MPs blame Learning and Skills Council for “financial fiasco” of college building programme

July 17, 2009 at 5:39 pm 3 comments

A committee of MPs has castigated the “financial fiasco of the capital programme in further education colleges” and blamed the “heinously complicated” management structure at the Learning and Skills Council.

“The Building Colleges for the Future programme was a flagship endeavour for the Department for Innovation, Universities and Skills (DIUS) (as it then was) and the Learning and Skills Council (LSC),” the Innovation, Universities, Science and Skills Committee committee said.

“Through it the neglected Further Education sector was finally getting the infrastructure it deserved.

“Many colleges, and through them learners and the wider community, have and will continue to benefit from iconic building projects.

“But, as we set out in this report, no-one was keeping an eye on the total amount of money which was being committed and the value of applications coming forward.

“In December 2008 it suddenly dawned on the senior management of DIUS and the LSC that the total potential cost of projects which had received ‘Approval in Principle’ exceeded the capital budget and many more applications were in the pipeline.

“Far from trying to damp down increasing demand in 2008 the LSC had been encouraging it.

“The extent to which LSC regional staff were actively involved in “bigging up” projects is still a matter of dispute between the colleges and the LSC.

“But there is no doubt in our minds that the LSC’s language—particularly the use of phrases like “once in a generation opportunity” and even in January 2009 “there is a strong association between new buildings and high achievement”—was building up a ‘bid now, and bid big’ culture among colleges, which contributed to the funding crisis.”

The Chairman of the Committee, Phil Willis MP, said:

“It really beggars belief that such an excellent programme which had showed real success in transforming the further education experience for students was mismanaged into virtual extinction.

“Warning signs were missed and, even worse, ignored. LSC didn’t notice as the total value of the projects it was considering began to overshoot the budget and a review which could have prompted action was shunted around committees and policy groups.

“The LSC’s Chairman, Council and management were focused on the Council’s looming abolition and the then DIUS, the Department which was meant to be supervising them, clearly wasn’t doing its oversight job properly.

“It is vital that the new Department for Business, Innovation and Skills (DBIS) ensures such a situation is never allowed to happen again.”

The committee concluded:

Lessons must be learned by DBIS and across Government from the events at the LSC in 2008. DIUS clearly failed in its oversight duties.

As we noted earlier in this Report the same management problems that befell LSC were also there in DIUS—a key official did not report back to more senior staff about the Capital Affordability Review; there was a wider lack of challenge; and a total failure to pick-up messages from the sector (or apply common sense) about the scale of commitments which were being made.

The then Secretary of State told us that “the theory of NDPBs when they were first set up, that they protect ministers from the political flack when things go wrong, does not appear to work as well as some of us might have liked […] My conclusion is you should use NDPBs where they are necessary, but not otherwise.”

Events at the LSC show that NDPBs can diffuse political and financial accountability to such an extent that serious problems are not identified or addressed and responsibility for failure is at best unclear.

In this case the situation was made worse by the prospect of the NDPB being wound-up; the Department should have realised that this could affect operations and ensured that its oversight was effective.

We conclude that a review of the operation of NDPBs not just across DIUS (now DBIS) but the whole of Government is urgently required.


Entry filed under: Committees, Commons.

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3 Comments Add your own

  • 1. jasonkitcat  |  July 19, 2009 at 3:57 pm

    It’s really an appalling tale which I know has left many colleges in Brighton & Hove out of pocket. It’s also taken the wind out of their sails after all the grand plans they were working up in the belief the LSC would back them.

    It’s a fiasco, no less!

  • 2. Jason Kitcat: voting, e-voting and e-democracy  |  July 20, 2009 at 3:58 pm

    […] committee of MPs have come to similar conclusions. More from the excellent Westminster blog I Spy Strangers (who I feel report on Parliamentary business in an old fashioned way – which is a good thing in […]

  • 3. Mike Hodson  |  July 20, 2009 at 4:03 pm

    it is also a problem more widely – in that other LSC funding streams appear to have been “raided” in order to repair the damage. The Neighbourhood Learning in Deprived Communities Capital stream – much relied on by Voluntary Community & Faith sector organisations – has been summarily abolished and the Train 2 Gain and Apprenticeship schemes have been summarily curtailed – surely not a coincidence.


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