UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1150-iv

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

EDUCATION AND SKILLS COMMITTEE

 

 

SUSTAINABLE SCHOOLS

 

 

Wednesday 25 October 2006

MR MARTIN LAMB, MR GRAHAM MOORE and MR JOHN WIDDOWSON

Evidence heard in Public Questions 339 - 459

 

 

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Oral Evidence

Taken before the Education and Skills Committee

on Wednesday 25 October 2006

Members present

Mr Barry Sheerman, in the Chair

Mr David Chaytor

Mr Douglas Carswell

Helen Jones

Fiona MacTaggart

Stephen Williams

Mr Rob Wilson

________________

 

Memoranda submitted by the Learning and Skills Council
and the Association of Colleges

 

Examination of Witnesses

 

Witnesses: Mr Martin Lamb, Area Director, Hampshire and Isle of Wight, Learning and Skills Council, Mr Graham Moore, Principal, Stoke-on-Trent College, and Mr John Widdowson, Principal, New College Durham, gave evidence.

Q339 Chairman: Could I welcome Martin Lamb, Graham Moore and John Widdowson to our proceedings. They have, quite rightly, corrected me. Outside, the screen says "Sustainable Schools" but of course it is obvious from this evidence session that it is "Sustainable Schools and Colleges". Welcome to this session. We very much wanted the inquiry to embrace schools and colleges because they necessarily should be joined up and some of the questions will relate to FE and the links with HE. Welcome indeed. We are looking forward to hearing of your different experiences in the different parts of the country to help us with our inquiry. As you know, we are trying to look at the sustainable school and the sustainable college in the widest sense, not just in terms of the design, the build, the servicing and management of the premises, but the transport to the college and indeed what goes on in the college in the 21^st century in terms of the learning environment. Martin, could I ask you to kick us off by introducing yourself. We have your CV, so would you say briefly where you are from and what you think the challenge is in terms of a sustainable college.

Mr Lamb: Thank you very much, Chairman. I am Martin Lamb. I am currently the Area Director for Hampshire and the Isle of Wight for the Learning and Skills Council and previously have worked in a similar role in Berkshire and prior to that in the National Office, so I have a relatively wide range of different LSC experiences.

Q340 Chairman: We are expecting great things from you, Martin, because every time I look at Hampshire these days there is some leading educational innovation. I hope that is also true of colleges. Is it?

Mr Lamb: It certainly is.

Q341 Chairman: We will come back to that, then. Graham?

Mr Moore: I am Graham Moore, Principal of Stoke on Trent College. I have been there for 10 years and before that at Stratford upon Avon College. I am the Treasurer of the 157 group, which is the large colleges group which works with the AOC to help improve the reputation of the sector, which we believe should be a lot higher than perhaps it is in some quarters.

Q342 Chairman: How do you get in the 157 group?

Mr Moore: Quality and size are the two key criteria. You have to have at least a grade 2 in terms of leadership and management, and normally colleges have a turnover of over £35 million if they are members.

Q343 Chairman: That is 157 out of how many?

Mr Moore: About 400.

Q344 Chairman: It is reasonably exclusive, then.

Mr Moore: It is about 25 colleges, but between us we have quite a large proportion of the total turnover.

Q345 Chairman: It is paragraph 157 of the Foster Report. We are with you!

Mr Moore: Which is all about reputation.

Q346 Chairman: It is even more exclusive.

Mr Moore: It is even more exclusive than that.

Q347 Chairman: Have you thought about going to branding people and getting a different brand?

Mr Moore: We were conscious that sixth form colleges had a group and tertiary colleges had a group. We tend to be big, urban, city colleges, and we think there is a whole cluster of issues that surrounds that. Also, we like to feel we can exert some influence in the regions and so on, because we are distributed right across the country. We can perhaps help to lead our colleagues in putting reputation and the development of FE forward.

Q348 Chairman: It is good to know about that. John Widdowson?

Mr Widdowson: I have been Principal and Chief Executive of New College in Durham for the last eight years. I am also Chair of the Mixed Economy Group of Colleges - it sounds a bit exclusive, all this - which are those colleges that offer a lot of higher education within the FE context, which we define as 500-plus full-time equivalent HE students within the college. There are some 25 members of that. I also chair the Further Education National Consortium, which is a group of 140-plus colleges, which looks at learning and resource-based learning across the sector and devises learning materials and tries to encourage people to use different methods and different approaches. The reason, I guess, I am here is that we have just completed a complete college rebuild, a complete campus rebuild, that finished about a year ago.

Q349 Chairman: Thank you. I will start with Graham. What are the greatest challenges when you are deciding what to do in terms of rebuilding or refurbishing a college these days? There has been quite a substantial investment in new build in the college sector which has been going on for some years now. What have been the challenges, in your experience?

Mr Moore: We have just had one building completed and I think I would like to start by saying the whole sector has welcomed the greater attention to capital expenditure in FE. It is good that it is not just schools having a big programme of building; there is a significant programme in the FE sector. We start from a good-news story, in the sense that there is quite a lot happening, and I would say there is a very positive relationship with the LSC, in terms of positively being encouraged to look at new projects and think about high quality buildings. That comes very much from the leadership of Mark Hayson and the LSC. That is a very positive side of the story. On the ground there are a number of issues we would like to see done better. In Stoke, we are a pathfinder for Building Schools for the Future. Because the colleges are very significant in the 11-16 issue in Stoke, because many of the schools are 11-16, it would be very nice if Building Schools for the Future had looked at schools and colleges and the context. With 14-19 being so linked between what schools do and colleges do, it is unfortunate that the capital programmes are not so obviously linked. Clearly our LSC is very keen that as the schools are redeveloped, so the colleges are redeveloped, and we have a university quarter - so there is another element there: the links with the university and the capital building programmes. If you really want to transform a city, one of the key issues is ensuring that the school sector, the college sector and the FE sector, and HEFCE, LSC and the local authorities, all work closely together. I guess there is room for progress in that. There is some progress but there is room for development.

Q350 Chairman: How well does it work in your patch?

Mr Moore: We work quite closely with our schools. The secondary heads and the two college principals, the sixth form college and ourselves, meet together regularly, once a month or so. We have good relationships. We have a lot of students from the local schools into the colleges, so that relationship works quite well. We are developing cluster ideas with the local schools. But, when we come to the building programme, we are trying to say, "Look, if you have a cluster of schools, what vocational specialisms are you going to put in each school? How is the Building Schools for the Future going to link to that? What facilities do you need post-16 in the colleges to match that?" Then, when we talk to the local authority, who are supportive, they say, "Well, Building Schools for the Future money is specifically Building Schools for the Future money. It cannot be used for colleges." If you look post-16, the money that the LSC has for building colleges can also be used for school sixth forms - so they can access two groups of money: the schools' money and the LSC money to top up the schools' money - but it does not work in the other direction. If we want 14-16 developments, is it better to do, for example, construction in schools or in the college environment with specialist resources? It may be quite advantageous to bring the young people for a day a week or something into the college, with the links with the employers and so on as well, to get that sort of vocational experience, but the funding for Schools for the Future would have to go into the schools. It could not go into the colleges in those sorts of circumstances. That is perhaps not a joined-up approach.

Q351 Chairman: It is not joined up enough.

Mr Moore: Not joined up enough. There are steps to join it up.

Q352 Chairman: In your area we have the new diplomas coming in. If everything goes on track, there will be 50,000 students taking the new diplomas this time next year - in fact, they will have started in September. What level of cooperation and discussion is going on between colleges and schools on that at this moment? Then I want you to compare that with how much discussion is going on in terms of building new schools and refurbishing schools and colleges.

Mr Moore: We have a collegiate in the city which is made up of the local authority, the schools, the LSC, the colleges, and that is quite a good basis for this sort of discussion. The person we employ to lead the collegiate has worked very hard. We have had a BTech consortium for several years in the city where the colleges provide the verification processes to ensure that the school standards in vocational areas are quite high. We hope that will make the schools ready for the new BTech diplomas - they will be used to working in that sort of structure - and that is working quite well.

Q353 Chairman: I have not heard them called BTech diplomas before.

Mr Moore: The BTech diplomas are what exist at the moment. The new diplomas, of course, are coming on.

Q354 Chairman: The name keeps changing.

Mr Moore: The name keeps changing. I do not think we are allowed to call them vocational diplomas any more but next week it might be something different.

Q355 Chairman: That is right.

Mr Moore: We knew that vocational education in schools was key to the agenda, so working with the schools and trying to help them deliver at the same sort of standard as the colleges seek to deliver education vocationally seemed an important issue for us. We agreed that with the secondary heads; we agreed that through the consortium. Of course we are now going through a gateway process, so we all say which of the lines, if you like, of the diplomas, which of the first five, we would offer. I think you will find that the colleges are ready to take those lines up completely and the schools will pick and choose a bit. We are trying to help the schools so that two adjacent schools do not pick the same diploma lines, so they can begin to get a specialist flavour about their activities.

Q356 Chairman: You will be well into the 14-16 area if you are doing those diplomas.

Mr Moore: Yes.

Q357 Chairman: But you are still not getting any cash that is up to 16.

Mr Moore: I think it is very odd that Schools for the Future is so tightly defined as "schools".

Q358 Chairman: I just wanted to get that nailed down.

Mr Moore: That is why I made the point about the title of this Committee. I think you do have to look across the 14-19 agenda and look at capital expenditure in that context. I am not saying it is not joined up at all. That would be totally wrong of me. I am saying that there are ways. Particularly if we look at the schools department in the DfES, they are less likely to look into the college sector than the college sector is to look into the schools' activity. I think it works better from FE into schools.

Q359 Chairman: The schools' department in the Department are the big bully boys, are they not? They seem to rule everything, do they not?

Mr Moore: You would not expect me to say yes to that, would you? But they do have a big voice and they do have a big pot of money and they do also have the academies' agenda as well. The academies' agenda can well affect the provision 14-19. I am sure the LSC can speak for itself but I know our local office would like to be more involved in those discussions so that we have a really joined-up strategy in the local area.

Q360 Chairman: How do you feel on the mornings when you pick up the paper and Lord Adonis has said, "We really want every school to have a sixth form"?

