New Clause 1 — Quality of further education college buildings
Sale of Mobile Homes (Interviews)
6:45 pm

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I beg to move, That the clause be read a Second time.

Alan Haselhurst (Deputy Speaker)

With this it will be convenient to discuss new clause 11— Duty to make an annual report on progress of capital funding—

'(1) As soon as reasonably practicable after the end of each financial year the Chief Executive of Skills Funding must prepare an annual report on the condition of infrastructure of colleges of further education.

(2) The report must provide information about which applications for capital funding by colleges of further education in that financial year have received approval—

(a) in principle,

(b) in detail.

(3) The Chief Executive must send a copy of each report prepared under subsection (1) to the Secretary of State.

(4) The Secretary of State must lay before Parliament a copy of each report received under subsection (3) and arrange for it to be published.'.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

It is good to make my first contribution on Report on this important Bill.

New clauses 1 and 11 reflect the profound concerns that exist up and down the country—I will not go as far as to say that there is fear, but there is certainly profound concern, disappointment and uncertainty—about the Government's freeze on capital projects in further education. They also relate to fundamental principles enshrined in the Bill, the first of which is the ability of providers to deliver an entitlement to apprenticeships.

You will understand, with your considered view about such matters, Mr. Deputy Speaker, that apprenticeships are critical to rebuilding the nation's skills. FE colleges play a crucial role in delivering apprenticeships, and their facilities and resources are central to that purpose. A fundamental part of any apprenticeship framework is the training provided off site, which frequently takes place at an FE college. The 361 FE colleges in England do an incredibly important job. It is perhaps appropriate at this point to pay tribute to them and to the people who work in them because they make such a big difference to so many lives. They educate and train more than 3 million young and older learners each year, including about 750,000 16 to 18-year-olds. That is more than school sixth forms, private schools and training providers.

The new clauses are relevant to the transfer of responsibilities resulting from the division of the Learning and Skills Council into three new bodies: the Skills Funding Agency, the Young People's Learning Agency and the National Apprenticeship Service. Some people have described the Bill as a "bureaucratic muddle". The British Chambers of Commerce made that very remark during the witness sessions that we enjoyed before the Committee stage of the Bill. Others have described it as "opaque", "obtuse", "obscure" and a "missed opportunity". These new clauses attempt to go some way towards improving a very imperfect product.

New clause 1 would place a duty on the Secretary of State to commission a report on the FE college buildings and facilities that are so vital to delivering the training necessary to build the skills that we need. New clause 11 would place a duty on the chief executive of Skills Funding to provide a report on the progress of applications by FE colleges for capital projects.

The reasons for the new clauses have become all too clear recently as a result of the gross mismanagement of the FE capital programme. I do not entirely blame the Under-Secretary of State for Innovation, Universities and Skills, Mr. Simon, for that. I still regard him as a young man of promise, although many in the House regard him as merely a young man of promises. As he knows, I have defended him, on the Floor of the House and elsewhere, against some of the assaults that have been made on him from all quarters, not least the FE sector itself when it found it was facing disappointment and disillusion resulting from the freeze on FE capital projects.

After many months of uncertainty, the Government announced in March that they would be freezing the approval process for 144 college building projects. Seventy-nine of the frozen colleges had already received agreement in principle and were awaiting approval in detail, which is the final stage of the approval process. To be considered for approval in detail, the colleges would already have had to secure planning permission and put together a full project brief. That involves not only the college staff but many other agencies, including those involved in designing the buildings, putting together the necessary infrastructure plans and project managing the process. Many others have been affected detrimentally by this cruel freeze. The colleges have therefore incurred considerable costs in order to reach that stage of development.

The other 65 frozen colleges are waiting for approval in principle. Some have already assembled a project team and put money towards preparing their bid. In my area, Boston college is in just that situation. It provides an outstanding service to many young people and adults from my constituency. In the areas neighbouring my constituency on the south side, Peterborough regional college and Stamford college are also both affected by the freeze. The new clauses would go some way towards ensuring that such matters would be identified and dealt with at a much earlier stage than they have been thus far.

Graham Stuart (Beverley and Holderness, Conservative)

rose—

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I will happily give way to my hon. Friend, who gave such sterling service in Committee.

Graham Stuart (Beverley and Holderness, Conservative)

My hon. Friend knows of the anger that exists in places such as Hull and Beverley as a result of what is happening to our FE colleges. Unemployment is rising fast in Hull and the surrounding area; I think that it has doubled in the East Riding in the past two years. The colleges there could have made more modest investments if they had been guided to do so, but Ministers allowed their expectations to be raised beyond the finances that were available. Hull college, which does not have permission in principle, is therefore just sitting and waiting, and two years on from getting approval in principle, the East Riding college in Beverley is sitting there—with the centre of Beverley looking like a bomb site at the moment—not knowing whether it will be able to proceed.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I note that barely a day goes by without my hon. Friend representing the interests of Beverley and the other parts of his constituency in this regard. Indeed, many hon. Members across the Chamber have raised this issue in respect of their own local circumstances. We have heard similar cries from those on the Labour Benches whose constituents have been affected. Lives have potentially been damaged, hopes have been shattered, and dreams have at least been postponed, and possibly abandoned. What a cruel thing a feeble Government are. It was Edmund Burke who said:

"Nothing turns out to be so oppressive and unjust as a feeble government."

