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25 Mar 2009 : Column 110WH—continued
It has been very sad listening to hon. Members talk about all the different colleges that are affected by the funding crisis. It is also interesting to see how broad the spectrum of their experiences is in this matter. Some of the colleges that face difficulties are clearly in the building process, others have detailed plans worked up and still others, such as Cornwall college in my constituency and the college in the constituency of the right hon. Member for North-West Hampshire (Sir George Young), have submitted an application and are still to find out whether it has been agreed in principle—they are also caught in this logjam, albeit that they are slightly further down the line.
Mrs. Humble: Blackpool and The Fylde college is awaiting a major relocation and rebuild decision. Blackpool sixth-form college has had money and phases, but it is just as disappointed because it had been confidently expecting the builders to be on site for the next phase to complete the project. There may be different types of problem, but they all lead to the same disappointment.
Julia Goldsworthy: The hon. Lady is exactly right. What has struck me from listening to other hon. Members is how important all these projects are to the regeneration of their local areas. It is worth emphasising that we are talking not just about the regeneration of inner-city areas; regeneration is also critical to more rural areas and market towns. Although Cornwall college has nine sites across Cornwall, one of the key sites is in Pool in my constituency. There is a massive urban regeneration scheme there, and a huge amount of resources are being poured in. There is a danger that if the college’s project does not go ahead, it will remain a black hole in the middle of a regenerated area. The area has huge deprivation, and unemployment has gone up by nearly 80 per cent. in the past year. There are huge issues to be tackled, and the college will be critical in developing skills and providing people with support, but all that is being threatened, and the people who have been asked to develop programmes are being given false hopes.
The bulge that we are seeing reminds me of a symptom more common in the defence procurement budget, because the commitments that have been made go beyond what can actually be delivered, which is disappointing. I wonder about the motivation for that. Has the LSC encouraged this or has the Department encouraged the LSC to tell colleges to be ambitious—not to prioritise the sites that they felt were most in need of development, but to look at entirely redoing their estates strategy.
I have a few questions to which I hope the Minister will respond. I would appreciate a clear indication of exactly how many colleges are affected and exactly how much public money has been invested in developing proposals. Cornwall college has spent £500,000 so far on developing its proposals, and hon. Members have mentioned other, larger sums. What scale are we talking about? How much money has been spent by colleges that are still awaiting approval in principle? How much has been spent by those that have received such approval? How much has been spent by those that have now been told to put all their building work on hold?
Along with the principal of Cornwall college, I would also appreciate some detail on exactly how the renewed criteria will be reviewed and on what basis they will be
formed. Cornwall college’s proposal is further down the line and still awaiting approval in principle, and the college is concerned that there will be a cut-off, with only those projects at more advanced stages being considered. As I said, this regeneration programme is critical, so I hope that the Minister will be able to reassure us that the impact of any improvements on the wider regeneration of an area will be taken into consideration, regardless of how far the application and the development of the proposals have gone. I very much hope that the Minister will look at the context.
There has been incredibly close co-operation between different agencies at a local level in developing the site. Cornwall college has worked closely with the urban regeneration company and other bodies, but it is concerned that there will be no equivalent co-operation at a departmental level and that it will be affected by that. Again, I hope that the Minister can reassure us that that will not be the case and that the wider issues will be taken into account.
Finally, billions of pounds of investment are tied up in the proposals. All hon. Members have spoken about the impact that improvements will have on young people and about the longer-term support that they will provide to the economy in these difficult times. It seems to me that it would have been wiser if the Government had committed their billions to supporting the programme and ensuring that it could be delivered in all the areas where it is needed so desperately, rather than spending them on a £12.5 billion VAT cut that will have made little difference to the people who would get most benefit from the college development programme.
3.20 pm
Angela Watkinson (Upminster) (Con): I shall speak briefly, to enable as many hon. Members as possible to contribute. I came into the debate with a heavy heart to defend the case of Havering sixth form college and was surprised when my hon. Friend the Member for Basingstoke (Mrs. Miller) showed me a paper from the House of Commons Library that lists it as unaffected. If that is the case, I know that the college principal will be even more delighted than I will be, but I am not very optimistic.
Havering sixth form college is in a far worse state now than it was before the scheme in question was suggested, because, with the encouragement of the LSC, it has embarked on a major capital project and has already incurred costs to the tune of £6 million, in planning and the design process, professional fees and enabling works. The enabling works had to be done to gain access to the LSC funding, which has now been withdrawn. Those works involved the demolition of a sports hall and three classrooms, so the teaching and learning facilities in the college are now worse than they were.
The Minister has kindly offered to have a meeting with me and the principal of the college, and I am very grateful. May I tempt him a little further in his generosity—to come to Havering sixth form college and see the site? I know that his heart will soften, because if something is not done to help the college it will have to waste even more money on reversing the enabling works to enable the college to function. I place myself at his mercy.
3.21 pm
Christopher Fraser (South-West Norfolk) (Con): A consortium in my constituency has been established to put forward a Thetford college bid under the 16-19 capital fund. The decision to establish a new post-16 facility in Thetford was strategic and based on genuine need. Will the Minister confirm whether the current problems relating to Building Colleges for the Future are likely directly to affect the 16-19 capital fund?