Mr Moore: I think he needs to look at the economics of that statement. In a place like Stoke you would have a lot of very small sixth forms because we have two large colleges who between them cover the spectrum, if you like, from the very academic to the very practical, and there are an awful lot of economies in breadth of curriculum on offer. As soon as you have a few schools, each one of those schools having a sixth form, and maybe the sixth form is perhaps 100, if they are lucky, then the range of curriculum they will be able to offer and the number of diplomas and so on they will be able to offer by themselves would be very small. If the philosophy is that no institution by itself can provide the range of provision, then you have to be very careful, it seems to me, about having lots of small institutions who will all probably want to do A-levels and who will be very uncertain about how many they can get for a diploma. In each school you might have six or seven people wanting to do a particular diploma line. That, I think, is where FE comes in. FE having the vocational expertise is very well placed to lead in local areas with the authorities on that vocational agenda. I was quite surprised when money that had been coming through the colleges and going out into the local schools was transferred or is in the process of being transferred into school budgets and not being ring-fenced, because there is always a danger that that money may be used more generally in a school rather than to push the 14-19 vocational agenda, so I do have some concerns there. Again, many of our local schools, because they like and value what the colleges have been doing to support them, will use some of that money to go on using those services. But I think there is some variation across the country as well. What I am talking about in Stoke is probably at the better end of the spectrum. In some parts of the country it may be a lot less joined up than that.

Q361 Chairman: John, how does it seem from your point of view?

Mr Widdowson: There is a lot that Graham says that resonates what happens up in the North East, certainly in County Durham. In terms of the diplomas, one of the things we are trying to do there is to build on what has happened 14-16. To echo what Graham says, in my own college we have 500/600 young people a week coming in from 13 schools to take a variety of vocational courses leading to qualifications.

Q362 Chairman: They will all be under 16.

Mr Widdowson: That is right. We have had to make changes. We have had to train staff to deal with the different age group. We have had to learn a lot more about what happens in school, behaviour management policies and things like that, which are quite different from the way we have done things in FE, so we have had to re-skill a number of our staff to deal with these young people. The aim obviously is to get them to continue post-16 because the other thing I would add to what Graham says is that a lot of the developments post-16 need to be aimed at engaging more young people, whether it is in training or in education, because we still have far too many who do not engage - as I am sure the Committee will know too well. One of the things we look at is how we can use that linkage with the school sector to try to pick that middle group of young people and those who are going top become disengaged at 16, to make sure that they have something positive to do post-16 and that they actually see there is some point to the other things they do at school. I think our experience - although it is not particularly scientific, but talking to school head colleagues - is that it does have an impact on a number of young people: they become better attenders at school, they see more point in pursuing their studies to 16 and then go on to apprenticeships or maybe to employment, and a number of them will come into college. Something like 63% last year of the increased flexibility, 14-16 students, came on to college courses, so it does seem to be working.

Q363 Chairman: You have built a new college, have you not?

Mr Widdowson: We have.

Q364 Chairman: Had you ever built anything before?

Mr Widdowson: I was involved in a build project in Cambridge before.

Q365 Chairman: So you had some experience.

Mr Widdowson: Yes, I did.

Q366 Chairman: Where did you look to for broader experience? This was quite a significant challenge. What kind of back-up do you get?

Mr Widdowson: First of all, we get a lot of backup through the process with the LSC in terms of testing the ideas, which eliminates some of the more fanciful ideas. I think you get a very clear grip on the need to control the budget. The first thing you learn is what you do not know, actually - which is a bit Donald Rumsfeldt, I know. You actually find the gaps in your own knowledge, because, in my experience, these large projects test the professional staff in a college - the permanent employees: the senior managers certainly in a college and the middle managers and the academic staff - and test them to the hilt and take them beyond their area of experience a lot of the time. It is not often that academic staff have to make judgments that literally get built afterwards and they then have to live with. It really is a very testing thing and you need to get in all sorts of expert advice. Sometimes, for governing bodies, that can be quite a difficult thing because you are looking at things like advice on project management and maybe independent third-party project management. You are looking at managing substantial financial operations - first of all, in terms of the contracting process, with a variety of builders and others or with the consultants, but also you are undoubtedly these days talking to banks and other financial lenders to work out the best deals, the structuring deals, you are looking at VAT. There are all sorts of things on which you need to take advice. In the normal run of a professional career in colleges you probably would not come across such things in the same way as a major building programme confronts you with.

Q367 Chairman: Is there anyone from the Department of Education and Skills who gives you help with this process?

Mr Widdowson: It is done mostly through the LSC, with the LSC's property people.

Q368 Chairman: We will ask Mike in a moment how much expertise they have. What about the sustainability element. First of all, do staff and the students have any say in what sort of college you are building?

Mr Widdowson: Staff, and the local community as well. We rebuilt on the current site but that has still excited lots of interest from the local population - mostly around transport: the possible increased use of traffic around the site. We had a green transport plan, for example, which we discussed with local residents to try to put that at rest. One of their key issues was around car parking. In any one day we have 3,000 full-time students on site, or something like that, a number of whom, because of the rural catchment we serve, will come in their own cars. It is important that we think about that. The locals were very concerned that we did not have lots of on-street parking, so we had to provide car parking on the campus to alleviate that. A local hospital, half a mile away, had started to charge for parking and the streets were flooded with cars and the locals were not happy. We consulted with the locals. We consulted with students, although the problem with consulting with students is that the students with whom you consult have left the college by the time the project is built, so the students who walk in through the door live with the influences of their peers of a couple of years before. Then there are all the things you have to consult staff about, particularly in a college environment - because we have built restaurants, hairdressing salons, beauty therapy rooms, motor vehicle construction workshops, science laboratories, and it is impossible for any one individual to have complete knowledge of those areas. You have to say to staff at quite a low level in the college, "Look," - if you are designing a motor vehicle workshop, for example - "how do you want it laid out?" and you set up that dialogue with them and the professional team.

Q369 Chairman: At any time did the sustainability of the building come into play?

Mr Widdowson: Yes.

Q370 Chairman: Was that one of the fanciful things?

Mr Widdowson: No.

Q371 Chairman: We have been to schools where they have said, "We wanted to be sustainable but it was all too expensive, so a lot of it was left out." Did that happen to you?

Mr Widdowson: Part of the value engineering process that you inevitably have to go through means that you look at all these things. For example, at the early stages of design we were very interested in photovoltaic panels for generating our own electricity from light. We could not get the grant that was needed to sustain that, but we have built the building in such a way that it will take those panels in the future, so that it is strong enough to take the panels on the roof. We have designed it in such a way to take them, but we could not include them in the initial bid. We have looked at all sorts of other ways of sustainability: rainwater recovery, our waste recycling policy, energy consumption. Building management is a big thing, just controlling the buildings and controlling the environment within the buildings. For example, we demolished everything on site. There was not a single square metre on a 28 acre site that was not touched by the build and none of it was taken off site. It was all recycled and used to re-level and as foundations for buildings and roads and things. We did look at it right from the start and we included it in the contracting and procurement process as well.

Q372 Chairman: You did a lot better than New Wembley, where, apparently, according to the Environment Agency, most of the construction waste was littered all around London in major fly-tipping disasters. Martin, in terms of these pots of money and the fact that a lot of 14-16 are being educated in these colleges, how come they do not get a fair share of that particular pot of money?

Mr Lamb: I think the answer probably is that it is because of the way the Department has designed its capital flow. We have capital funding from the Department that is for colleges and school sixth forms for 16-plus. Local authorities, through their BSF and normal capital routes, have the capital funding for pre-16s. One could argue that you could do it slightly differently but the current arrangement, as Graham said earlier, is that BSF money in local authorities for 14-16 year olds has to be used on school sites; it cannot be used for 14-16 facilities on college sites. That might an area where a little bit more flexibility would be helpful.

Q373 Chairman: Would you and your LSC colleagues not say to someone in the Department; "Look, this does not make sense. There is this emphasis coming from the Department for Education and Skills to retain young people in education. Part of that means 500/600 pitching up in a local college, 14-16." Does the message go back to our friends over here in the Eden Project that there is something changing in education and that these three parts do not seem to suit modern day needs?

Mr Lamb: My understanding is that the Department is reviewing all its 14-19 funding arrangements, both for capital and for revenue, to reflect the changes with the specialist diplomas coming in. That is likely to report around the end of this year or early next year, and I imagine one of the issues that that report will address is the funding of 14-16 vocational centres or vocational activities that will be necessary to deliver the diplomas across England.

Q374 Chairman: Martin, when you are sitting there in your role as the adviser to John and to Graham or the people like John and Graham, what sort of strength do you have at the LSC in terms of knowing about building a new construction and sustainability? Do you have a unit that has that expertise?

Mr Lamb: Yes. The way we distribute the expertise is that we look at three broad areas. First, the education and strategic environment of the college, which is usually looked at by the area director - and most of us have education curriculum backgrounds. We then have a regional property adviser who is a professional property surveyor. Each of the nine regions within the LSC has a professional regional property adviser who provides the expertise and advice to the college on issues to do with space utilisation, sustainability, issues to do with the design of the building, planning regulations and the whole range of technical issues. Then, finally, usually the most challenging aspect, is affordability and price and one of our professionally qualified accountants deals with the financial affordability issues with the college, both in terms of borrowing requirements and also value for money issues for the project. So we tend to operate in those three areas, but of course the colleges, as independent, autonomous bodies, need to seek their own advice and guidance when they get into the project, because project management, particularly of big projects, tends to be particularly challenging, both to college managers and the governing body.

Q375 Chairman: You know as well as I do that if you are banging the table for affordability and price, very often sustainability goes out the window. Are you the hard man that arrives and says, "Stop this sustainability nonsense. I want this done to a price"?

Mr Lamb: I hope we take a commonsense approach to that, which is, on the one hand, we are looking to sustain the best possible value for money for the investment of public money in college buildings but at the same time that we do not reduce that to a non-creative, non-individual approach. We are just in the process, this month, of publishing new guidance on the whole capital project scene, including changed advice on sustainability, where we will now take sustainability issues that bring an upfront cost, such as the electric panels, and, if there are particular additional costs associated with sustainability, we will now bring in additional uplift to the cost parameters we use for sustainability.

Q376 Chairman: We went to a school which shall remain nameless where they told us that a lot of the sustainability stuff was seen in the up-front capital cost as too expensive, so it went, although, with something like putting sprinklers in a school against a fire hazard, over seven years they would recoup the cost of that investment. The insurance premiums would be high because they had not put sprinklers in. They made the decision: No sprinklers because of the upfront capital costs. Would that happen in a college?

Mr Lamb: I would hope it would not.

Q377 Chairman: You are not sure. Graham, John, would it happen on your patch?

Mr Widdowson: There are a number of choices you have to make. It would be wrong, with respect, to think that every sustainable input to a building costs more money. There are some areas where, as you say, you can recover it over a reasonable time. In our own case, with the photovoltaic argument, it was a 20-year recovery. It is a long time. In other areas, in terms of water recovery or passive infrared detectors in rooms, operating-cost money can be saved. A light switched off after ten minutes of no movement, saves money for the college. There is a positive benefit environmentally but also in terms of our bottom-line budget. There are gains to be made from introducing sustainable elements to a building. But you balance up, and not everything can be paid for. There is a lot of expertise supporting the sector. We have Arup, for example, who work with us on the mechanical and electrical side of our new project, and they have a very good reputation in this field, but, inevitably, if you have overall limits that are placed on the cost per square metre, which the LSC has guidelines for, then there is an element of compromise and you do more of one or you do less of another in terms of those up-front costs. I think it is very welcome news now that the LSC is moving to a somewhat more flexible position, with this extra 10 per cent if you can demonstrate that your activities are sustainable and will bring a return in your long-term investment appraisal -which we all have to do, of course. A 25-year investment appraisal is required for every college proposal. Do not underestimate the amount of expertise that the FE sector has developed, not just with the LSC but with those people serving the LSC, architects, designers and so on. There is now quite a track record of good performers in the sector and many colleges will exchange information so as to help others make the right decisions about the companies to use to move this forward.

