Magazine article Public Finance

College Building Scheme Faces Fresh Setbacks

Magazine article Public Finance

College Building Scheme Faces Fresh Setbacks

Article excerpt

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 LSCs 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 happy5 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. …

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