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Sir Andrew Foster publishes independent report to put the Capital Programme back on track

NEWS DISTRIBUTION SERVICE News Release issued by COI News Distribution Service on 1 April 2009

Issued by the News Distribution Service on behalf of The Review of the Capital Programme in Further Education

Today, Sir Andrew Foster is publishing his report, following his independent review of capital programme management, as requested on 28 January 2009 by the Secretary of State for Innovation, Universities and Skills and the Chair of the Learning and Skills Council.

Sir Andrew, the former chief executive of the Audit Commission, has reviewed the circumstances that have led to the current position of the Building Colleges of the Future programme, managed by the Learning and Skills Council (LSC) and reports on what lessons can be learned.

Within this, he has assessed existing LSC processes, and considered how they can be enhanced to deliver more effective management of the programme in the current economic environment and beyond.

The programme has had some success to date, funding nearly 700 projects at 330 colleges. Government investment in capital projects has so far amounted to £2.3 billion between 2007 and 2010, benefitting many students, staff and communities.

However, on the 17 December 2008 the Learning and Skills Council (LSC), who manage the capital programme, declared a three month moratorium on further projects while it conducted a review. A large surge in college proposals had opened an untenable gap between the resources identified and the cost of projects under way or in the pipeline.

The moratorium caused consternation and great disappointment in further education colleges and continuing uncertainty about the future. When the LSC completed its review of the project pipeline on 4 March 2009 it was evident that 253 projects were already under way or fully approved.

Eight projects deferred from October were also given the go-ahead. A further 79 projects had already received the first stage of approval in principle, with a requirement of £2.7bn from the LSC. A further £3bn would be needed for the 65 colleges that had submitted proposals for approval in principle.

Sir Andrew Foster said: "I have tried to give a full, honest and open account of what has happened, because it is in all our interests to understand and learn. I have met with many representatives of the college sector and the governmental and other national bodies involved with the programme, and I am grateful for the time people have given to this."

He concluded: "The responsibility of DIUS was to determine and monitor the implementation of broad policy. Effective implementation was the role of the LSC. There were warnings of overheating as early as February 2008, but there was delay and confusion in addressing them.

"Then, towards the end of the year, the extent of the problem was finally recognised and the moratorium put in place. There were further failures in the way this was communicated to the sector. At the heart of the problem is the absence of a proper long term financial strategy and inadequate management, information and monitoring.

"I have been forced to conclude that the crisis was predictable and probably avoidable. Certainly, it could have been mitigated if action had been taken earlier. The final confusion in communication made a bad situation worse.

"I recommend a package of measures to ensure speedy recovery in confidence and project policy for the future of the capital programme. This is focussed on a needs-based rather than demand-led approach. It involves improved engagement and consultation between DIUS, the LSC and the college sector. Planning and mapping of potential needs must be enhanced, with more realistic assessments put in place.

"Talks should be held with HM Treasury to reinforce the importance of skills development in the context of national economic recovery, and global competitiveness, and to review resourcing for the continuing capital programme. It is essential that a robust recovery plan is demonstrated. Future development must take place in the context of a comprehensive and competent financial strategy that supports needs-related planning."

Notes to Editors

1. Sir Andrew Foster has carried out two previous reviews of the further education sector, including the review of the role of FE in 2004. Before that, he led the Bureaucracy Review Group for the Leaning and Skills sector. He served as Chief Executive of the Audit Commission for England and Wales between 1992 and 2003. In December 2008, the RSA announced that Sir Andrew Foster will chair a new independent commission looking at the future of public services.

2. In his review of Building Colleges for the Future, Sir Andrew has sought the views of college principals and finance directors alongside those of representative college groups, such as the Association of Colleges and 157 group, and promised his final report by April.

3. The Treasury announced that capital spending would be brought forward in their Pre-Budget Report published on 24 November 2008. For further details, see: http://www.hm-treasury.gov.uk/prebud_pbr08_pressindex.htm

4. The NAO's report, Renewing the physical infrastructure of English further education colleges, published on 11 July 2008, found that the further education capital programme was enabling colleges in England to make good progress in renewing and rationalising their estate, replacing poor quality buildings with high quality, more suitable facilities. The report found that when colleges were incorporated, "much of the physical infrastructure was in poor condition, many buildings required urgent health and safety-related repairs, were unattractive to potential learners, unsuitable for modern learning, inaccessible to people with disabilities and inefficient to run." See http://www.nao.org.uk/pdf.aspx?page=2855 for a pdf of the report and press notice.

5. Since then, the Government has invested huge sums of money into the renewal and modernisation of the further education sector. Between April 2001 and March 2008, the Learning and Skills Council approved colleges' projects at the final detailed application stage with a total cost of £4.2 billion and grant support totalling £1.7 billion.

6. For the full list of capital projects with approval in principle from the LSE, go to page 42 of Sir Andrew Foster's report.