Chairman: Thank you very much for those answers. We are now going to drill down, first on improving the FE estate.

Q378 Helen Jones: The Association of Colleges, in its memorandum to the Committee drew attention to the fact that very often the most deprived areas are served by the poorest buildings. In your experience, Martin, what is the LSC's priority? Is it to improve buildings in those poorest areas or is it to wait until there are proposals from colleges and go with the flow?

Mr Lamb: A couple of years ago, the answer to that would have been that the LSC would respond to proposals from colleges. Since the end of the strategic areas reviews we have taken a much more proactive line - and, again, as Graham mentioned earlier - our chief executive is very keen that we are able to transform the FE estate in terms of its buildings for fit for purpose and 21^st century style. We now have in each of the regions a regional capital strategy which looks at all the colleges in that region. It looks at the state of the buildings and how much of their accommodation is in good quality and poor quality and we engage with the colleges in a discussion with them and their governors about putting forward proposals to improve the estate. We have just about now replaced half of the available FE estate across England, so, if we are halfway through, it is probable that is the easy half, where there was an inclination to want to do things at college level and the buildings needed to be replaced. We still work on the assumption that we want to replace that other 50 per cent and we are engaged with day-to-day discussions with colleges about how that might happen; in some cases, with complete refurbishment and in others with partial refurbishment or partial new build.

Q379 Helen Jones: How is that reflected in the amount of capital funding that the LSC gives to particular new-build projects? Let me give you an example of what happened in my area. My local college had the indicative amount of funding from the LSC. It has had that amount reduced for actual capital because it was in good financial health, thus saddling it with a larger debt over the years, whereas the sixth form college down the road was given a larger proportion of its capital project from the LSC. My college serves the most deprived communities. Is that sort of strategy sustainable in the long term, saddling those most deprived communities with the biggest debt?

Mr Lamb: I do not think there is any connection directly between whether that was a result of being in a more deprived area. The judgment about how the LSC funds off a particular project is to do with the financial assessment about college. If the college is in a strong financial position, then it is judged that it is right for that college to make a greater contribution to the overall financial project than if it is in poor financial health.

Q380 Helen Jones: I am sorry, but is it right to saddle those colleges with a larger debt over the years which they will then have difficulty funding? Are you not penalising those people who have looked after their finances properly?

Mr Lamb: That certainly is one way of looking at it.

Q381 Helen Jones: I think it is a very sensible way of looking at it. What is the point of looking after your finances properly if the LSC then funds a lower proportion of your capital costs than if you did not look after them?

Mr Lamb: The argument has always been that if you have a certain amount of reserves you should use those reserves towards the building project. There are three components that make up the financial contribution. There is the disposal of assets - and some people have assets to dispose of and others do not. There is then a borrowing requirement. In our new advice we have recognised some of the challenges of the level of debt. We are now looking at slightly less high levels of debt. It was traditionally 40 per cent of turnover after the third year of the completion of the project and we are now looking at that being closer to 30 per cent rather than 40 per cent, so we have recognised that there is an issue; that college governors are often understandably reluctant to enter into large debt to engage in capital projects. Nevertheless, one of the discussions we have with the colleges is to ensure that the servicing of those debts is not to the detriment of the financial health of that institution and that they can afford the debt that they have required for that project.

Q382 Helen Jones: I might come back to that in a minute because it all comes down to how you afford it. Graham, you are serving a fairly deprived area.

Mr Moore: In Stoke I think we can empathise. We have the same sorts of situations. It is a big problem. I inherited a big college with £6.5 million of debt and a rather bad reputation a few years ago. Over the years, we have paid back that debt and we actually paid it back over about five years. Now, with our new building programmes, I am told that there is £10/12 million at least we could borrow. That of course puts you back in the same situation again and that is money that you cannot spend on the students because that is coming out of your revenue income before you have the money to spend on staff and on the quality of the education you deliver. It does seem odd that a comparable school, say, with a sixth form would not be faced with the same sorts of situation. I think there is a simple reason for this, that the capital funding programme for schools per head is more generous than the capital funding programme for the LSC, and the LSC has to adopt some sort of rationing mechanism. I think there is more flexibility in the FE sector to realise capital assets and reshape your estate and there may be some spare capacity. Clearly, with the Government's current policy, which is cutting back the number of adult numbers, it may be that colleges can slim down. More of their delivery is offsite, in companies and so on, so there is a change of provision, so there is some flexibility. Fundamentally, however, I cannot understand why I should have a large debt owing to the bank and use part of my revenue money to pay that back over a period of years at the expense of the current education of our students, whereas in the school sector that does not happen. It is a deterrent and it has led a college like mine to be more cautious about its capital development programmes. Although we are very strongly encouraged by our local LSC to move forward on what are quite exciting plans, it is cause for thought. We do not know and we will not know for some while yet how much money we might actually get from the LSC. That will be part of the negotiation. We put a plan forward, we go to the LSC through the regional group, to the National Capital Committee, and they make a decision about how much they are prepared to give us.

Q383 Helen Jones: I have to say that I was talking about different funding levels from the LSC to a college and a sixth form college, but I take your point on the schools. Martin, what assessment does the LSC make, when it decides what proportion of a building project it will fund, of the effect on future students and the quality of education offered to students in servicing the debt?

Mr Lamb: Part of the process of scrutinising those applications includes a detailed investment appraisal of the project. Very often, the project itself will generate savings in running costs to that institution. It is possible that in those discussions the change to the new buildings will meet a significant reduction for the running costs of that college, so, in a sense, they are not necessarily having to service the debt from money that would have been spent on the students directly, it may just be that the more efficient heating is saving quite a lot of money. That is a very complex and detailed assessment which leads to the judgment by the National Capital Committee of what the level of support will be.

Q384 Helen Jones: Does this complicated and detailed assessment include any consideration of the type of students that a college deals with, of the deprivation in its area, of any of the social indices that we look at generally in education?

Mr Lamb: Not directly.

Helen Jones: Thank you.

Q385 Chairman: While Graham was talking about the comparisons with his funding and the funding for schools, how do you compare that with the funding for higher education down the road?

Mr Widdowson: As a mixed economy college, one-third of our students are HE students. One of the difficulties we had was that the Higher Education Funding Council did not contribute to our development at all in terms of direct funding. We get some capital element within the money that we get from HEFCE but their approach is not project based, it is formula based. Therefore, although we have increasingly got more capital from HEFCE, it was not there at the start of the project.

Q386 Chairman: It is the capital element that follows the student, is it?

Mr Widdowson: Yes, that is right. It is built into the formula that you get in terms of the amount per student, whereas with LSC it is the process that Martin has outlined. I do think there are issues around that. There are issues there, particularly if it is in an area where there is not a lot of higher education, and it is the widening participation issue at that level as well, where you need to have perhaps a different approach. You need to have facilities, where a formula-based approach will not give you the critical capital that you need to create a higher education centre in a part of the country where there probably is not, if I may say, a lucrative market for mainstream, easy-to-get at students. You are trying to bring in students who would not otherwise participate. That is difficult. It needs aspirational surroundings for it to work.

Mr Moore: In Staffordshire it is a bit more complicated. We have something called Surfs (Staffordshire University Regional Federation) which involves all the Staffordshire colleges and one or two other colleges in Shropshire and round about - and we are all on the Surf board! and it is very exciting. Because we have this arrangement, the funding is channelled through Staffs University; it does not come directly. We were entitled to direct funding from HEFCE but we pooled it with all the other colleges because we believed that, together, there was a global sum of money that was about widening participation in higher education and delivering it where it was required and it gave us flexibility to move the money between the colleges. It is fair to say that Staffs University has provided some capital money. There is a joint HE facility with Tamworth and Lichfield College - a very nice facility in Lichfield - and there is some work being done in Burton. Some capital money has flowed through that arrangement but it is done, if you like, through the board and we agree overall where the money should go - because if you were to spread it thinly it would make no difference to any one of our institutions. If we can see some opportunities to develop the facilities, we have done that. It is a bit ad hoc. It depends on Staffordshire University's generosity, because it is not specifically identified. It comes to Staffs University; it may or may not get passed to us.

Q387 Fiona MacTaggart: This story sounds a bit like your story when you came in: "Is this Building Schools for the Future? We are not schools." You seem to be the poor relation to schools, because they have their funding pot and you are not allowed into that. You are the poor relation to HE. Some generous universities, like Staffordshire University, which uses institutions like you to recruit into its degree programmes - whereas the Warwicks of this world might not need to to the same degree - generously let you have some crumbs from the table. It seems to me, from what I am hearing from you, that the sector, in terms of capital investment, is an afterthought to other people's programmes. Is that how it feels? Or have I misunderstood?

Mr Widdowson: I do not think it is an afterthought. Traditionally FE has dealt with the difficult cases, if you like; with areas of difficult recruitment; with work that is relevant to employers, relevant to minority groups and so on. What we have is symptomatic of that filling of the gaps, if you like, and the difficult to define role that the sector has, because it does those things that other people do not a lot of the time and it deals with those people that other parts of the education world do not deal with as well as we would all want. I think that makes it quite difficult sometimes to put us in the right position. On the other hand, it gives us some control as well. None of us want to be in debt. I do not want to be in £9 million of debt from the building we have built, but it is worth it if you look at the difference it makes to the students who come in and the way it raises their aspirations. These, a lot of the time, are the kids who do not stay on in school sixth form, who are looking at employment as much as they are at higher education, and it is a tangible expression of how much value we put in them and what investment we put in them. Though I would rather not have the debt and I would rather that all colleges were in financial category A and that was one of the criteria and all the other things, I still think that the control that the current system gives to college governing bodies, working with the LSC and others, allows us to respond in a way that a bigger system might prevent.

Mr Moore: It may not appear as fair for the FE as the other two sectors, but it is the best deal that FE has ever had. I think we ought to say that very clearly. We are in a position where we can see a transformation. Yes, we might not like to bear the burdens and we see other people perhaps not having to bear the burdens that we do, but I think we are always being entrepreneurial and we will get on and do it because we understand that it is in the best interests of our students and it makes a difference. When you put them in the right setting and you get the right behaviour and the right support out of them, it improves the success rates -which is what we are all about. We would want to do it and we would want the best support that the Government was able to provide us with through the LSC. No, we perhaps do not enjoy being regarded as third in queue for the handouts, but we are getting more than we have ever had before, which is very positive.

