Stalled colleges could be ineligible for £300m fund

Colleges that were forced to stand down their supply chains as a result of the Learning and Skills Council funding debacle could be ruled out of the £300m extra funding announced for the programme in the Budget.

The LSC has sent questionnaires to the 79 colleges that received initial approval before the scheme was placed on hold in January, asking them to demonstrate that they can start on site within three months. In an accompanying letter, Geoff Russell, the chief executive of the LSC, says only these schemes will be considered for funding.

The questionnaire lists three main areas where colleges must demonstrate they are “shovel ready”. They must have construction team in place, they must have tried to cut costs since original bids went in and they should have planning consent.

Colleges have until today to return their bids, with a further deadline of next Friday for supporting documents. But most colleges stood down their supply chains in March when the LSC told them it would no longer fund the projects, and there are concerns that some may not be reconstituted in time.

One principal said: “I know that some teams have moved people onto other projects and the colleges are worried.”

Property consultant Lambert Smith Hampton has been asked by the LSC to visit shortlisted colleges next week to assess their readiness. Once projects worth an estimated £750m have been selected to receive the funding, the LSC will try to reprioritise the rest of the programme on the basis of cost, educational need and regeneration benefit. Most projects will be scaled back from their original scope.

The scheme has been earmarked for £1.2bn of funding in the next spending review period, but this will still leave almost £6bn of projects with an uncertain future.