College heads told to slash construction budget

The stalled Building Colleges for the Future programme is stirring into life again with plans for £750m of schemes to start on site by the end of June. But college heads have been warned they must slash the cost and size of their schemes to stand a chance of winning a slice of the programme’s meagre budget.

The warning comes in a letter sent to college principals by Geoff Russell the chief executive of the Learning and Skills Council (LSC), setting out how the capital programe will go forward. The initiative ground to a halt in December after a funding shortfall of over £4bn was revealed, leaving 143 schemes in limbo.

In the letter Russell sets out how the capital programme will go forward. He confirms that additional funding of £300m to 2011, announced in last week’s Budget, will allow a "limited number of schemes" to start this year, worth a total of £750m. Further planned funding could bring the total up to £1.2bn to 2013/14.

However Russell warns that the timetable is tight and funding limited. Only schemes ready to start on site "within the next three months" will be chosen for approval by the LSC National Council on June 3.

Russell warns colleges to cut project costs. He writes: "I would expect the costs of projects to reduce because of the reduction in construction costs. I would also expect the scale and scope of projects to be more modest in order to minimise costs. There may also be situations where colleges may decide to simply ask for more modest sums to refurbish."

Property consultants Lambert Smith Hampton (LSH) will review all 143 schemes, recommending which are ready to go and making a priority list of all the remaining schemes. The letter states: "That priority list will be used to approve projects as and when funding becomes available; we will know more about that when the outcome of the next spending review is known."

One college principal said no more than three schemes were ready to start on site. "Even they will struggle to meet the deadline as staff have been stood down during the review," he said.

Angry contractors slammed the lack of funding. One college contractor said: "The Government could have created thousand of building jobs across the country with this pipeline of schemes. Instead we will be lucky to see four schemes get off the ground in total. It is a disgrace and a complete own goal for Labour."