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Further Education: Borrowing

Stephen Williams: To ask the Secretary of State for Innovation, Universities and Skills for what reasons the restrictions on borrowing placed upon further education colleges and other providers of further and higher education vary; and if he will make a statement. [268604]

Mr. Simon: Borrowing restrictions in respect of Further Education (FE) colleges are set by the Learning and Skills Council (LSC) within its financial memorandum with colleges. The level of consent provided is up to 5 per cent. of a college’s total annual income. Colleges are able to access higher levels of borrowing with the LSC’s consent.

The borrowing restrictions in respect of higher education institutions (HEIs) are set by the Higher Education Funding Council for England (HEFCE) within its financial memorandum with HEIs. Under the terms of the memorandum, HEFCE permission is required where the annual costs of servicing the borrowing exceed 4 per cent. of the HEI’s total annual income.


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The difference in approach between FE colleges and HEIs reflects a number of factors, including the origin and diversity of the two sectors and the development of the relevant funding body’s approach to financial management over time.

Borrowing restrictions for other providers of FE (which include companies, charities, local authorities etc) are determined by the legislation or governance requirements pertaining to that particular sector or institution.

Further Education: Capital Investment

Stephen Williams: To ask the Secretary of State for Innovation, Universities and Skills pursuant to the Parliamentary Under-Secretary of State’s contribution in the Westminster Hall debate on the Building Colleges for the Future programme on 25 March 2009, Official Report, column 121WH, to which hon. Members the Parliamentary Under-Secretary of State has written inviting them to meet him to discuss the matters in detail. [267912]

Mr. Simon [holding answer 31 March 2009]: On the 16 January, I wrote to 105 Members—a list of which is as follows. The letter was targeted at those Members who had colleges in their constituencies that we were aware were affected by the position of the further education capital programme. The letter included an offer to meet with any Members who had concerns regarding further education colleges in their own constituencies.

Prior to the 4 March and the Learning and Skills Council national Council meeting, I had been in correspondence with 58 Members regarding the position of the further education capital programme. On the 6 March, following the national Council meeting, I wrote to each of the Members, updating them on the latest capital funding position, and again offering to meet with Members who had concerns regarding their own colleges.

A list of those 58 Members is also as follows.

Annex 1: List of MPs who received a letter from Siôn Simon MP regarding the further education capital position

16 January distribution list:

MPs


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6 March distribution list:

MPs


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