This Government are certainly feeble, and that is putting it kindly.

Philip Hollobone (Kettering, Conservative)

My hon. Friend Mr. Evennett visited the Tresham institute in Kettering at the end of last week, and we heard the sorry tale of £60 million of investment in further education colleges in north Northamptonshire—at Corby, Kettering and Wellingborough—being stalled, thus stalling the redevelopment of the town centres in Corby and Wellingborough and potentially imperilling the university challenge bid that north Northamptonshire is putting forward. The whole redevelopment of north Northamptonshire could be put on hold unless the Government get the situation sorted out.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

My hon. Friend makes a telling point. College building projects are often highly regenerative in their nature. They have a much bigger effect than just the immediate impact on learners and potential learners. They can involve land sales as well as work with a variety of other agencies, employers and education providers. The effect of this freeze is devastating for many communities. I know that many Members across the Chamber are feeling that cold chill in their communities and want the opportunity to explain that to the House.

Kelvin Hopkins (Luton North, Labour)

There have undoubtedly been problems with the LSC, and the Government are now doing their best to pick up the difficulties and to improve the situation. But do not the difficulties derive—in part, at least—from the decision by the previous Conservative Government to throw all the colleges into a competitive business environment, instead of the planned public service environment that I would prefer? Does the hon. Gentleman agree that putting sixth-form colleges back into the Schools for the Future programme is a sensible approach?

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

The hon. Gentleman attempts to take me down a path that I know you would not want me to go down, Mr. Deputy Speaker, because that would take us far from the new clauses before us. Nor am I prepared to have a debate about ancient history. I am rightly drawing the House's attention to the mess that we are in now, which is directly attributable to the mismanagement that, in the end, finds form on the Treasury Bench. It is true that the LSC has something to answer for in this respect, but the buck stops with the people in Government, does it not? I know that the Minister will take on that responsibility squarely and own up to it. I am hoping for the apology that, so far, we have not had in the fullest, most extravagant form—

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

rose—

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I hope that this is going to be both full and extravagant. I happily give way.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

The Secretary of State and I have both said in this House more than once that we are sorry for the situation that we are in. Surely there can be no more extravagant apology than that. It is not really fair of the hon. Gentleman to demand that I come and apologise when I have clearly apologised on the record, and so has the Secretary of State.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I am delighted that the hon. Gentleman has said that, and I take it in the spirit in which it was offered. What he has not done, however, is give an absolute assurance that colleges will not go bust as a result of this crisis. Speaking on the "Today" programme on 19 March, he was specifically asked for such an assurance and said that he could not offer it. Because the Government do not know the full extent of the problem—new cases seem to emerge daily—it is very hard for the Secretary of State to make such an open-ended commitment. Perhaps the Minister will make it for him. Will he now give the House an open-ended commitment that the Government will support all those colleges that have been so badly affected? Will they provide the money promised by the LSC in a full and fair way?

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

I must correct the hon. Gentleman again: we have said it clearly on the record for some time that no college will be allowed to go bust as a result of the Learning and Skills Council's mismanagement of this situation.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I am delighted that we have extracted both that commitment and—

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

rose—

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I will not give way again until I have made a little progress. As well as that commitment, I hope we have extracted an ongoing commitment that, as new cases emerge, they will be dealt with appropriately. I say to the Minister, and I do not say it lightly, that many of the colleges at a much earlier stage of the process have well-established bids. A number of colleges with which we have been in discussions as a result of their fears about these matters have made it clear that although they have not secured approval in principle—still less approval in detail—they have been planning a capital project for a very considerable time with the knowledge, approval and encouragement of the Learning and Skills Council. If the Minister has a better idea of the scale here—both the breadth and depth of his problem—and is prepared to underwrite the necessary capital commitment here and now, I will happily give way to him again. Certainly what has been offered so far goes nowhere towards that kind of financial commitment.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

Just to be clear, the Government are on the record as saying that no college will be allowed to go bust as a result of the LSC's mismanagement of the situation.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

We have heard that once already, Mr. Deputy Speaker. What I was actually asking the Minister for was a further assurance that those colleges that have gone a long way down the road towards putting capital bids and projects together will receive the sort of support they need. If these new clauses were in place and the Government had agreed to their addition to the Bill, we would not, frankly, be in the present position with me having to extract these promises from the Minister, because a report would have been made in good time, anticipating much of the problem that we are now dealing with. I happily give way to the Minister one final time, but then I must make some more progress.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

