David Willetts

Commenting John Denham’s statement that 144 colleges have had their capital projects frozen, David Willetts said:

“The scale of the shambles in Further Education capital projects is revealed in this statement. Eight new capital schemes get the go ahead. But 144 don’t.

“Gordon Brown claims to be bringing forward capital spending, giving priority to training in the recession and to boosting apprenticeships, but this statement shows they cannot deliver.”

ENDS

Notes to Editors

· Ministers claim that as part of Gordon Brown’s fiscal stimulus, some of the college building budget was brought forward from 2008-09. But the Government has now frozen the programme.

· Nineteen colleges were to receive approval in December, but the Government decided to delay all decision for three months.

· Today, the Government announced that while eight of the programmes would be approved, they would not be funding the 144 colleges in the earlier stages of the approval process. Many of these colleges have already started their building programmes, with the encouragement of the Government. The freeze will result in higher costs for institutions, in some cases running into millions of pounds.

Who is affected by the freeze

1. 79 colleges waiting for approval in detail (the final stage of the approval process). To be considered for approval in detail, colleges must have already secured planning permission and put together a full project brief. These colleges will have incurred considerable costs to reach this stage (http://designguidance.lsc.gov.uk/process/capitalapplication/detailed-application/)

2. 65 colleges waiting for approval in principle. These colleges will already have assemble a project team and have put money towards preparing the bid (http://designguidance.lsc.gov.uk/process/capitalapplication/in-principal-application/)

Information obtained by the Conservative Party under the Freedom of Information Act reveals that this includes the following colleges:

• Tresham Institute
• Telford College of Arts and Technology
• Oxford and Cherwell Valley College
• Sutton Coldfield College
• Somerset College of Art and Technology
• Thanet College
• Itchen College
• Isle of Wight College
• Bradford College
• Sandwell College
• Peterborough Regional College

(LSC response to Conservative Party FoI request, 23 February 2009)

Itchen College (SO19 7TB) is in John Demham’s constituency.

3. 42 colleges who have yet to make bids but may have been planning to do so.

FE freeze

• Capital projects put on ice. On 17 December 2008, the Learning and Skills Council (LSC) decided to freeze the approval process for all FE college building projects for at least three months. The LSC decision was made suddenly with no public statement (Letter from the Chief Executive of the AoC to the Chief Executive of the LSC, 8 January 2009 and AoC, Briefing, 8 January 2009). The LSC has a £694 million capital budget for 2008/09 (year ending 31 March 2009). The budget was due to rise to £819 million in 2009/10 but, following the Cabinet decision to bring forward public sector capital expenditure, some of this money was to be spent in 2008/09 (LSC, Statement of Priorities 2009-10, November 2008). The three month freeze means that many capital grant payments will be delayed until the next financial year.
• The Government denied that the programme has been frozen. The Chief Executive of the LSC said: ‘There is no freeze on the programme. Currently, 253 projects are being funded and, in fact, £110m has been brought forward from future budgets to accelerate spending’ (Guardian, 20 January 2008). John Denham has also repeatedly denied that the freeze. Responding to questions in the Commons, the Secretary of State insisted that ‘there is no freeze in that spending programme’ (Hansard, 29 Jan 2009 : Column 441). ). But this applied only to colleges that have already received final approval. Many colleges, with the support of the LSC, had already started their building works, expecting the final funding bids to be rubber stamped at the December meeting and beyond.
• Nineteen colleges were immediately affected. Twenty colleges were to have their project applications examined at the December meeting, and all but one was told that decisions would be frozen at least until March (LSC, Minutes of National Council Meeting, 17 December 2009, released to the Conservative Party under the Freedom of Information Act). The Government have refused to give a straight answer to written questions, letters and questions in the Commons about which colleges will be affected (Hansard, 5 Feb 2009 : Column 1443W; Conservative Party Press Release, January 27, 2009; Hansard, 29 Jan 2009 : Column 440 and Hansard, 3 Feb 2009 : Column 720). Information obtained by the Conservative Party under the Freedom of Information Act revealed that the following 19 colleges had decisions about their capital projects suspended:

(LSC response to Conservative Party FoI request, 23 February 2009)

• Now, the Government has frozen 144 college building projects. In a Written Statement today, John Denham announced that 8 of the colleges from the December meeting have been given the go-ahead, but that there was not enough money for the 144 others who were awaiting approval (DIUS, Press Release, 4 March 2009).