Q388 Fiona MacTaggart: Martin, you described the planning process and it was not clear to me how connected that was in terms of Building Schools for the Future in an area, as to how that works and how your planning process plugs into that. Clearly we are talking about the same students.

Mr Lamb: One of the features of Building Schools for the Future is that it is in, I think, 15 waves and if you are at the end of the programme the money does not start to arrive until well into the 2015 area. One of the challenges, for example, certainly in my previous role in Berkshire, was that none of the unitary authorities in Berkshire were in the early phases of Building Schools for the Future, so, in terms of doing a college development - and I was deeply engaged in the one at Bracknell and Wokingham for the new college on the main Bracknell site - there was no possibility of linking it to Building Schools for the Future because at that time, and still, Bracknell are well down the Building Schools for the Future. There is a critical timing issue. Yes, if Building Schools for the Future is operating in your locality in the current planning frame, you could have discussions about how that fits in, but we expect to have the Bracknell and Wokingham College rebuilt before Bracknell would have even started its Building Schools for the Future. The timing issues are very complex, with getting links between schools and colleges, if the local authority is far away from the Building Schools for the Future programme.

Q389 Fiona MacTaggart: Is there any way of solving that?

Mr Lamb: Not easily. I think the issue, as you know much better than I, is that the sheer scale of the Building Schools for the Future programme meant that you could not do it all at the same time. Then there was a judgment about whether you did it uniformly across all local authorities a little at a time or whether local authorities over a period of time replaced all their schools at the same time. I think, from memory, Peterborough was one of the early ones, and they had quite a sizeable amount to tackle the school buildings in Peterborough, but it might be a little longer before other local authorities are in the same position as Peterborough, who were in the phase 1.

Fiona MacTaggart: I liked John's description of entrepreneurialism in the sector. That matches my experience of this. In a way, that means that we are talking about a sector that has traditionally got on with it. I think that is part of what you are telling me: "That is what we do: we get on with it." That means we are in a sector where perhaps the fact that you are not part of a big complex plan is not the end of the world because you are quite resourceful and so on. I am interested in how much importance you put into your future planning on things like recreational facilities for the students or on people understanding how to get around college buildings. I was in a college in my constituency the other day and none of the staff managed to get me effectively from one bit which they worked in to another bit.

Chairman: Is this new build or old build?

Q390 Fiona MacTaggart: It was middle. Not very new, but they did not know their way around. These are the sorts of things which make parents of younger students feel anxious about going into FE: Are there places for them to do sport? Is it easy to get about? If we talk about sustainability, part of sustainability has to be more whether the student experience is one which fulfils all the things. I am wondering how much that was planned into what you did and whether you think you are getting it right.

Mr Widdowson: Clearly with total campus rebuild you have to think about those things, because you have to think about what the use of the site is going to be over 30, 40, possibly 50 years, and community use. The fact that you have a community on site is really important. The worst thing in my view that you can do is just build a few buildings. You have to have some vision about what it is there to do. It has to raise people's aspirations. They have to feel as if it is built for them. For example, in our design brief we talked about where students would perhaps rather be than in an educational institution. That is probably a shopping mall or something like that, where young people go. We tried in certain parts to give that feel to it, so it is a familiar environment. When you talk to students who come into the new campus, they will talk about it being like a university campus - which is quite good because that is the seed we are trying to plant - or like an airport - which is okay - or like the Metro Centre, the big shopping mall up in Gateshead. All of those things are good things because they have a sense of movement, of aspiration, of a place where they want to be, not as institutional perhaps as things have been in the past. I think that is the same for parents as well. It has to be safe physically and in terms of the environment as well, and it has to be somewhere where they feel comfortable as 16, 17, 18 year-olds, studying for two or three years, whatever it is, or for longer than that in some cases. It has to make a contribution to the local community. Our sports facilities are open to the community. We are open seven days a week. We have a gymnasium that members of the public can join. It is significantly cheaper than the commercial competitors that we have, but it attracts a different sort of person, I am being honest about it, who would not normally feel able to pay £400 or £500 a year or whatever it is to join a gym. We feel it has that community contribution. We have local clubs and societies. The badminton club has its meetings there. We have dance classes. A karate club starts this Friday. These are not college activities but they are using the college facility. That was our aim.

Q391 Fiona MacTaggart: Did you have to do the inventing and sorting all that out yourself? Is there a support mechanism which helps perhaps less experienced, less entrepreneurial college principals get these problems solved?

Mr Widdowson: My personal view is that colleges are in that position in all their local communities - or should be. They are part of the social cement that binds a lot of things together. This is a personal view of what a college principal should think, I guess, but, when you have the opportunity to redesign a campus, you need a strategy. You do not just say, "Let's put up a building because this one is falling down." You need a vision of where you want to be in 10/20 years time with that particular building and that campus. You need to put these ideas in; otherwise, you are not fulfilling the potential that the college has in its community.

Q392 Fiona MacTaggart: I am absolutely sure you are right about that. I am trying to get at whether that attitude is structured into the system, rather than that we just benefit from those people who have that attitude. Are there ways of helping college principals to take that kind of approach - not necessarily people who have had a massive rebuild, like you - in every stage of their rebuild?

Mr Widdowson: We have had visits from over 50 colleges now. Some ideas they do not like and do not see them working in their particular context. Others will take ideas and say, "Yes, we can develop that. We can build on that."

Q393 Chairman: Is this the exclusive brethren of your membership or is it from the other colleges that are not in the 157?

Mr Widdowson: I am not in the 157 group, Chairman.

Q394 Chairman: Graham, you are in the 157 group. You have an even more exclusive group, do you not, John?

Mr Widdowson: It is about as exclusive, actually!

Q395 Chairman: But do people, outside the clubs, come?

Mr Widdowson: Yes, of course. Very few of the club have arrived, actually. As Martin was saying, it is as colleges come to look at their estate and take the brave step of either a total redevelopment or a major build. You would not come and look at our campus if you were building an extension to an existing building, but if you are building a significant building or building a total campus it is worth the look, to see the mistakes we have made and the things we do differently.

Mr Moore: We are all here under the AOC umbrella, which does pull all the colleges together, although we may be different. Sixth form colleges, for example, have a different ethos and a different approach from a general FE college. It is a relatively small number nationally. We know each other quite well. We do support and interact very well. We have beacons and so on and people come and share very openly right across the colleges. It is quite a supportive structure that exists in FE. We have a quite challenging agenda in Stoke which is called the University Quarter, where Staffs University, the sixth form college in Stoke and the general FE college (my college) are working together to develop educational facilities to lead economic regeneration in Stoke - which is desperately needed, because we are right at the bottom, if you like.

Q396 Chairman: Who are the partners in that?

Mr Moore: Staffs University, the sixth form college and ourselves are the key educational partners, but it includes the regeneration zone, the new programme of housing renewal, the local authority and the LSC. We are trying to see how we can work together to help Stoke to regenerate using education as the key push. We work very closely with the schools as well. We believe that school development in the city is going to be a major factor in regeneration as well. If you think about what a sixth form college needs, it tends to be perhaps more protective, looking more at an environment which is quite close and to some extent inward looking; a general FE college is helping people to go out in all sorts of directions, with apprenticeships, and lots of adult students as well as young students; and the university very much wants to participate in the regeneration of Staffordshire and North Staffs - a regional university, if you like. With our capital programmes, we are trying to see how we can share facilities between the three institutions - like, for example, a sports village. The sixth form college, in partnership with the local authority, has some wonderful sports facilities; at the general FE college, we have a fitness centre but we have very little else - we are on a very cramped site and we have no sports facilities locally; the university has some sports facilities. If we can all come together and develop this sports village idea for the university students and the students from the two institutions, that is a wonderful synergy for the three of us. We can see the same with business, for example. We have a centre of vocational excellence in business and professional studies; the university is a large faculty; the city needs a leadership and management centre within the city. You can see how the university and the college can bring that together. The sixth form college and the university want to do something for science. Together they can provide much better science facilities which 16-18 students, undergraduates and post-graduates can use. There is quite a lot of synergy but of course we are all looking at different funding streams. We have the advantage of the West Midlands and other people who are prepared to put some money into the overall regeneration concept, if we get it right, but the LSC is clearly going to be the key funder and we are probably talking about £80 million, that sort of figure, from the LSC for the two institutions and then HEFCE at the moment is talking about putting £10 million or £15 million in. If we can get synergy between the LSC and HEFCE and we can get AWM and English Partnerships to come on board, we could have a really exciting package. We are all working hard to convince our three governing bodies, which are separate, that what we will do will benefit all of us but benefit even more the community working together. It is no different from what I was saying earlier about the schools and colleges wanting to work together on 14-19 so that we have real synergy. There are a lot of us in the sector - and I think FE colleges are very good at it - trying to provide that synergy between HE on the one end and the schools on the other to really look at how we transform our communities.

Q397 Fiona MacTaggart: If there were a recommendation which could make it easier for these funding streams to be managed at the receiving end, can you see at all what it would be helpful for us to do in terms of projects which are using different bits of money and access money? What would you say would be a helpful reform to get better regeneration?

Mr Lamb: Whatever the spectrum is - and you could say that is the schools, the FE and HE - there are boundaries between the funding rules of those different organisations and the respective parts of the Department that fund them. I think we will want to see some degree of flexibility around the sort of boundaries/the zones between those, such that it was possible, where it was appropriate, for BSF funding to be used in the college sector; where it could be possible for FE funding to be used in the 14-16 school sector and at the HE/FE interface - on which I think we have made so me progress, but it is still quite a difficult area - across what I would call the core educational funding. But I think Graham has also mentioned that in many projects, particularly big projects now, there are lots of other public funding streams, through the Regional Development Agency, through English Partnerships, through Sport England, and with that, the more funding streams there are, is an exponential level of complexity in trying to get them all together. I think it is really how best we can put all public funding streams together for the best possible delivery in the community.

Mr Widdowson: I think it is that agreement on common purpose and that long-term commitment to it. I think Graham's illustration there about the impact on regeneration in a community, there are projects around the country where that same thing could be said; not all of them have advanced as far as it has in Stoke and other parts of the country. I think when educational opportunity becomes limited by debates over funding streams and who should pay what, when and in what proportion, that is when the other questions will have to be asked, but I think in terms of long-term commitment, there needs to be agreement on what the project is there to achieve, what the vision is. Everyone has got to buy into that in the long-term, and that sometimes can be a problem because institutions move, the management changes, funding councils change from time to time. You are talking about, again, a period of ten, 20 years and a lot of the time we tend not to think in those terms, but that is a minimum for the length of investment that we need.