I have to explain to the hon. Gentleman that he has not "extracted" anything, as all this information is clearly on the record. The problem is that there is a greater expectation of funding out there than can possibly be met. We obviously cannot commit to funding the unfundable commitments of the LSC; what we have committed to, however, is that no college will go bust as a result of the LSC's mismanagement.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

We will talk a little bit more about how the Government prioritise funding and how they intend to allocate the money that has been announced. I repeat for the benefit of the House—and, in particular, for the Minister—that many projects that have not received agreement in principle, still less in detail, despite being well worked up, critically important in a regenerative sense to the community and having received encouragement, advice and guidance from the LSC, will not, I suspect, receive any degree of Government help now. That is because they do not fall into the category that the Minister will conveniently identify as deserving cases. I simply do not buy the idea that the Government will get the criteria or the support right or that they will not disappoint a very large number of colleges and learners up and down the country.

Graham Stuart (Beverley and Holderness, Conservative)

rose—

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I will give way to my hon. Friend, but then I really must make some more progress.

Graham Stuart (Beverley and Holderness, Conservative)

I am extremely grateful to my hon. Friend and I welcome the Minister's apology to the House today. Does my hon. Friend agree, however, that what we have not yet heard from Ministers is any explanation of their role in the Learning and Skills Council's exciting of these expectations around the country? We have seen the LSC blamed and we have seen the resignation of its chief executive, but are we really to believe that Ministers played no part in all this and had no awareness of what was going on? I think that that is incredible and that the House deserves an explanation this evening.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I cannot really answer that in my all too brief contribution. I know that Members will want me to go on and on and on, but the House will understand that others may wish to speak. That point does matter, however, particularly in respect of the new clauses that I am supporting, to which I shall now turn my attention in more detail.

If the new clauses formed part of this Bill, we would know, for example, how much money had been committed in preparing capital bids. The Association of Colleges estimates that colleges have incurred costs of £170 million in planning capital bids—and that is just the colleges we know about. As I have already said, many have fallen between the cracks, as it were. Some £300 million was announced in the budget for FE capital funding, but that is not nearly enough to fund the projects that are now in limbo. We are yet to have clarity from the Government about the criteria that will determine which projects go forward. It is clear that where colleges were in the approval process tells us only so much; we need a much fuller picture of the economic value of individual projects, how far advanced in practice they are and how much colleges and other bodies stand to lose if their bid is not approved.

This crisis exposes the Government's inconsistency—I hesitate to use the word "hypocrisy", Mr. Deputy Speaker—as far as capital spending is concerned. It is a crisis entirely of the Government's own making. The Government commissioned Sir Andrew Foster, a distinguished commentator, writer and thinker on these subjects, to write a review. It was he, after all who, at the behest of the Government, wrote "Realising the Potential: A Review of the Future of Further Education Colleges" in 2005. Sir Andrew Foster concluded that

"senior staff in Dius could have probed more actively the robustness of the forward projections of future funding commitments. Their challenge was insufficiently incisive to uncover ongoing flaws in implementation."

So we know that Sir Andrew Foster's answer to the question posed by my hon. Friend Mr. Stuart would be that the Department for Innovation, Universities and Skills had a key role to play. When we speak of DIUS, furthermore, do we not speak of Ministers? It would be quite wrong for the buck to stop with civil servants, officials and quangos when it is the politicians and the Government themselves who answer here in this House.

You will have recognised, Mr. Deputy Speaker, that new clause 11 refers to

"an annual report on the... infrastructure of colleges"

and to

"information about which applications for capital funding"

have been approved, which should be broken down to show which have been approved "in principle" and which "in detail". The provision also makes reference to the key role of the Secretary of State because the report proposed in the new clause must go to him, making a direct link between what is happening on the ground in colleges and what the Secretary of State knows and does on—

Alan Haselhurst (Deputy Speaker)

Order. I want to assure the hon. Member not only that I had indeed noticed it, but that I was rather hoping that at some point he might notice it, too, as he has been conducting a rather general debate as opposed to engaging with the more particular points at the heart of his proposed new clauses.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I am grateful, as ever, for your guidance, Mr. Deputy Speaker, and I can assure you that I had noticed the new clauses. Indeed, they are highly pertinent to the exchanges taking place across the Chamber because they tie Ministers to an empirical assessment of where bids are, where they have come from and how much they are going to cost. That contrasts with what has happened over recent weeks and months, where the link between Ministers and those things has been opaque, obscure and obtuse. That is simply not good enough.

Since it was established in 2001, the Learning and Skills Council has undergone three major reorganisations. Under the Bill, it will be abolished and replaced, as I said, with three quangos. Perhaps it is not surprising that the LSC took its eye off the ball. The Government are, of course, now keen to attribute blame to the LSC; we hold no candle for that body, but because legislation of the kind we propose in the new clauses was not in place, it is perhaps not surprising that Ministers lost control, were unable to anticipate these matters and were unaware of some of the facts.

