiting funds.
A report by the task group, published on September 22, urged the government to
allow colleges to borrow commercially without being tied to LSC rules, which restricts borrowing to 40% of turnover.
Mark Dawe, head of the task group and principal of Oaklands College, St Albans, said any extra borrowing would need to be supported by the Treasury. While the average capital scheme costs £45m, colleges alone could afford to borrow only an average of £7m.
Dawe said the FE sector would be naïve to believe money was ‘flowing its way’ in the present economic climate. ‘The supported borrowing route allows things to get going again on a reasonable scale,’ he said.
25 September 2009
Borrowing rules for further education colleges should be relaxed so that work can resume on new buildings, the government was told this week.
The call came from the College Capital Task Group, comprised of 21 colleges whose capital schemes were shelved following the collapse of the Building Colleges for the Future programme.
The group also urged the Treasury to support extra borrowing by colleges as an alternative to grants.
In June, 13 college schemes were approved after the Learning and Skills Council was allocated an extra £300m in the Budget. But the vast majority of the 79 projects that had been approved are still awaiting funds.
A report by the task group, published on September 22, urged the government to
allow colleges to borrow commercially without being tied to LSC rules, which restricts borrowing to 40% of turnover.
Mark Dawe, head of the task group and principal of Oaklands College, St Albans, said any extra borrowing would need to be supported by the Treasury. While the average capital scheme costs £45m, colleges alone could afford to borrow only an average of £7m.
Dawe said the FE sector would be naïve to believe money was ‘flowing its way’ in the present economic climate. ‘The supported borrowing route allows things to get going again on a reasonable scale,’ he said.