Mr Moore: It is a complex problem. You need the vision at a local level. That vision is the local partners and the local authority perhaps crucially sharing a vision about what they want for their area. Obviously the LSC and HEFCE need effectively to talk each other. I think, though, the real, crucial solution is here within government. It comes back to the DfES and its tendency (and they will never forgive me for this) to work in silos; so you have got the school silo and the FE silo and the HE silo. There are some efforts, I know, amongst the ministers to speak to each other about these issues and try to have a joined up approach. There has been a sort of batting at 14-19 between FE and the school sector in recent years, whereas it is a clearly shared responsibility, but if a minister for schools has a set of schools' agendas and a minister for FE has some FE agendas, if those agendas do not overlap, if Alan Johnson does not set them targets for actually achieving some joint operation, let us say, on the capital pots, then it will not happen because each of them will focus on what they are tasked to do in their particular areas. So, from this Committee's point of view, I think it has got to start at the top with the DfES and how they can see their funding of education as a whole, not just the particular bits of education they are responsible for, as something which they do have to make more joined up. I am sure they would protest that they are already trying to do that, but I think there is still some way to go in making that a reality. When people come down from the DfES to, say, Stoke and only want to talk about the schools' expenditure or the LSC only wants to talk about FE expenditure, then there is something still not quite right, there are not the right messages coming down. If you want to make a recommendation, it is how the capital pots can be better integrated than they are at the moment, not just at the moment with FE money being used for schools post 16 but also in the other direction. That would be very helpful.

Chairman: I was going to move straight on and focus on sustainability, but I have got a question from Stephen that links very much into the area that we have been discussing.

Q398 Stephen Williams: Can I start off with Mr Lamb from the Learning and Skills Council. Does the Learning and Skills Council include within its capital grants to colleges significant amounts to upgrade ICT, or is that expected to be funded out of college revenue streams?

Mr Lamb: In a college development part of the funding that would be agreed would include not just the infrastructure for ICT but would also include significant fixed equipment for science, engineering - the high cost areas. So, yes, there is an equipment element within the capital grant.

Q399 Stephen Williams: This is to either of the college principals. When you have rebuilt a college or you are planning the rebuild of a college (and, as Mr Moore has said, often that means you have got a larger debt than you started with), there are significant debt servicing costs, how do those servicing costs impact on a college's ability to renew and upgrade its ICT provision over the next few years after a project has taken place?

Mr Widdowson: Two things. One is that when you have the opportunity to do a rebuild then what we said to our design people was: "Do it from the inside out. Look at the technical infrastructure", because that is what is going to be what sustains the college and the learning environment for the next ten, 20 years, so that has to be up to scratch. We almost built the IT infrastructure before we built the fabric of the building, and I was actually more concerned about how that was going to operate than perhaps the external appearance, because once you are in and working that is what the building is meant to do. In terms of the sustainability of the kit, if you like, one of the things we have looked at is leasing, rather than purchasing, kit. Colleges are pretty big players in the market place as clients for various businesses. If you are sharp about it, from a business perspective, you can get some really good deals. You can actually have, as we will have, a turnover every three years of the IT facility, because the students we are taking in now, everyone has got a mobile phone, everyone is highly IT literate in their own particular way, but they expect that level of performance from the college, particularly if we set ourselves out as technical institutions that will lead them to employment. It has got to reflect their expectation.

Q400 Stephen Williams: What would be a typical cycle of ICT renewal? Would it be two years, three years, four years?

Mr Widdowson: We are aiming at three years on a lease basis, yes, and so every piece of kit will be turned over every three years.

Q401 Stephen Williams: And leasing gives you more flexibility to do that and sustain capital purchase?

Mr Widdowson: Yes, plus you do not have the disposal cost these days as well.

Q402 Chairman: I want to move on to sustainability, but perhaps just before we do (and we have had a very interesting exchange so far), when you built your new college, for the simple-minded amongst us, what proportion came from where in percentages? Did 50 per cent come from LSC? How much came from reserves or selling off a bit of crucial inner-city land that you had had for years as a nice little nest egg? What was the percentage that came from all those generous local employers around Durham?

Mr Widdowson: I think the inner-city in Durham is a cathedral, so I think it is inappropriate to answer that. We are slightly different.

Q403 Chairman: They probably gave you a lot of money too.

Mr Widdowson: Am I allowed to make no comment on that, Chairman. The project cost (and this is going back three, four years, when we started this) was 35 million plus. That was sourced from three and a bit sources. We had a 35 per cent grant from LSC. That was about nine, ten million, something like that. We did dispose of the site, which was a complicated disposal, because one of the things that happens in a lot of educational institutions, particularly colleges, is that room reutilisation can be quite poor if the facilities are inadequate, and our room utilisation was very poor for those two sites, so we disposed of the site. That was a site primarily for higher education, so there are lots of strategic risks around that and bringing the whole thing onto a single canvas, but that released about nine million pounds, something like that. We then borrowed about the same amount, structured over 15 years, so that if we can pay it back more quickly we will, and we are going to. Going back to a previous point, we were financial category C when we started to look at this, we became financial category A before we started it and we maintained that category throughout, and that meant we could use college funds and college resources to do it, and we got a small amount of money through the Centre for Excellence Programme that the LSC have established, so something around about a quarter of a million pounds from there to just improve facilities in Automator technician training.

Q404 Chairman: Is that similar to your package?

Mr Moore: So far we are only part-way through our building programme and it has been about a third, a third, a third, a similar picture. Land values are not very good in Stoke, people are not falling over themselves to buy property, so it has been more difficult to raise money in that direction. So, we have had bank borrowing and we are up to about five million pounds of borrowing at the moment and, clearly, if we go ahead with the rest of the building, we will go substantially beyond that, but it is true to say we have also been in difficulties. Because we paid off 6.5 million pounds of debt, we did not recover from category C, we are still in category C. We do not find it easy to raise money from local employers and local individuals; so, as the Government policy to raise a fee contribution from employers and individuals goes up to 50 per cent, we are not getting takers at 50 per cent. We have the choice of just not running the programmes or doing some sort of compromise on the fees we charge. In a city like Stoke it would be disastrous if people stopped participating in education. I have a real worry about the adult fee policy in that context. It may be all right in some parts of the country, it is deterring a lot of people with poor educational qualifications from upgrading those, and if we just take it on the nose and do not charge, we will stay in category C or it will get worse. I have seen a reduction student numbers over the last two or three years because as this fee policy is biting, and we have tried to implement it, so fewer and fewer people move in. The LSC in their latest forecast are expecting 200,000 less students to participate. They wrap it up by saying it will be short courses and perhaps less relevant qualifications, but for many people in a place like Stoke a short course is the way in. We would need less capital money the less we do, but the less we do the less good I think that is for our local community. What is the position of a general FE college for the future? I can see its position to some extent 14-19; I am having difficulty seeing what the long-term position of adult provision in further education is because it is all going to be contestable, private providers and so on can come in. Do you want college buildings for the twenty-first century for adults if you are going to a different way of delivering them? So, the funding is diverging from the revenue point of view. Will the funding from the capital point of view diverge and will most of the money tend to focus now on 16-19 expenditure and there will be less for adults? I think that is an interesting question I do not the full answer to.

Chairman: Let us look at sustainability.

Q405 Mr Chaytor: Martin, 50 per cent of the FE estate has been renewed since 1993. To what extent has the choice of colleges for a new capital build been arbitrary? You earlier indicated that it was driven by the innovative approach of individual college managements, but my question would be to what extent has it also been driven by the accident of those colleges which happened to have large land banks that they could dispose of, and, if that is the case, what are the implications for the next 15 years and the next 50 per cent?

Mr Lamb: If you start from 1993 when colleges were incorporated, there were relatively modest capital developments in the early days because the FEFC did not have a capital funding stream from the department. Over time it has developed and got bigger, but it has been very much that we have been reactive to colleges. I recall when I worked in the FEFC we had a college in the eastern region that was able to sell a small piece of land to one of the big supermarkets. I think they got 27 million. That college then had quite a sizeable amount of investment, but it would not at that time have been possible to do that because there was not enough public funding for capital, and there was a bit of serendipity that that college just happened to have land that was just outside the Green Belt that was just possible. So, I think there was an element that, yes, there were those that had disposable assets. As with almost everything, it is a feature of the quality of leadership and management, both the governing body and of the principal, in terms of their vision for the future, and some had little choice as the buildings were either condemned as being unsafe or no longer meeting a whole range of regulatory requirements. So, I think there has been an element of a range of issues to do with assets, issues to do with the leadership and management and issues to do with sheer practicalities, and at that time I think that was probably the only way of doing it. Subsequently, I think we have got to the stage now where it must be a more planned and reactive programme by the LSC where we are discussing with every college its future building strategy because we have a window of opportunity in the current CSR capital time where there is funding available for colleges. It is worth saying that we have never turned a college down because there was not sufficient funding. Colleges are only turned down if the project does not meet a series of criteria or it is badly thought through, badly financed or badly conceived. At the moment we are just able to meet those demands from the available capital funding.

Q406 Mr Chaytor: In renewing the next 50 per cent---

Mr Lamb: I think the next 50 per cent will be more.

Q407 Mr Chaytor: ---to some extent, the colleges that do not have large assets to dispose of, the level of public funding will obviously need to be considerably higher?

Mr Lamb: Will increase. One of the things that we have looked at is that most of those college proposals tended to be partial rebuilds. They did not have enough money to bulldoze the complete site and start again. We are now encouraging colleges to be more radical in that thinking and, if necessary, to bulldoze the complete site and start again, and I am sure over time the percentage support will go up from what is currently an average of about 30 to 35 per cent. Certainly some recent projects going through the National Capital Committee have been closer to 50 or 60 per cent funding by the LSC as we get into the more hard to reach capital areas.

Q408 Mr Chaytor: In terms of the new-build to date, virtually all of that will have been designed and to some extent constructed, before the doubling of gas and oil prices. My next question is to what extent do you think the existing new-build has fully taken on board the problems of the costs of energy over the life cycle of the building, and what advice has the LSC given to the first 50 per cent of colleges in terms of the implications of energy costs?

Mr Lamb: As I was saying earlier, one of the significant savings often from going into new buildings is that they are much more energy efficient than the old buildings, and we have always encouraged colleges to develop that to the maximum. What, of course, is always immensely difficult is knowing quite how energy costs will change in the future, but my belief is that the technical building requirements that we impose on colleges push them into energy saving, even if they needed to be pushed, which I doubt.

Q409 Mr Chaytor: In terms of the support that the LSC gives, you referred earlier to the property adviser function and the accountant function?

Mr Lamb: Yes.

