The Public Accounts Committee of MPs has slammed the Learning and Skills Council (LSC) for its ‘reckless’ approval of college improvements that was some £2.7bn over-budget.
MPs also criticised the Department for Innovation, Universities and Skills for failing to manage the LSC, and has suggested that the programme could now be lumped into the Building Schools for the Future programme.
The LSC was established in 2001, to take over the programme of capital works for colleges of further education, much of which was dilapidated.
But the programme span wildly out of control, approving £4.2bn of improvements for 79 colleges - £2.7bn more than the LSC could afford.
Chairman of the Committee of Public Accounts, Edward Leigh said: “The Learning and Skills Council has been guilty of a very serious failure in its management of the programme to refurbish and rebuild further education college buildings around the country. The Council behaved recklessly by approving too many projects and allowing colleges’ expectations of financial support to outstrip what it could afford by nearly £2.7 billion.
“The programme had looked promising in its earlier stages. It had stimulated capital investment in the further education estate, much of which was in poor condition, and completed schemes generally provided good value for money.
“However, by early 2008, the Council was no longer controlling the flow of projects which were becoming unaffordable. The Department’s oversight of the Council was remiss for it failed to recognize that this was going on.
“The future of the programme is now beset with considerable uncertainty which must be dispelled 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.
“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.”
A further £300M in additional funding has been found, to push through 13 projects, but the remaining are still in limbo. “There may be scope to repackage some projects in future, for example by bundling them together with other colleges or with schools being redeveloped as part of the Building Schools for the Future programme,” reads the report.