The town of Thetford has many historic problems, such as social exclusion, deprivation and unemployment. Three years ago, in 2006, we thought we saw the light at the end of the tunnel when Breckland council secured growth point status for the town. That was a serious commitment to the prospects of Thetford at that time. An integral part of the initiative was raising the outcomes for the town and broadening the learning pathway, which is relevant to the debate, and improving student support through the post-16 facility—the college. The proposal for a Thetford college was offered as new hope to the town as part of the new achievement.
However, the initiative hit a stumbling block as a result of the funding problems associated with the Building Colleges for the Future programme. The consortium is scheduled to place a bid at the end of the year, but the most important point that I have to make is that the ground work in preparation for the bid has been started, and money has been committed. Does the Minister agree that those who bid for future funding need clarification about where they stand? When will some sort of certainty be provided? A new Thetford college would increase learning provision in the town and encourage school leavers to take further training. Does the Minister accept that the ability of Thetford to continue with its progress would be scuppered if plans for a Thetford college were to be put on the back-burner?
The town, which has an historic manufacturing base, is short of skills; 16 to 19-year-olds who live there desperately need access to training, including vocational training. Will the Minister assure my constituents that Thetford’s progress will not be undermined as a result of the funding shambles?
3.24 pm
Mrs. Maria Miller (Basingstoke) (Con): I congratulate the hon. Member for Southport (Dr. Pugh) on securing the debate. My constituency has been hit hard by the funding freeze. In Basingstoke there is an excellent further education college, Basingstoke college of technology, and a sixth-form college called Queen Mary’s college. Both need significant investment if we are to make sure that they can deliver what the Government want from Basingstoke, which is that it should be a diamond for growth and provide the economic prosperity and growth in the south-east that we so badly need during the recession.
Ten weeks ago the Prime Minister said:
“An economic slowdown must not be an excuse to slow down the pace of investment and reform to strengthen our country for the future”.
I am sure that students, parents, staff and employers in Basingstoke want reassurances from the Minister that they will not be let down.
BCOT has a much-needed plan to replace its outdated 1960s buildings with a modern facility that is right for the job, to teach and train employees for the future and to achieve the ambitions that the Government have for us. Indeed, it was the South East England Development Agency that highlighted the fact that access to further and higher education in Basingstoke needed to be improved if we were to achieve the high targets that the Government have set for my constituency. The investment that is made must be focused on those areas that will generate the best social and economic returns. I think that Basingstoke has a strong case to make in that regard.
Will the Minister confirm today that the information given at the capital summit in Westminster on Monday, which representatives of his Department attended, is correct, and that colleges such as BCOT, which have an application in principle on their projects ready for submission but have not yet submitted it, will also be included in the review and prioritisation process? When will decisions be made on that process, and what criteria will be used? I am sure that everyone will want such detail. How will the available money be rationed to be put behind the projects that need to be completed?
BCOT has already spent £1 million on fees to get to the stage it is at. It has been working closely with the LSC in the firm knowledge that building further education capacity in Basingstoke was the Government’s strategic priority. It is vital that we should hear today what support will be provided, particularly given the rising number of NEETs in my constituency. In the words of the principal of BCOT, Judith Armstrong, the project is not a “nice to do”, but is a necessary project that must be undertaken.
Queen Mary’s college is part way through a significant redevelopment of its site and is just entering the next phase. I understand from a letter from the LSC that that is now under review. Again, that is deeply unsettling and a matter of deep concern for everyone involved. The Minister needs to suggest today when we are likely to get a resolution of that. A short delay in the implementation of those plans for BCOT and QMC would be manageable, but a failure to proceed at all would be, in the words of the leader of the council,
“damaging to the area’s economic prospects”,
not to mention the prospects of its young people. The situation is a matter of great concern for my constituents and I hope that the Minister can assure us that there will be a speedy resolution, that he will tell us what criteria will be used to assess which projects can go ahead, and that he will make it clear who, if costs are involved in the delay, will cover those costs.
3.27 pm
Stephen Williams (Bristol, West) (LD): Thank you for calling me, Mr. Benton; I thought that we had three minutes to go for further speakers. I congratulate my hon. Friend the Member for Southport (Dr. Pugh) on securing a debate that is important not only for his constituency—and King George V college in Southport, which he mentioned—but for many others. Many hon. Members have come to the debate, and I am sure that there are others whose colleges’ capital programmes are in jeopardy who would like to have been here, too.
We have heard about problems at Yeovil college and in Chesterfield; we have heard from my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy
about problems in Cornwall. We have also heard about Barnsley, from the hon. Member for Barnsley, East and Mexborough (Jeff Ennis). When we were in the Library doing our homework for the debate, he showed me a clipping from the Yorkshire Post with a picture of a mainly demolished Barnsley college awaiting regeneration next door—a scene from downtown Beirut rather than 21st-century Britain.