Minutes of meeting reveal shocking new information

• The LSC had known about the funding crisis since at least November. Concerns over the affordability of the capital programme were expressed at the November meeting. The December meeting minutes contain the following correction: ‘Council asked that a correction to the report be formally recorded. The report stated that “At its meeting on 5 November 2008 the Council did not have time to consider and determine the project proposals (both in principle and detailed) recommended at the 22 October Capital Committee meeting”. It was noted and acknowledged that the main underlying reason had been concern over affordability’ (LSC, Minutes of National Council Meeting, 17 December 2009, released to the Conservative Party under the Freedom of Information Act). Sources say the LSC had ‘known for months’ but that DIUS had vetoed any advanced notice of the freeze (Guardian, 20 January 2009).
• The LSC is anticipating legal challenges over the effects of the freeze. The minutes state: ‘Members asked that a clear action plan be in place to respond to any legal challenges arising from its decision to carryover project approvals from its December 2008 meeting until March 2009.’ (LSC, Minutes of National Council Meeting, 17 December 2009, released to the Conservative Party under the Freedom of Information Act).

Importance of colleges

• Colleges are good for the economy. A recent study revealed that the contribution of past and present learners who have studied at the colleges over the past 15 years was approximately £28 billion in added income to the national economy in 2006/07 alone. The study also shows that for every pound invested by government in colleges, the taxpayer sees a return on investment of £1.70 (EMSI, The Economic Contribution of Further Education Colleges, 2008).
• Colleges are a key source of skills and training. Colleges in England educate and train over 3 million young and adult learners each year. This includes about three-quarters of a million 16 to 18 year-olds every year - more than all school sixth forms, private schools and private training providers put together (LSC, Individual Learner Numbers and Statistical First Release, 2008).
• Businesses value colleges. Two-thirds of large employers that train their staff do so through a college. Eighty-four per cent of employers that train their staff through a college are happy with the service provided (LSC, National Employer Skills Survey, 2008).

Labour’s broken promises

• The Government has promised to bring forward capital spending. In January, Gordon Brown said that ‘an economic slowdown must not be an excuse to slow down the pace of investment and reform to strengthen our country for the future. … [W]e have…taken action involving some tough decisions that will also benefit every region and nation of the UK to bring forward our capital spending programmes’ (10 Downing Street, Press Release, 5 January 2009). In the Pre-Budget Report, Alistair Darling said: ‘Bringing forward capital spending, on major projects, supports jobs and businesses. It is right that, at this time, we re-prioritise investment, from within the existing three-year limits, so that more money is being spent now, when the economy is weaker. I can announce today that £3bn of capital spending will be brought forward from 2010/11 to this year and next’ (Hansard, 24 Nov 2008 : Column 493).
• Gordon Brown has frequently talked about the importance of skills. As Chancellor, he said: ‘Skills are Britain’s Achilles heel - 8 million people have below Level 2 qualifications, including 20 per cent of 18 to 24 year olds. And skills are critical to an individual’s chance of success - to push a teenager into the world of work today without any qualification is to put them at lifetime risk of poverty, failure and wasted potential. A skilled workforce is also essential for the wider health of our economy. As global competition challenges every industry and almost every service, a flexible labour market is an even more necessary means of achieving full employment and higher productivity’ (HM Treasury, Press release, 25 Feb 2003). After becoming Prime Minister, Gordon Brown continued to talk about Britain’s skills crisis: ‘The world has changed. The problem now is lack of skills. What’s preventing people getting work in the future, is that they are not employable because they don’t have the skills…So we have got to get those people who are at the moment unemployed or inactive and young people who are at school, they have now got to have the skills…’ (Politics Show, 25 January 2008). Recently, the Prime Minister stated that ‘in an open global environment where there is competition for jobs, it is our duty to help British workers to get the skills that are necessary for the jobs’ (Hansard, 4 Feb 2009 : Column 837).
• The Government acknowledges the importance of FE capital spending. Ministers have spoken of the links between FE capital spending, attainment, skills and regeneration: ‘State-of-the-art buildings make a huge difference to educational attainment. Our goal is to make England’s further education (FE) estate a world leader - a system in which learning is delivered in inspirational, innovative and sustainable environments equipped with industry-standard facilities. The Government has already demonstrated its commitment to this goal through unprecedented capital investment, and a record further £2.3 billion will be invested over the next three years. This will benefit generations of learners to come, meet the skills needs of employers and act as a catalyst for community regeneration’ (John Denham, Forward to Building Colleges for the Future, March 2008).