Q410 Mr Chaytor: But you did not refer to the economist function or the architect function. I want to know how proactive the LSC has been in encouraging the design of long-term sustainability and energy efficiency into the existing build and is that going to be improved in the future? Are you going to be more proactive in the future about building the long-term sustainability into the design of buildings and the long-term costs of managing energy?

Mr Lamb: I think, as more colleges are being engaged in the process, more professional experts from commercial practice have been engaged in both the design and the technical support for those, and that is where we are getting the sort of corporate experience in the sector of being able to say, "Yes, this is how this particular college dealt with the project", and one of our roles is to facilitate saying, "Ah, yes, I know exactly. Go and have a look at the work that they have done at South East Essex College in Southend in terms of design activity."

Q411 Mr Chaytor: In terms of residential building, there has been a recent revision to the Building Regulations which significantly increases the efficiency of residential property. Has there been a similar revision to the standards for new college buildings? For example, at our party conference this year the Prime Minister quoted the figure of a 40 per cent increase in energy efficiency in residential buildings because of the new Building Regulations. Have we seen that same scale of increase in the energy efficiency of educational buildings?

Mr Lamb: I am afraid I do not know immediately the answer to that, but I will arrange a written response to that.

Q412 Chairman: The BSF people talk about BREAM standards?

Mr Lamb: Yes, we have BREAM standards as well.

Chairman: You do. That is what we are talking about.

Q413 Mr Chaytor: Is there any kind of incentive scheme that you would offer through the grant allocation that you control to encourage colleges putting forward bids to be more energy efficient, for example? I think you mentioned earlier that you are increasing the margin by about ten per cent?

Mr Lamb: Yes, and that was really to meet the additional costs of some of the more energy efficient systems compared to the less efficient.

Q414 Mr Chaytor: Conversely, is there a penalty system for those colleges who put forward bids that do not, in your judgment, take on board your long-term sustainability of energy, your water management, waste management? Would you ever refuse a bid on the grounds that it had not sufficiently dealt with issues of energy, water and waste management?

Mr Lamb: My understanding at the moment is that we do not have those precise criteria but that we would be seeking colleges to move into that direction and, hence, add the additional funding, which is often the incentive that they need to move in that direction.

Mr Widdowson: I think since 2003 BREAM approach has been applied to college buildings. So, in looking at the building that we have constructed we had to look to apply BREAM, although it does not have a BREAM rating because that is not compulsory. The BREAM standard is the one that we followed. I think again, going back, it is usually said in one of the appeals to college principals, if you actually look at the way in which some of these approaches to energy - gas, electricity, water - within a new-build concept can actually save running costs. For example, we now know we have no leaks from our mains water system. Before it was leaking underground constantly and had been doing so, we assume, for the last 20 or 30 years, nobody knows, and the same for gas. The other thing that probably has been beyond our expectation has been electricity consumption. So, we have saved on our expectation of gas, but electricity has actually gone up, and that is because there is more use of things like computers in the college now, we have more than we thought we would have, and that is going to be the case over time, I think. So, electricity consumption concerns us, and we go to the market to purchase it to get the best value that we can.

Q415 Mr Chaytor: Broadly speaking, what is the proportion of the total college revenue budget that is consumed by energy?

Mr Widdowson: I would have to let you know about that. I have probably got it in some of the figures I have got here, but it is reduced on what it was before from old inefficient buildings, that is for sure, because it goes back to the point Martin made before about giving our boards of governors assurance we can afford loans. We have to show we can make running cost savings somewhere, and that is in the reduction and the more efficient use of space but also in terms of revenue costs on power and on facilities, but I can give you the figure afterwards.

Q416 Mr Chaytor: Your college also has got thousands of car park spaces as well.

Mr Widdowson: Yes, we have.

Q417 Mr Chaytor: How sustainable is that?

Mr Widdowson: We serve a rural community and public transport does not reach various parts of that community at a time that will allow people to come into college. We also have a large number of adult students who use their own transport. The college is located where there are 26 buses per hour going past the campus, we encourage a car-share scheme as part of the Green Transport Plan, and the planning authority insisted on a Green Transport Plan before we actually were given planning consent, and we encourage students to use public transport and we provide our own transport, our own buses from rural communities in collaboration with the local authority, so we hope that will actually be a disincentive because those buses are free. So, we are hoping to discourage people from using their own transport, because if you get something for nothing, then people in the North East normally will go for it.

Q418 Mr Chaytor: Do you charge for the car park?

Mr Widdowson: No.

Q419 Mr Chaytor: Do people from the hospital use your car park as a hospital car park?

Mr Widdowson: Not when we catch them.

Q420 Mr Chaytor: Could I come back to Martin. The whole issue of transport - car parking, transport, green transport plans - does that appear anywhere in LSC guidance to colleges for their new-build?

Mr Lamb: It is an increasing challenge with the planning authorities, but there are one or two sites which had to be abandoned simply because the planning authority would not accept the increased volume of activity that that site would generate. So, it is one of those issues that we are very clear that the college and us need to talk with the local authority, particularly about transport plans, particularly about the use of cars and their decreasing inclination to agree to large car parking facilities. In some urban areas it is a really challenging issue.

Q421 Mr Chaytor: Finally, what of the comparison with the BSF scheme? The BSF published a glossy brochure describing model schools for the future and there was, to some extent, an element of sustainable design in that. The LSC has not used the concept of model buildings and it has been entirely up to different colleges and their architects to design as they think fit. Have you missed a trick there? Was that conscious? Is there some value in revisiting that and promoting model designs that conform to the best standards?

Mr Lamb: I think we promote model principles, we do not promote model designs, and I think that is partly because---

Q422 Mr Chaytor: Principles - P-L-E-S?

Mr Lamb: On this occasion, yes, because I think college buildings are nearly always rather more complex. I am not saying that schools are simple to design, but they tend to have a greater degree of uniformity, whereas colleges have a number of quite complex facilities which are difficult to produce in what might be seen as a sort of model kit for college design.

Q423 Mr Carswell: On the question of sustainability, I had a couple of questions on which I would be interested in your comments. It seems that the LSC is a pretty key driver in this new building programme and it seems that when it comes to awarding grants the LSC's opinion matters a great deal. For example, the proposals for redevelopment would need to show a commitment to sustainability issues. Forgive my scepticism, but is it not quite so top-down and dirigiste that perhaps sustainability could become a very modern justification for a very ancient vice of central planning and quango state planning? Surely, if you really want to achieve sustainability, you do not try and do it from the centre, deciding what is and what is not going to constitute sustainability, you let go; you organically allow communities to decide what suits their needs. Perhaps, rather than have faux consultations with the local communities, you empower local communities, possibly through their town halls, possibly through the colleges directly, but you get the big quango state off people's backs if you want real sustainability. There is a question mark on the end of that!

Mr Lamb: I think if we were proposing a model college and said, "This is the sort of college that should be built in this locality", I would entirely agree with you. That is not what we say. We design the curriculum on offer, the vision rests, quite properly, with the governing body in consultation with the community, so I do not think that we are being, in this case, centrally directive at all. However, we have a very proper accountability for public money that the scheme makes sense, is educationally sound and is affordable.

Mr Moore: I think that colleges are often unique in their local community and that actually you do not want FE colleges to look the same all over the country, you want them to contribute to their particular local community. Local communities have different priorities, certainly 'green' planning - we have been hearing plenty about that - and working with planners. One of the biggest challenges that we all face is working with local planning communities. We have a great plan to work with a Grade II park. We have a terrible site which used to be pottery factories and it is gradually being converted into an FE institution. It has got a canal wall on one side and it has got hedges on the other. We want to bring those hedges down and open up a Victorian terrace onto a park and bring the park and the students together and create a very different sort of environment. The local people are in favour of that, but the planners get very twitchy. This is somebody who went on to design Central Park in New York and, therefore, there are all sorts of considerations with English Heritage. A lot of the delays in college building programmes up and down the country actually can be traced to a very complex relationship with local planning regulations, and that is much more difficult to satisfy than in some ways the LSC's overarching views about what they want in terms of public expenditure. So, I think there is plenty of local initiative and sometimes some local bureaucracy comes in here as well.

Q424 Chairman: If you ever want to see any development anywhere for the longest time, do not ever get involved with Railtrack! I think John wants to come back in.

Mr Widdowson: Clearly, I would not want to take the dirigiste view because, as both Martin and Graham have said, colleges fit their local communities. Therefore, if I am being honest, as a principle certainly my governing body would not take very kindly to being told in detail what we had to do because, if I can speak on behalf of the governors, they are there in a position of trust to reflect the needs of their local community and they take that seriously - they take the risk seriously and they take the outcome seriously - so I think that is best done at that level. However, to go back to a point that the Chairman made right at the start of this session, I think there are decisions to be made about what you put into a project and what you do not, and I think there need to be some guidelines, some parameters set up, so that chords are not cut simply to meet a rigid bottom line and take short-term interests into account rather than long-term sustainability, and that is where, I think, you need that guidance, a very light hand obviously, but that guidance needs to be there. You also need to persuade people of the value of taking that approach and the fact that it can actually be an economically rational thing to do as well as good for the environment.

Chairman: Are you not tilting here, Douglas, at the wrong kind of windmill, in the sense that this is the most local of educational provision? Your Government set the FE sector free, in a sense, did they not, and even in terms of funding we saw a third, a third, a third. It is pretty independent, is it not, and builds what it likes in some senses?

Mr Carswell: I am slightly asking the question in order to get an answer, and I like what I heard.

Q425 Mr Wilson: Lots of public buildings are now funded by a private finance initiative. I was wondering whether there was much of this in the FE sector and whether you think that in the long-term that is affordable and sustainable.

Mr Lamb: This is not an easy question either. There is, I think, only one PFI project in England, which is at Newbury College in Berkshire, and it probably is that the conventional wisdom is that PFI projects are required to be of a certain size and most individual college projects do not reach the size to make PFI a useful way forward; but, as bigger projects come along, that debate might change because there are certainly now projects in the design stage that might end up at 80-100 million, and that is probably closer to the PFI size of where people believe PFI is the most useful route. Smaller projects traditionally have not been seen as good for PFI, as I understand it.

Q426 Mr Wilson: What is your personal view as to whether borrowing at those levels is sustainable for a college?

Mr Lamb: We think it is sustainable, otherwise we would not require them to do it. As both John and Graham have said, it is built into the funding assumptions for their college budgets that they have to sustain the debt in a particular way. It is one way of stretching public money rather further than if we made a 100 per cent grant.

Q427 Mr Wilson: But you might stretch it to breaking point over a period of time.

Mr Lamb: Indeed.

Q428 Mr Wilson: I noted down in the first section that you borrowed nine million, John?

Mr Widdowson: Yes.

Q429 Mr Wilson: And, Graham, you have borrowed 12 million for your new building?

Mr Moore: We will probably by the time we have completed the new campus. We are about five million at the moment.