Indeed, Ministers now claim that they did not know what was going on. They must claim that, must they not? If they did know what was going on, they would take full responsibility rather than partial responsibility for the mess we are in. The projection of costs seems to me to be a pretty fundamental part of managing capital budgets. How can we possibly not know how much we have planned to spend against how much we have got—surely this is bread-and-butter stuff? To be told, in the Minister's words, that the Government could not possibly meet the ambitions of colleges is extraordinary when those ambitions were fuelled and fostered by the very body charged with that purpose—a body that was, in the end, answerable to Ministers.

Despite causing the disruption, Ministers failed to monitor information that their Departments were receiving. The crisis puts into sharp focus the issue of responsibility for capital projects under the new arrangements proposed in the Bill. If the Bill remains unamended, I suspect that we might get into such a mess again, so these new clauses and what we said on Second Reading, in Committee and subsequently are made all the more pertinent by the circumstances that I have described in these few words.

The circumstances regarding FE were not entirely known when we began to debate the Bill; the truth has come out gradually. As I say, more and more colleges have made it clear that they, too, were promised the large investments that, clearly, the Government now are not in a position to make available. However, it is not entirely true that Ministers knew nothing until very recently, because an examination of the LSC minutes makes it perfectly clear that, as early as February 2008, doubts were raised about the capital funding of FE colleges. Certainly by autumn that year, it was as clear as crystal that a major crisis was about to engulf the sector and the Government.

We did not receive an adequate explanation from Ministers in Committee, and last week at departmental questions, the Secretary of State said:

"one of the reasons why our universities are so good is that I do not run them".—[ Hansard, 30 April 2009; Vol. 491, c. 1027.]

That is certainly true. If he ran the colleges, I guess that we would have had the same thing repeated in revenue terms as we have had in respect of capital bids.

The new clauses, plainly and simply, would improve the Bill. If I were in government in such difficulties, I would grasp the new clauses with both hands and take the view that the Opposition were trying to be helpful. Nothing in the new clauses is partisan. They are entirely consistent with the rest of the Bill. They would provide better lines of communication and better information to Ministers. They would prevent Ministers—whether Labour or Conservative—from finding themselves in the circumstances in which this Government find themselves in respect of FE. At a time of great economic uncertainty, the last thing we need is a Government who create more uncertainty, yet that is what all this has done.

We do not think that the LSC is perfect and we know that it needs reform—that is why we have outlined plans for a streamlined agency to fund FE—but we do not think that this is the right time to spend money on restructuring rather than on training.

The FE capital funding crisis shows what happens when Ministers are more interested in changing structures than transforming lives. Fallacy follows falsehood, and failure follows both. We need Ministers who mean and do what they say, not pass the buck. We need a structure for the funding and management of skills that is cost-efficient and effective. Most of all, we need a Government who trust FE to deliver the training to build the skills that our people want, our communities deserve and our economy needs.

Stephen Williams (Bristol West, Liberal Democrat)

I welcome the new clauses that Mr. Hayes has just spoken to. I met the new chief executive of the LSC, Mr. Russell, shortly after his appointment. First, we should thank him for his public service in taking on the poisoned chalice of trying to bring some coherence to an organisation that is not only in its dying days, but is dying in a sense of crisis and much public ridicule. Mr. Russell has already commissioned consultants to develop new criteria for an assessment against which college bids can be assessed. Both new clauses would complement that in-house procedure and review.

In DIUS questions last Thursday morning, this issue came up several times and the Under-Secretary of State for Innovation, Universities and Skills, Mr. Simon, was unable to say when the review being undertaken by the LSC will reach a conclusion so that colleges can get some clarity and certainty in this area—perhaps he will elaborate on that today—or how far the £300 million announced in the Budget will go.

The scale of the problem that we face is indeed large: more than 140 different schemes up and down the country have reached various stages of application—either application in principle or detailed approval—while others are the subject of early discussions, although they are still incurring costs as part of their bidding. One such college is Star college, which works with adult disabled people. I have visited Star college. It is in the Cotswolds and has been mentioned on several occasions by my hon. Friend Martin Horwood. My hon. Friend Mr. Laws, who has not yet returned to the Chamber, has asked me to mention also Yeovil college.

I wrote to Mr. Russell on his appointment, asking him to tell me the parliamentary constituencies in which colleges are waiting for detailed approval finally to be granted by the LSC—and 77 parliamentary colleagues have at least one college in their constituency that is at the detailed approval stage. For instance, my hon. Friend Sarah Teather tells me that the bid made by the college of North West London in her constituency is essential for the regeneration of Wembley. My hon. Friend Bob Russell has two such colleges in his constituency—Colchester institute and Colchester sixth-form college—and I should also refer to Plumpton college, in the constituency of my hon. Friend Norman Baker, and North Devon college, in the constituency of my hon. Friend Nick Harvey.