We are having the debate, of course, against the background of a deep recession. We heard at Prime Minister’s Question Time today the usual list of all the things that the Government are doing in their various Departments. However, in a recession surely the Department for Innovation, Universities and Skills should be putting more into skills. This is a time when more people will have constantly to reskill to cope with changing economic circumstances. It is the further education sector that will have to rise to the challenge and enable adults to reskill, so that they can find their place again when there is eventually an upturn in the economy.
In addition, the very least that we would expect from a competent Department is to maintain control of its own budget—a budget of just over £2.3 billion, which it often trumpets throughout the country to show the scale of its investment. Indeed, in the Chancellor of the Exchequer’s pre-Budget statement in November, he was encouraging colleges to draw down on the budget at an early opportunity. He talked about acceleration of the Government’s capital programme. Well, now what do we have? The schemes of 144 colleges have been held up, and many others do not know whether they will ever enter into the scheme in the first place. That is not so much an acceleration of the capital programme as a slamming on of the brakes.
Martin Horwood (Cheltenham) (LD): Among all these powerful statements, I should like to bring my hon. Friend’s attention to what is possibly the worst example of all, which is in my constituency and the Cotswold constituency. The National Star college is halfway through a £15 million transformation of its main campus, which caters entirely for those with complex physical disabilities. Does my hon. Friend agree that putting such a project on hold lets down the college, other potential donors, the existing investment and some of the most extraordinary young people in the country?
Stephen Williams: I thank my hon. Friend for his intervention. He may not know this, but I have visited National Star college, which is just outside his seat, and seen the remarkable work that the tutors there do with adults with profound learning difficulties. If that college is in difficulty, that would indeed be tragic for the life outcomes of those people.
The Association of Colleges has done an excellent analysis of the situation by ringing round its membership and has discovered that, at one end of the scale, 30 colleges have spent up to £250,000 on the feasibility stage, and at the other end of the scale—colleges that are awaiting final approval—18 have spent more than £5 million already on their schemes. Those costs have all been incurred as a necessary part of the Learning and Skills Council capital expenditure approval processes. The costs would normally be capitalised, but now they may
have to be written off. The Association of Colleges has calculated that up to £300 million of expenditure may be at risk of a write-off if the schemes do not proceed.
Even if the schemes do proceed, there will clearly be delay, and delay itself is also fraught with risk. All the schemes do not depend just on LSC capital contributions. They also depend on matched funding, usually from sales of land, or contributions from other agencies. We all know that land sales are falling by the day, and many other agencies, such as regional development agencies, also have pressure on their budgets. The schemes depend on tender prices already agreed. Those prices may be renegotiated, or the building contractors themselves may go bust as a result of the delay and a new tender process may have to be entered into. Of course, loans are relevant, too, and the banks may want to renegotiate their loans.
What has been the Government’s response to this fiasco? They have swung from denial—initially they were hiding behind the LSC and the setting up of a review—to a breathtaking display of self-congratulation. As recently as last week, on the website of the Department for Innovation, Universities and Skills, there was a remarkable press release on this issue. The title was “College building programme has created 10,000 jobs”. It stated:
“This is part of the Government’s overall strategy to provide real help now for families...by cutting taxes, helping homeowners...and bringing forward £3 billion of capital projects.”
It went on to make spurious claims about how the college building programme adds a percentage or two to exam pass rates.
I hope that the Government will not hide behind the resignation of Mark Haysom—the chief executive of the Learning and Skills Council—to which the hon. Member for Barnsley, East and Mexborough referred. If anything, the finger should be pointed at the Government. Can the Minister confirm whether Mr. Haysom resigned or was pushed, and whether the terms of his reported £100,000 pay-off, plus, presumably, protection of pension rights, was agreed by his Department, so that we do not get into another Royal Bank of Scotland situation?
I have a number of other questions for the Minister, some of which have been raised already. How much funding will be available to be allocated in each of the financial years 2009-10 and 2010-11 so that colleges can plan ahead with certainty? Will he publish a definitive list of the 79 colleges that have obtained approval in principle and the 65 colleges awaiting approval in principle, which was referred to by the Secretary of State on 4 March? Is the Minister or the Secretary of State having urgent discussions with the Chancellor? The hon. Member for Barnsley, East and Mexborough said that the Treasury had a role to play in this respect. Will there be discussions on relaxing the borrowing rules? Colleges can borrow only 40 per cent. of their turnover. Is the Minister being supported in those discussions by the Department for Children, Schools and Families? Some £660 million of the budget is under its control, rather than his. Sixth-form colleges will shortly be transferred to that Department. Will the Building Schools for the Future budget still be guaranteed for those colleges, or will that be the next scheme in jeopardy?
These colleges have a clear role to play in the delivery of the education revolution that will take place in the next few years. Diplomas will be rolled out. The
Government have ambitious programmes for more apprentices. Last year, we passed a Bill to increase the leaving age for education and training to 17 and then 18. All those laudable objectives could be put in jeopardy if the further education programme is held up. Ironically, Sir Andrew Foster has done a review of this sector before. Back in 2006, he said that further education in England was the unloved middle child of the English education system. It is up to the Government to prove that that is not the case.
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