Q430 Mr Wilson: What sort of pressures is that going to put on the college? Presumably you have got other borrowing as well, have you, or is that the total?

Mr Widdowson: No, that this is the totality of the borrowing. There are two things; there are good pressures and bad pressures. It makes us look at the business model of the college and makes us as efficient and business-like as we can be, taking into account the mission and what we are there to do is students research, and so we look at other ways of bringing in other moneys other than public moneys, so we outsource a lot of services, which improves the quality actually, we think, as well as making savings over time, but not in core functions - things like catering, cleaning and so on - which tend to take up a lot of principals' time, although the debate of the price and quality of chips in the canteen tends to predominate when you talk to students, but we are able to address that. I think also (it is a point Martin made) in all inefficient buildings you see a lot of money going out of windows in the form of that is the only way you can control the heat in a classroom where the heating system in the building has gone completely. So, it is a balance between the improved facility for staff and students, the impact that has on student recruitment, because I think, certainly within most LSC projects that I am aware of, there is an assumption that there will be a growth in student numbers, but it is not just about replenishing the building stock, although that itself is a good aid, it is also about addressing those young people principally but also older learners (agreeing with Graham's point before)) who do not currently engage in education or training, and that is part and parcel of that rebuild process, and it makes us more business-like, and that is a good thing.

Q431 Mr Wilson: How would you feel, for example, Graham, taking on a 100 million pound rebuilding project? Have you that level of knowledge and experience to be able to get involved in something of that size and scope and all the debts that that is going to create?

Mr Moore: You put the right team together, and I think you do have a situation where, by and large, FE college contracts do get delivered to the price that is negotiated. I think, if you look at the totality of the public sector, we are actually quite good at keeping to our budgets because it is partly our money. We know that the LSC is not going to put extra money in and, if we overrun, it is our borrowing that suffers, so there is a very strong incentive for us to keep the contractors to the price that is actually agreed, and most of us will go into fixed contract price arrangements and we will do a lot of work previous to that. There are a lot of people to advise the sector as well. There are a lot of people who have been through this, so there are teams out there that will support us. We would not know the expertise necessarily ourselves, but I think the issue is that we know people who we have got confidence in and who will work with us and advise and support us. So, we have quite a good record of keeping contracts to price, and that may be because it is focused. A local authority doing lots of schools has perhaps a much bigger task than us focusing on one. I would say it is a leap of faith, however. Who knows what is going to happen in three, five or ten years time in the FE sector. We know there are falling rolls 16-18. We have seen that a lot of the 20-year forecast is based on increasing numbers. It is not at all clear to us that the Government's policy will in the long run support increasing numbers in FE, so we may find ourselves with debts in five, ten years time which are not being supported by the growing number of students that we put into our 20-year forecast. How can anybody really, with confidence, make those sorts of forecasts for an FE sector which is going to be in a very contestable environment? It is quite difficult, but that is part of the process that we have to go through with the LSC.

Q432 Mr Wilson: You have quite neatly summarised some of the concerns I have about it. It sounds, Martin, that this is a route that you want to go down and you see colleges going down. Do you not have any qualms about colleges taking on these huge debts and these huge amounts of money?

Mr Lamb: They need to be affordable debts, because one of the other roles the LSC has is monitoring on behalf of our statutory role the financial health of all colleges. So, in a sense, there is absolutely no incentive at all for the LSC to drive colleges so far down the debt route that they become financially at risk. The judgment, as always, is whether that level of borrowing is affordable or not, and we spend quite a lot of time in our assessment processes with colleges ensuring that those debts are affordable, and, in certain sets of circumstances, the amount of debt may not be as high as the maximum. There is a degree of flex in the amount of borrowing we require of colleges for their project.

Q433 Mr Wilson: An affordable debt today may not be an affordable debt tomorrow.

Mr Lamb: Indeed.

Mr Wilson: The CAB recently surveyed the quality of newly built schools and found that over 50 per cent were poorly designed and built. What would they find if they did the same in the FE sector?

Q434 Chairman: There was the CABE analysis.

Mr Lamb: Yes. My hope would be that they would find rather more well-built, well-designed colleges.

Q435 Mr Wilson: You have not done any research of your own?

Mr Lamb: I am not aware that we have in that sense.

Mr Widdowson: I can only speak from one college's perspective, but if you look at the impact on the students, which is the most important thing in a way, the only important thing, then retention rates have certainly gone up, since the completion of our build, up to 93 per cent, which is very high and higher than we anticipated, if I am being honest. Secondly, student recruitment rates are going up in the 16-18 target group. So, it is yet to be proved over a sustained period of time, but it does seem that it raises people's eyes a little bit and makes them think about staying on in full-time education, makes them think about a high quality apprenticeship programme rather than just drifting, as a lot of people in my part of the world certainly do. Our need group is ten per cent and unknowns about the same; so that is 20 cent of young people. We do not quite know where they are and what they are doing. It is too high. We have certainly seen this year a 14 per cent increase in enrolments from that 16-18 year old group and this the first year of full operation of the campus. Retention registers say over 90 per cent, which is the top, desk-side of the colleges.

Q436 Chairman: Why has not the sector won any prizes. I am going to the CABE Annual Presentation Awards on Thursday evening. I do not see any FE colleges getting awards for their stunning architecture and I do not think I can remember one getting one. I have not seen a RIBA award for stunning architecture. In fact, I was very upset that the CABE Awards shortlist all seem to be in Scotland and London and nothing in the northern regions.

Mr Widdowson: Chairman, I am glad you mentioned that, because our college project is up for an award on 8 November, which is an LSC RIBA award. There are six short-listed projects. So, hopefully, on 9 November there will be some good news in terms of good projects within the FE sector.

Q437 Chairman: That is all for the FE sector, is it not?

Mr Widdowson: Yes.

Q438 Chairman: It is only judging what is the best in the sector, not in comparison with the best libraries or offices?

Mr Widdowson: No, it is within the FE sector to find good buildings. There are two other things that probably it is worth drawing attention to. One is that there was a learning skills network piece of research done on sustainability. They have short-cased six colleges, I think it is, of which the project I have been involved in is one, and we have won a couple of awards, but they tend to be trade awards; so we have got an award for our IT infrastructure, in fact two awards for that, from the trade as opposed to the usual suspects in RIBA and FE circles, so that it is a more commercial judgment about what we have actually done.

Q439 Chairman: You and Graham mentioned your role in lifting communities in terms of revitalising them, and part of that is the quality. When I was in Manchester recently that decision by Manchester Local Authority to Leeds that public sector buildings were of highest quality, which interestingly drags the private sector along to raise their levels and standards of quality of build, that is what you are about, is it not?

Mr Moore: It is partly the modesty of the sector, as always. If you go to City and Islington College here in London, for example, they have got some very fine buildings. If you look at Mathew Bolton College in Birmingham, a very strong landmark building in the centre of Birmingham makes a very big impact. We have won local awards for our Construction Centre of Excellence, which is a real pleasure to go in, and everybody can see all the working environments, and so on, and it is very eye-catching and it has been well done, but we do not have the sort of moneys that, say, an academy has. We can not afford Sir Richard Rogers, and so on. We do not have that sort of money in our budgets to spend.

Q440 Chairman: Graham, a lot of the awards go to really good local architects. If you get a really good local architect, give him a bit of scope, you can still win the prizes.

Mr Moore: I think there is a lot to be proud of in the sector and, you are quite right, I would like to see more of that happen; but to look at the question slightly differently, I am aware of Building Schools for the Future in Stoke and the sort of say that each individual head teacher has in what is a big scheme, and it is a bit of a rush, quite frankly, it is a production-line process. There are standard buildings, and so on, head teachers are asked their opinions, they do not always get what they want, but what we do get in the FE sector, whether it is for good or bad, is what we really ask for because it is for us, it is for the future, it matters to each institution. We spend a lot of time trying to get it right with our staff and our students and I think those are more individual buildings, more interesting buildings, more fit for purpose buildings. Certainly, if you look at the estimation of our students and student satisfaction levels, the customer seems to be very pleased with what they get, and it is because of that ownership, the fact that we are big enough to do it ourselves and we are big enough to care very much and, if it is our money as part of that equation, then we want to get it right. The only issue is whether we can spend enough to make it as dramatic as we would want it to be.

Chairman: I am glad to hear that. All Members of Parliament have a building that they really detest in their constituency. Mine is my FE college building, which was built in the 1960s, 1970s and is awful, but we are rebuilding it.

Q441 Stephen Williams: Some more questions on finance, although we have had a pretty good go at it already. In County Durham and Staffordshire, as you look around at these new BSF schools sprouting up around your counties, are there any lessons from how they have done things that you think are transferable to your colleges, or have they financed it in such a different way that there is not anything you can learn from the processes they have gone through?

Mr Widdowson: I think it is early days in terms of BSF in County Durham. I think there are two things. In terms of design and operability I think the flow in my part of the world will be the other way. There have been now four college projects and others in the region. I think there is a lot to be learned there, some good lessons and some things not to do, which I think the school sector need to have regard to in putting together their interpretations of these model buildings, and so on, and the way the buildings are going to operate - how students make their make their way around, how you control communication flows - that can add cost later. I think the second thing is around value for money and the need to challenge. One thing I have learned over the three years it took our project to take shape were the technology changes as it goes through. So, what was designed on day one may not be the best or the cheapest technology when it comes to be put into the building. You have choices to make all the way through. One of the things I would like to put into BSF is that ability to be flexible during the design and build stage and not simply buy something off the shelf and plonk it down on a green field. One of the greatest advantages but challenges and the hard work of the project we are involved in is the risk that you take when you say, "No, we will not have it that way, we will have it this way", and live with the consequences of that when you see it being built. Graham has mentioned this issue of ownership which, I think, the college sector has. I would like to see transferred as well because that gives you that value for money.

Q442 Stephen Williams: Picking up on what you are saying and what you said to earlier questions as well that even though your financial situation is more complicated and not as generous as BSF, you think because of that you have more control over your projects than a head teacher who might be offered a conveyor belt approach and the school drops off at the end?

Mr Widdowson: It is an interesting sort of comparison between that control and influence, and it is a unique opportunity, it is a great professional opportunity to do something like that, with, I think, sometimes the false peace of mind that what you are going to get at the end is exactly what you want. On balance, I would much rather have that control and that involvement than have to have someone else's mistakes. I am happy to put up with my own mistakes, if I make any, and principals occasionally do, and it is very clear we have to address that.

Q443 Stephen Williams: Chairman, in response to some of Fiona's questions about the different funding streams for new 16-19 provision, existing provision, academies sitting separately, and so on, one of the recommendations one of you said that you would like from our report is that there should be more collaboration and joined-up thinking perhaps. Can you think of any examples around the country where that collaboration is already taking place or is this fragmented approach rife everywhere?