Bournemouth & Poole college is near to the constituency of my hon. Friend Annette Brooke, who has been with us for most of the debate. She tells me that several million pounds have been spent on that college's bidding process so far. I visited the college with my right hon. Friend Mr. Clegg in September last year as part of our party conference and saw the excellent training work that was going on there. It is a centre of excellence, in particular for catering. It is a shame if the students of that college are at all uncertain about the future facilities for their courses.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

The hon. Gentleman spoke well about these matters in Committee and does so again today. The point that I hope he will agree with is that this matter involves not merely the colleges that have received approval in principle, let alone those awaiting detailed approval, but many other colleges and, therefore, many other constituencies across the country. Unless the new clauses are accepted—I think the Minister will accept them—we could get into such a situation again.

Stephen Williams (Bristol West, Liberal Democrat)

I thank the hon. Gentleman for his intervention. I think I said that there are two formal parts to the process: approval in principle and approval in detail. Many other colleges are involved in early discussions, but have none the less incurred costs. Some have commenced work and are part way through their building programme. Many of us have been shown photographs of part-demolished Barnsley college by Jeff Ennis. I could mention many other colleges on the list—for instance, South Devon college, in the constituency of my hon. Friend Mr. Sanders. When he was in the Chamber earlier, he told me that the scheme is worked up and ready to go. Work could start tomorrow and all that is needed is approval to proceed.

It is not at all clear from the Budget debate, DIUS questions last week or various Westminster Hall debates on the topic how the £300 million brought forward in the Budget will help in the current financial year. It appears from the letter sent by the Secretary of State for Innovation, Universities and Skills to vice-chancellors and college principals on 22 April that, as well as the £300 million for the current financial year, 2009-10, there will be a planning assumption of a further £300 million a year from 2011-12 to 2013-14. That totals £1.2 billion and rather implies that the capital budget for 2010-11, which is the next financial year—I know that I am mentioning many years—has been raided to bail the Government out in this financial year. Perhaps the Under-Secretary will confirm whether that is the case, because the £1.2 billion over five years clearly does not correspond to £300 million for each year. One year must be missing, and it appears to be 2010-11, which of course is the year straight after the next general election.

Graham Stuart (Beverley and Holderness, Conservative)

The hon. Gentleman has put his finger on an important point. In many areas, the Government appear to have adopted a scorched-earth policy. They are raiding future budgets in order to bolster their current popularity as they approach a general election which, as they are increasingly aware, they are likely to lose.

Stephen Williams (Bristol West, Liberal Democrat)

That is an excellent point. It is indeed a political scorched-earth policy. Not only are the Government producing money from budgets allocated for the period after April 2010, but many tax rises are due to be introduced immediately after the next general election.

When the Minister replies, he should bear in mind that what the sector needs is more certainty about how the extra £300 million for the current financial year will be spent. A rationing exercise will clearly be necessary. Not all the bids currently lodged with the LSC can possibly be funded from that £300 million. Many bidders, indeed most, will miss out, and the sooner they know that, the better. All of them will have incurred bidding costs and planning fees, and will have commissioned architects to help them to draw up their proposals and submit them to the LSC's capital board.

Following a survey of its membership, the Association of Colleges calculated that 30 of its colleges had spent at least a quarter of a million pounds on bids, and 18 had spent more than £5 million. All that expenditure may be in vain if the capital programme does not go ahead. Many of the bidders will want to know whether their costs will be met by the LSC. The irony is that those costs, not only for the colleges at either end of the range but for the 100 or so in between, will probably be close to the £300 million allocated in the budget. There is an urgent need for an assessment of what is required by the further education sector—which is the purpose of the new clauses—and for clarity from the Government on the funding criteria that they will apply in future, through the LSC.

The hon. Member for South Holland and The Deepings began by observing that further education was crucial to our economy, and I shall end my speech in much the same way. The FE college system is essential to helping people to negotiate their way through the current recession, and even more essential to ensuring that we emerge from the other side of it with a world-class, well-skilled work force. We must meet not only the industrial demands that we will face in the future, but the demands of climate change. We shall need skilled engineers to meet the 2020 targets on which consensus has been reached. There is no point in setting such targets if we do not have the engineers and technicians to meet them. The FE sector has a crucial role in bringing those skills to the workplace and the design board, and it deserves rather better than the ineptitude that it has suffered from the Government so far.

Andrew Turner (Isle of Wight, Conservative)

I want to highlight the problems that the freezing of the college building programme has caused on the Isle of Wight, although I believe that there should be regulated annual audits in all areas to establish what capital is spent.

The Isle of Wight College is the only further education institution on the island. For many islanders, it represents the only opportunity to receive further education before entering the workplace. Employers value colleges as a source of training, especially during a recession. As the island has relatively high unemployment, taking a college course can make a real difference to someone's prospects, but all that is now in jeopardy. The freezing of funds promised to the council has not only indefinitely delayed vital renovation work, but cost the college more than £2.3 million in development fees alone. It would have cost a great deal more had the college not benefited from the common sense and prudence of its principal, Debbie Lavin—common sense and prudence that the Government and the LSC evidently lack.

