The new chief executive of the Learning and Skills Council (LSC), Geoff Russell, has admitted that more Further Education College schemes are stalled and waiting for government cash. In a letter to college principals he says construction projects must look for cost savings.
The letter says that college construction projects must be assigned a priority before cash could be awarded, but that those projects that were ‘shovel-ready’ would get first priority.
However: “Many more colleges have put forward a case for their projects to be considered as “shovel ready” than expected and that some approvals would be delayed.
He said accountants PriceWaterhouseCoopers would be examining the projects and making the final assessment.
“To ensure the largest number of colleges can still benefit from these funds, more colleges will be chosen for that stage than can be funded according to the size of their original bids. The challenge for colleges will therefore be to radically reduce the cost and the scope and sourcing of the funding of their projects.
“Revisions to the scope of projects could include rethinking or deferring whole projects, or components of projects, in favour of a contribution to costs incurred to date and/or funds for refurbishment. We will only consider funding complete re-builds where they are absolutely necessary, which should be in only a few cases.
“Many colleges might want to come back to us with more modest proposals in order to maximise their and other colleges’ chances of being funded. The more colleges can reduce scope and costs, the more of them will be able to secure funding. If they come back with more or less the same bids, we will be able to fund far fewer projects than we would have hoped,” he said.
However, he did pledge that: “LSC will ensure that no college is unable to meet its financial obligations as a result of decisions on these capital projects. We will address this issue very quickly after the final decisions are made on which projects will go forward this year.”
Chairman of the CBI Construction Council, John McDonough, was upbeat, however: “The FE College build programme has become a victim of its own success in recent years as more and more colleges have been coming up with ambitious schemes that cannot be accommodated within the LSC’s budget.
“The additional funds allocated to the LSC in the Budget are therefore very welcome. Given that many of these FE projects are ‘shovel-ready’, this will give construction firms a much needed boost and protect jobs during the recession.
“The CBI’s Construction Council has been calling on the government to adopt smarter ways of procuring projects in order to get the best results for the taxpayer. We therefore welcome the LSC’s focus on value for money. It also makes sense to spread the benefits more widely by going for a larger number of smaller projects rather than a small number of big new colleges.
“But achieving value for money does not mean simply going for the lowest cost option. We must not allow this to become ‘a race to the bottom’ where costs are squeezed to the detriment of quality.”