89. While DIUS was the LSC's sponsoring department,
the Department for Children, Schools and Families is also involved
in the college building programme. Mark Haysom suggested that
DCSF took a hands-off approach, as revealed in this exchange:
Q56 Mr Marsden: You mentioned very helpfully the
issue of Machinery of Government changes and I want to ask you
a straightforward question: given that some 49% of the income
into this sector comes from DCSF, although the sponsoring Department
is DIUS, did you at any time over that period have discussions
formally or informally with officials or ministers in DCSF?
Mr Haysom: About?
Q57 Mr Marsden: About the capital programme?
Mr Haysom: I cannot recollect during 2008 having
Q58 Mr Marsden: So no discussions with no ----
Mr Haysom: Not about the overall state of the programme.
Q59 Mr Marsden: So no involvement with DCSF at
Mr Haysom: There were discussions going on about
the fact that we ----
Q60 Mr Marsden: But you never sat down with senior
officials at DCSF or met with them informally or discussed informally
any of the aspects of the capital programme?
Mr Haysom: We discussed the split that had occurred
in the budget and the actual pressures that had happened as a
consequence of that and we discussed the fact that we could have
been in a situation where there was potentially pressure on one
side of the budget and underspend on the other, but, beyond that,
we did not have any discussions.
90. In the last part of this exchange Mark Haysom
was noting a point discussed in the LSC's Capital Committee in
September and October 2008 about the splitting of the capital
budget. The Minutes of the Committee meeting on 19 September linked
this to the potential overspend, noting "the retrospective
splitting and ring-fencing of the capital budget into ringfenced
DIUS and DCSF portions, without warning, last November ie retrospectively
in-year. Previously the LSC had had a single line capital budget
and was able to offset FE capital spend against the 16-19 Capital
91. The 22 October Capital Committee Minutes noted
The 16-19 Capital Investment fund is now ring-fenced
and the previous years underspend on 16-19 capital was retained
by DCSF instead of being carried forward.
92. The 157 Group argued that forthcoming changes
in the governance of sixth form colleges should mean that "sixth
form college applications [
] should be transferred to the
BSF [Building Schools for the Future] Programme and resources
should also be transferred from BSF to BCF to take account of
the costs of sixth form college projects already approved under
memorandum from the Association of Colleges complained that DCSF
appeared to have released only £80 million out of a £700
million budget towards Colleges, and added that it was possible
that "DIUS capital grants are cross-subsidising pre-19 education."
It suggested that, compared to the process that colleges would
have to now endure, "the same level of rigour has not been
applied in the spending of the capital budgets for school and
university modernisation (£18 billion and £2.2 billion
respectively in the period 2008 to 2011)"
and concluded that "the two Departments need to pool relevant
funds into a single college capital budget."
93. As far as
we can see DCSF was a silent partner in this situation, though
it is clear that within the LSC the splitting of the capital budget
was regarded as a critical factor in making management of the
programme more difficult. We note the points made by the 157 Group
about the possible transfer of some projects to the Building Schools
for the Future programme and urge DBIS and DCSF to work together
to establish whether this is an appropriate way forward. We also
recommend that the proposal for a single college capital budget
using pooled DCSF and DBIS funds is investigated with the outcome
of the review reported to Parliament in the form of a Written