The Government are guilty on a number of fronts. There is evidence that the Department for Innovation, Universities and Skills and the LSC knew about a possible overspend as early as February 2008. Mrs. Lavin says that the college was encouraged to continue with the building project until as late as December 2008. DIUS and the LSC were too slow to respond, having had a good eight or 10 months in which to flag up a problem. During that period, colleges—blissfully unaware of the impending crisis, and egged on by the national LSC—spent money, made plans and, in some cases, tore down old facilities. Fortunately, that did not happen on the Isle of Wight. If the colleges had known then what the LSC and DIUS knew back in April—or February—2008, they would not have been so hasty. DIUS Ministers and the LSC should not have encouraged colleges to go ahead if they did not have the money to see the projects through. Colleges throughout the country are now paying the price for the delay. Temporary cabins are being hired in which to teach students, and fees for retaining contractors and professional advisers continue to be paid.

Adding to all the financial woes, the Government are muddying the waters by further complicating an already complex system. The ineffectual LSC is to be abolished, only to be replaced by three new bodies. That has led to further confusion and worry, especially as there is no evidence that the more complicated system will be any more efficient.

The Government are seeking to gloss over the whole issue with their announcement of £300 million earmarked for colleges. We have not been told where the money will go, but it is clearly an insignificant sum in comparison with the scale of the crisis. This is akin to putting a sticking plaster on a disembowelment. We need transparency in regard to further education funding, so that we all know where we stand. New clauses 1 and 11 will help to clarify the situation for the House, colleges and the public. This sorry affair cannot be allowed to happen again.

Sir Andrew Foster's independent and damning report on the college building debacle highlights the existence of Government and LSC incompetence at almost every stage of the process. The LSC chief executive did the albeit late but none the less honourable thing, and fell on his sword. Why have not DIUS Ministers taken their responsibilities just as seriously? Or were they and their officials kept ignorant as well? I can tell the House that it was ignorance. The LSC made decisions—or perhaps it is better to say that it did not even make them—in a state of failure. That is the problem, and we must put it right.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

Most of the speeches that we have heard have ranged far beyond the scope of the new clauses. I understand why Members wanted a general debate about the further education sector as a whole, and about the FE funding situation in particular. Those are serious matters which are of great concern to Members throughout the country, to their colleges and college principals, and to the corporations of those colleges. Many of them are represented by lay individuals who might feel very exposed and concerned about the position they are in. I understand that Members are constituency representatives—and, indeed, are sometimes Opposition Front Benchers with that job to do—and that they will want to make their points and to seek answers from the Government.

With your permission, Mr. Deputy Speaker, I propose to speak initially to the new clauses themselves, which have so far received relatively scant mention in the debate, after which I will move on to try to respond to some of the general issues, and in so doing I will be at your mercy as to how wide and generally I may stray and for how long you think it will be appropriate for me to carry on speaking.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

The hon. Gentleman says he understands why Members have ranged widely. If he does understand that, why have we had no debate in Government time on Sir Andrew Foster's report, because that would be a more appropriate way of dealing with these matters than by addressing these new clauses?

Alan Haselhurst (Deputy Speaker)

Order. I think what the hon. Gentleman has just said rather underlines my intervention earlier. I allowed him to make a rather wide-ranging introduction to his amendments, and therefore I owe it to the Minister to let him at least reply. However, I hope that Members of all parties will recognise that there are still quite a lot of groups of amendments to be debated, so we do not want to spend an extended amount of time on this group—although let me stress again that, in fairness, the Minister must be given some opportunity to reply to the general nature of the debate.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

I am very grateful for that, Mr. Deputy Speaker.

New clauses 1 and 11 are not necessary. In terms of new clause 1, an ongoing benchmarking programme already exists. As part of the capital investment programme, almost all further education colleges—some 98 per cent.—are already participating in an existing property benchmarking programme called eMandate overseen by the LSC, and that programme will continue under the chief executive of skills funding.

The eMandate programme captures data on an annual basis from all participating colleges in the FE sector. Those data include information on the quality of their estate and their estate management costs. Participation in the eMandate programme is open to all FE colleges and is compulsory for any college that wants to apply for public capital funding for building. We simply do not need the kind of stocktake described in new clause 1, because precisely that process already exists, and because nobody has suggested that a lack of that kind of information caused the problems with the FE capital programme.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

So the hon. Gentleman is saying that, in almost all cases, we know the state of college buildings, yet there was no relationship between that information—which presumably came to the Department and Ministers—and the business of encouraging capital bids. That is inconceivable, is it not?

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

It is not inconceivable at all. The problems with the colleges were to do with financial management, not with a lack of information about the state of the estate, or with the quality or the cost management of the builds themselves. The Foster report came to the explicit and clear conclusion that this was a good policy let down by poor implementation, and the manner of that implementation was not at all of the sort described—or apparently rectified—by new clause 1.