Mr Lamb: There certainly are examples. The Mosely Collegiate College, which has a 14-19 dimension, is frequently quoted as an example.

Q444 Chairman: We were interested in Mosely because they seem to be doing interesting things in Building Schools for the Future as well.

Mr Lamb: Yes.

Q445 Chairman: Any others?

Mr Lamb: That is the one I know best.

Q446 Chairman: If you have any inspiration later, will you write to the Committee?

Mr Lamb: Yes, of course.

Mr Widdowson: I think the other thing maybe is if you take my own context, and that is where these new-build colleges have occurred, then it is about influencing the process under BSF with their partner schools, so not replicating facilities within schools, and that is about communication and talking at a fairly basic level about what goes into the design so that (as Graham said) every school does not build a construction centre when there is a perfectly good and serviceable one capable of expansion in the college. So, it is about collaboration, it is about talking at the early stage before things start to get put into bricks and mortar or steel and concrete, and then reaching agreement at a very local level. Mosely is a good example of agreement reached at local level about how these facilities can be jointly used and jointly developed to the benefit of everybody, as opposed to sectoral self-interest or institutional self-interest coming in.

Mr Moore: The local authority clearly has a key role to play in this. They decide which schools are going to get the money, which schools are going to survive. We have gone for a cluster model in Stoke where we have groups of schools in four clusters, and the colleges and the local authority are trying to work with those clusters and get the head teachers in those schools, who might be a bit competitive on the ground, to actually work co-operatively together, to look at what their schools are going to look like, and, therefore, I think we will get better schools as a result using local authority curriculum people to look at the curriculum planning for the city as a whole, and they do have a responsibility to look at the curriculum planning for the city as a whole, and to take note of what, as FE colleges, we also do. So, I think there are some pure opportunities, some synergy there, and when you have got collegiates, and across the country you have got 14-19 groups across every part of the country now, if you use those effectively, then you can actually move quite well down this road of trying to bring those collaborative capital fundings together.

Chairman: We are coming to the end of this session, but David has a question around FE and HE.

Q447 Mr Chaytor: Two very quick questions, I think perhaps to John. In terms of HE capital, the capital element is rolled up as a component of the revenue formula, but it is the same capital basis as HE and HE will get?

Mr Widdowson: Yes.

Q448 Mr Chaytor: Are there, therefore, any improvements you can suggest in terms of funding capital for HE and FE?

Mr Widdowson: I think there are two things. One is, as I think I said before, where there is a strategic need for more local HE delivery that a particular HEI or group of HEIs may not wish to make in that area, for whatever reason. You can think of areas - Grimsby comes to mind - where there is not a university within 40 miles, and so they talk to the principal of that college, and he firmly believes, and I think he is right, that people will not travel either that 40 miles for all sorts of reasons, so there needs to be high quality HE provision locally available. The current approach does not make that possible unless the particular HEI decides to put some of its own capital there, and there are lots of issues around that. I believe HEFCE have a strategic development fund that might be changed to address that.

Q449 Mr Chaytor: I was going to say, you are absolutely sure that there is not a separate HEFCE fund now for exactly those circumstances?

Mr Widdowson: It is not available directly to colleges; it has to be done through an HEI, is my understanding.

Q450 Mr Chaytor: Secondly, on the question of planning, how long did it take to get all the planning consents both from the local authority and from the LSC for your new-build?

Mr Widdowson: It took just over two years to do that.

Q451 Mr Chaytor: Which is the most cumbersome, the local authority process or the LSC process?

Mr Widdowson: The local authority process was complicated because of the disposal of the site and, although the two proposals are not tied together, they are viewed in parallel, inevitably. There are always issues around highways, issues around main services, so the planning environment is very complex. On top of that, if you think of my own project, it was a pre-existing college site and yet it stimulated the most objections of any planning application in the City of Durham to date, mostly around transport issues and traffic. So, I think you need to take into account in your planning, like every component part of a major project, whether it is funding, VAT, whether it is the planning process, managing the LSC process, because that has to be managed by the college as much as LSC managing the college, all that goes into the project. You cannot really take any one element out of it, and then you commit to getting the thing done as rapidly as possible and you come out at the end, hopefully, with what you wanted.

Q452 Mr Chaytor: The LSC makes the point that the local authority's emphasis on affordable housing on new sites is a difficulty, because presumably it means you cannot release the value of the asset that you would like to, but it is a bit of a dodgy argument, is it not? More executive housing, which deprives young people the chance of getting a foot on the ladder, or building your college?

Mr Widdowson: Yes, I think it is an issue. It has been an issue on the two projects I have been involved with where planning authorities have certain aspirations for a site that the market is telling them are not the right aspirations for that site, and that can depress the land value actually, as can other planning complications. The more complex a site, the larger a site in some cases, the longer it takes, and you have to factor that into the whole thing.

Q453 Mr Chaytor: Finally, from Martin's point of view, do you think that the LSC approval process is as quick as it can be or are there things that the LSC is considering to speed it up a little bit?

Mr Lamb: I think inevitably, because there is quite a lot of activity associated with capital allowance - we are doing about four times the volume of capital that we were - we have had to look at ways of slimming the process down but still retain that very important challenge that the projects are both the right projects and affordable for government money.

Q454 Mr Chaytor: Presumably with the second half of the estate to be rebuilt, there will not be the same complication in terms of asset sales and land sales and that there is a higher group of components.

Mr Lamb: That may very well make it less time consuming, because planning is notoriously challenging.

Mr Moore: I was simply going to defend the LSC by saying that they have a clear planning structure. If you follow that, then the bid should be reasonably smooth if you do that job well. It is not so predictable with a local authority planning structure, and therefore that is normally where I would expect the delays to take place because you do not know quite what their objectives will be. The planning game is an issue. They treat us very much like the private sector. If they see an opportunity, and it could be housing, it could be road improvements, there are a number of things that they could be asking us to fund, in our case it is improving a park when we take advantage of being next to the park, those are the sorts of things which put up the cost. The other thing which John alluded to is VAT. For a number of years we in the FE sector have tried to get the Treasury to look at VAT in a different way. Schools, local authorities, do not pay VAT. We, by and large, do. The only time you can avoid VAT is if you can prove that your building is going to be used exclusively for 16-18 and, therefore, it is not going to attract any fee income. In a general FE college that leads to some very artificial situations. We have two buildings looking over the park. We cannot join those two buildings, because one will be used by young people, the other one will be used increasingly by adults, and yet the local planning authority wants us to join the two buildings. So, we are going to build an arch between the two buildings, which does not touch either building. It satisfies the VAT requirements, so that we do not pay VAT on one building but we do on the other, but it is a bit of a nonsense. Again, if you as a committee can make further representations to the Treasury, it has happened with things like museums, for example, where museums can claim back VAT. We as colleges find that very difficult and it puts up 17 and a half per cent on the price of our buildings. It is quite a big added cost.

Mr Chaytor: You still get wet as you move from one building to the other!

Q455 Chairman: One last thing before we cease to be quorate. Sustainability, very often, is not just about buildings, it is about the attitudes and the behaviour of the people that work in the college and come to the college to be educated. What do you do in the FE sector in terms of citizenship? How do you energise that capacity? Most people talk about citizenship in schools, they do not talk much about it in FE or HE. The Committee went to a school last Thursday where the school was so energised because the students wanted healthy food, they wanted to cut the energy bills down, they wanted clean toilets and the structure of the school involved people in order to achieve those objectives. Do you do anything in citizenship in your colleges?

Mr Moore: We do lots. In fact, citizenship post 16 is very strong in many colleges. We have won some awards for the work we do on citizenship, working, for example, with South Africa and exchanges, and so on, looking at the different cultural backgrounds and how much they value education and how much is valued here. We have got seven out of nine in our Healthy Eating Award Scheme, and so we have got stars in seven of the nine categories.

Q456 Chairman: What about sustainability of the environment, energy costs, turning off the lights, being conscious of your transport, your personal carbon footprint?

Mr Moore: I think increasingly if you look across the FE sector you will see colleges taking those responsibilities extremely seriously and putting it high on the agenda. Certainly, if you see the behaviour and the way students behave in new buildings, it does make an enormous difference.

Q457 Chairman: So they will be conscious of their carbon footprint; they will know what that meant?

Mr Moore: You may be going further than we are at yet, but we are heading in that direction, that is what I am saying.

Mr Widdowson: I think with new-build the one thing that our students are conscious of, all colleges, I think, will have a student representative forums of one sort or another and they are very concerned about the micro-environment, if you like - litter, chewing-gum, smoking. You can start from a one-off. Students do not like an untidy environment actually. What we found over two years is that students look after new buildings a lot better than old buildings seem to fare. They take a pride in them. If you asked them, they would not say it that way, they would not say, "Yes, we are really proud of our new buildings", but they do actually respond. We have got student groups this year who want to undertake environmental projects around the place, some of our learning difficulty students particularly. It is a way for them to get involved in the wider community, and that is a really good thing because it enhances the inclusivity of the college as a community as well. We have also got others, but, being honest about it, a lot of our students will learn to drive or to ride motorbikes in the time that they are with us, so I guess they are less concerned about their carbon footprint at the age of 17 or 18 when they get a driving licence and a bike than they might be a bit later on. I think we have got to be realistic about that as well, but it gives us the opportunity to raise those issues.

Q458 Mr Chaytor: It is interesting you say that. Why should a student from 11-16 have a really high consciousness of that kind of issue and then come to you and be transformed into a different sort of citizen? I do not see that. It is not joined up.

Mr Widdowson: In terms of the temptations of what is available in terms of 16, 17, 18, they have to learn to cope, it is part of the maturing process, I guess, and not every young person goes through that. We have some very active students in terms of environmental issues, driven by particular issues, whether it is recycling, whether it is the biodiversity of the site, all the trees and things that have been planted on the site. In my experience, different students, different groups of students, will take particular issues and particular threads and pathways as opposed to this broad approach that perhaps might be more traditional. There is certainly a group in my college who are very concerned about fair trade issues. You would not say that was a general thing that all students would be immediately aware of, but that student group are very strong advocates and have made some difference to the purchasing policies of our catering contractors, and so it works in all sorts of different ways. Our challenge is to disseminate that across large institutions at very diverse disparate people.

Q459 Chairman: It was very unfair for me to bounce that on you, but if you did, when you get back, want to give us a few paragraphs on what you are doing in citizenship, we are looking at citizenship in parallel to this inquiry and it would be most useful if you could give some written evidence to the Committee because we have not looked at the FE position. One slight worry we had, John. I thought there was a dry moat round the cathedral or some part of Durham, and I wondered if it was going to fill up now you have sorted out your leakage problems, but I hope that is not a threat.

Mr Widdowson: There is a very wet river as well, Chairman!

Chairman: Thank you very much for your attendance. We have learned a lot.