National Audit Office Press Releases
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Renewing the physical infrastructure of English further education colleges

The further education capital programme is 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 programme has taken advantage of colleges’ accumulated reserves, access to loan funding and scope to dispose of surplus assets. In addition, the Learning and Skills Council approved grants of £1.7 billion towards the £4.2 billion costs of the renewal programme.

Around half of the planned work was completed or underway by the beginning of 2008. The progress of the programme has varied between regions: ranging from only 32 per cent of the estate in Greater London renewed by 2007 compared with 63 per cent in the South West. The variations are in part due to project proposals being developed by the colleges themselves, and differences in the complexity and condition of the regional college estates at the start of the Learning and Skills Council’s programme.

Most new buildings are of a high standard, meeting the needs of colleges and learners, and they have been completed on or close to their budget. The earlier projects did not perform well when judged against environmental sustainability criteria, but since 2007 the Learning and Skills Council has required higher environmental standards in new college buildings.

As a result of borrowing to fund the programme, the sector’s indebtedness increased to £731 million by 2007, and its interest payable was equivalent to around one per cent of its income. Between 2005-06 and 2006‑07, the number of colleges that were assessed as being financially weak increased by 21 (from 68 to 89). Whilst this programme is affordable for the sector as a whole, colleges with large debts could be more vulnerable to loss of income if they fail to generate the projected demand for courses.

Tim Burr, head of the National Audit Office, said today:

“The capital programme for further education is enabling colleges and the Learning and Skills Council to achieve together what neither could have achieved on their own, and is delivering high quality buildings. The sector has taken on a higher level of debt, and therefore of risk, but the cost should be manageable. If the second half of the programme can maintain the success achieved in the first, further education will be well placed to offer enhanced value for money."

Notes for Editors

  1. Each year around 3.3 million learners attend courses provided by one of the 376 further education colleges (including sixth form colleges) in England. Since 1993, colleges have been independent corporate bodies, taking over ownership of their premises from local authorities.
  2. The sector receives most of its funding from the Learning and Skills Council, a non-departmental public body of the Department for Innovation, Universities and Skills. By 2010, the Council will have been dissolved and handed over its functions to 150 local authorities, a new Skills Funding Agency, and a new Young People’s Learning Agency.
  3. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  4. The Comptroller and Auditor General, Tim Burr, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

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