Graham Stuart (Beverley and Holderness, Conservative)

I simply do not understand that reply. Surely there should have been a needs-based assessment of what needed to happen to the buildings in the FE sector. How else could anyone properly approach this? Without that, it is not possible to assign priorities or to ensure that there is the most prudent use of public money. That is what perhaps most irritates my constituents. They realise that the Government have simply wasted millions of pounds on unnecessary projects, and that now tens of millions of pounds will be wasted on consultants' fees for projects that will never proceed.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

As the hon. Gentleman said, one of the key conclusions of the Foster report is that the programme should have been much more needs-based, and it is clear that it must be more needs-based in future. The reason why it was not needs-based was not because good information did not exist about the state of the FE estate; that information was being collected. The problem was that it was not used effectively. New clause 1 would set up the paraphernalia to collect that information, but that paraphernalia already exists. Good information already exists, but the right things were not done with it. New clause 1 is therefore not the answer to this problem.

Graham Stuart (Beverley and Holderness, Conservative)

It seems to me that that form of methodology applied to that level of spend is a strategic issue. Does the Minister therefore accept ministerial responsibility for failing to ensure that, in terms of that fundamental way of dealing with such huge sums, the Government, rather than the LSC alone, failed to do what they should have?

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

No. Foster was very clear that this was a good policy let down by poor implementation. He was also clear that— [Interruption.] The hon. Gentleman mouths "whitewash" from a sedentary position, but it was a very high-quality impartial report. Mr. Turner said it was damning. It was not damning of Ministers; it was clear and explicit that the responsibility of Ministers was the direction of policy, and that the policy was a good one, but that the implementation of the policy was the responsibility of the LSC and that is where the policy was let down.

Graham Stuart (Beverley and Holderness, Conservative)

I am extremely grateful to the Minister for being so generous in giving way. Can he share with the House a single report commissioned by this Government, who are now in their 12th year in office, that has been damning of Ministers?

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

I shall move on to new clause 11. The new clause also raises the question of parliamentary scrutiny, but it is also superfluous because its measures already exist in the Bill. Paragraph 7 of schedule 4 requires the chief executive of Skills Funding to publish an annual report and accounts covering expenditure on all areas, including capital. That report will be laid before Parliament. I hope that that, together with the commitment of my right hon. Friend the Secretary of State to return to the House with a statement in due course, will give Members some reassurance about the level of parliamentary scrutiny. If Mr. Hayes wants to have a debate in Government time, he will, as he knows, need to come back on a Thursday and talk to the Leader of the House rather than me—my pay grade is considerably beneath considering such matters.

We do not need new clause 11 in order to have transparency and parliamentary accountability, and we do not need new clause 1 in order to have good information about the state of the FE estate.

Let me turn to the general points that Members have made. The hon. Members for South Holland and The Deepings and for Bristol, West (Stephen Williams) raised the question of colleges that have not received, but have applied for, approval in principle. There are currently 79 colleges that have received approval in principle and 65 that have applied for it and have not received it. The points they make about the great amount of work—and potentially of expenditure, as well as of investment of time and energy—that will have gone into reaching the stage of submitting the application, which is itself a huge, thick pile of documents, are very well understood. We have been very clear in our discussions with the new leadership of the LSC that the colleges in that position will be treated broadly in a single pool with the colleges that have already received approval in principle. All of them will be deemed to have a difficulty which the LSC, under its new leadership, needs to help them to deal with.

Several Members—the hon. Members for Bristol, West and for Isle of Wight come to mind—mentioned the £300 million of new cash that was announced in this financial year to enable us to put through some of the most urgent and high-priority cases. The hon. Member for Isle of Wight said that it glossed over the entire issue—I believe that the rich phrase he used was that it was a "sticking plaster on a disembowelment"—whereas the hon. Member for Bristol, West said that it was a political scorched-earth policy. Naturally, I cannot accept any of those colourful descriptions. None the less I am clear about the fact that £300 million will not solve this problem, whose magnitude is much greater. I am not attempting to gloss over the entire issue, and I do not pretend to have solved the problem or put the matter to bed with £300 million. What the £300 million will enable us to do is to put forward, this year, in decisions that will be made in a few weeks' time—in the early summer—the most urgent and high-priority cases across the country. That will still leave many colleges needing certainty and clarity about their future.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

Interestingly, the Minister, at last, gives us some detail about this matter, for which I am grateful. We should have been given more detail sooner, but I understand the reasons why he has not been in a position to do that; as he says, this is not at his pay grade level. Will he tell us whether those high-priority cases will be drawn from colleges that have already received agreement in principle and colleges that are at an earlier stage of development? If not, what criteria will be used?

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

As ever in this evening's debate, the hon. Gentleman congratulates himself on having extracted from me something that has been clear and on the record for weeks, if not months, and that I have said dozens, if not hundreds, of times. As I just said, the colleges that have received approval in principle and those that have applied for it but not necessarily received it will all be viewed in the same group when consideration is given to both the urgent and high-priority funding and the later down the line funding. It is probable that colleges that have applied earlier and secured approval in principle are more likely to be further down the road, and I would be surprised if more of them were not more urgent and high-priority immediate cases when compared with those that have yet to receive approval in principle. However, it is clear, and has been for some time, that both those categories will be eligible to be considered for the urgent and high-priority immediate funding, and to go into the second pool of cases that will go through the same process of prioritisation.

As for how those priorities were drawn up, as I am sure the hon. Gentleman knows—I am loth to say this, because I know that he will intervene in any moment to rejoice at having dragged this out of me, although it has also been clear for some time—the LSC, in partnership with the Association of Colleges, set up a reference panel and, between them, they have agreed, or are in the process of finalising within the next week or two, a set of criteria and processes that are to be open and transparent, and that I hope the whole sector can buy into, by which the prioritisations will be decided. The first criteria will be readiness, urgency and whether the case is high priority. In the second round, the same criteria will apply, but without the criterion of readiness.

Hon. Members have also mentioned the amount of money already committed in preparing bids. That is a problem for colleges and it is an issue about which college principals and corporation leaders feel worried and exposed. I am sensitive to that, and we have made it clear to the LSC that it will need to be sensitive to the difficulties in which its mismanagement of this programme has put college leaderships. It has retained an independent firm of property consultants, who are currently consulting all the affected colleges with a view to reporting back to them what level of support they could individually expect; again, that will take place within the next few weeks.

I could go on talking about these matters indefinitely, but I am conscious of the fact that other hon. Members wish to discuss this new clause and others, and that the hon. Member for South Holland and The Deepings has to follow me so this matter is by no means close to conclusion. I am sympathetic to the desires of hon. Members to have a wide-ranging debate about this matter and I have tried to address some of the main issues in the time available, but I do not think it is appropriate for me to go on talking indefinitely. I am sympathetic to the intentions of new clauses 1 and 11, but both of them are dealt with in the Bill or within existing practice and are, therefore, superfluous. On that basis, I know that the hon. Gentleman, with his customary sagacity and courtesy, will be inclined not to press the new clauses to a Division.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

The Minister has done his best to deal both with these new clauses and with the crisis that is not entirely of his making, given that he is a newcomer to his Department. He will understand why Conservative Members and, indeed, Members from across the House, are so exercised about this capital funding crisis. Joseph Conrad said that "reality beats fiction out of sight", and nobody could have made this up, could they? This is stranger than fiction. The Minister first says that colleges might be allowed to go bankrupt and then says that they will not be able to do so.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

rose—

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

I shall give way to the Minister, although I was in the middle of my exciting peroration.

Siôn Simon (Parliamentary Under-Secretary, Department for Innovation, Universities and Skills; Birmingham, Erdington, Labour)

I hate to interrupt the hon. Gentleman's peroration, but I should say that I never said that colleges might be allowed to go bankrupt—not on the "Today" programme or anywhere else.

John Hayes (Shadow Minister, Innovation, Universities and Skills; South Holland and The Deepings, Conservative)

What the hon. Gentleman said on the "Today" programme, on blogs and on Twitter is probably not worth dwelling on now because to do so would not be in his interests or those of the House. We certainly know that Sir Andrew Foster, who was asked by the Government to look into these matters because they were so concerned about where things had got to, concluded in his report on the crisis that it had been "predictable and probably avoidable". We know that 79 of the colleges that have had their capital bids frozen had already received agreement in principle and were simply awaiting agreement in detail, and we know that the £300 million that the Government have committed will not do the job.

These new clauses are as clear as crystal. They would help a Government to ensure that the circumstances in which this Government find themselves would be most unlikely to occur—I shall not say impossible, because incompetence can reign regardless of law. However, law must at least be in place to mitigate the results of the sort of incompetence, miscommunication, failure to act and lack of accountability that lay at the heart of this crisis.

We propose in our amendments that the House receive reports, with properly collected information from across the country, that match the state of the college estate to the bids for capital funding. It is remarkable that the Minister says that that information is already collected. He says that the Government have all the knowledge that they need about the state of FE colleges and the level of resources they enjoy. My goodness, if they have all that information but do not match it to bids for capital funding, what sort of organisation is the Learning and Skills Council and what sort of Ministers have we had who have not held that body to account? After all, it is a Government agency and there must be some sort of line of report, even if the Minister was not himself in office at the time.

It is essential for the good of our colleges that we avoid similar crises in the future. It is essential for good governance that we have the right information, and it is certainly essential for the further education and training needs and skills that our people deserve that we have better Ministers. I wish to press new clause 1 to a Division because I want to test the House's opinion on whether this sort of thing is excusable or whether it thinks, as I do, that it is unforgivable.