Learning and Skills Council

Oral Answers to Questions — Innovation, Universities and Skills – in the House of Commons at 10:30 am on 30th April 2009.

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Photo of Stephen Hepburn Stephen Hepburn Labour, Jarrow 10:30 am, 30th April 2009

What recent representations he has received on the review of the Learning and Skills Council's capital funding programme; and if he will make a statement.

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Photo of John Denham John Denham Secretary of State for Innovation, Universities and Skills

As the House would imagine, I have received many representations about the LSC capital programme, and I have endeavoured to keep the House informed about it. I am grateful to Sir Andrew Foster for setting out clearly how, despite record investment in FE capital programmes, the LSC capital programme came to be over-committed.

In the Budget, we announced an additional £300 million of capital funding for the current spending review. This will enable a limited number of projects to start soon. The LSC is now working with the Association of Colleges, the wider FE sector and my Department to agree the criteria for prioritising the projects that are the most urgent and of the greatest need.

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Photo of Stephen Hepburn Stephen Hepburn Labour, Jarrow

Does the Minister agree that the decision on which colleges should be given the go-ahead should be based on need and not on who jumped the gun like in some wild west land grab? If so, does he agree that youth unemployment should be a major factor in assessing need? South Tyneside has more than 2,000 young people unemployed, so should it not be top priority?

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Photo of John Denham John Denham Secretary of State for Innovation, Universities and Skills

My hon. Friend makes an important point. It is vital that the prioritisation reflects real need, value for money and the impact of the investment that is proposed in a college. My hon. Friend is a strong advocate for South Tyneside college, and I commend him for it. As my hon. Friend the Under-Secretary has said, we cannot and should not prejudge the decisions that the LSC will take, but they must be taken according to criteria that are seen to be fair, transparent and right.

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Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

I am grateful to the Secretary of State for his letter and to the Minister for agreeing to meet me next week along with the principal of National Star college. We hope to establish that the college is one of the most deserving cases as it works entirely with young people with extreme physical disabilities and is half way through the capital transformation of its campus. If the additional funding that is being provided is taken from subsequent years' budgets, will we not be solving some of the problem this year, but creating further problems in future years?

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Photo of John Denham John Denham Secretary of State for Innovation, Universities and Skills

The Budget settlement has two elements that are important in bringing certainty and clarity, or as much certainty and clarity as we can, to the current situation. The first is that we have an additional £300 million to spend in this comprehensive spending review, so far as possible front-loaded towards the coming months rather than the latter end of the CSR. The second is the ability to plan into the next CSR at an indicative target of at least £300 million, which gives us the ability to look not just at the work that can be carried out in the next two years, but at how the programme beyond that can develop. By doing that, we hope that we can bring the greatest certainty and clarity to as many schemes as possible, not just in the next couple of years but in the years beyond that.

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Photo of George Young George Young Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee

Where the LSC has agreed to a merger between two colleges, as has happened with Sparsholt college and the former Cricklade college in my constituency, and part of the deal was agreement to substantial capital investment on both campuses to deliver the benefits of the merger, can the Secretary of State confirm that those circumstances will have a high priority in deciding which schemes will go ahead?

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Photo of John Denham John Denham Secretary of State for Innovation, Universities and Skills

I do not think that I should go further than what I said in my answer about the need for the criteria set out by the LSC to be fair and transparent and to produce the right educational priorities. Every right hon. and hon. Member can clearly argue for the priority that would most fit their case, but my comment is that we should have, so far as possible, a set of criteria that people would think fair. As Sir Andrew Foster set out, we are in a position where expectations were raised in a much larger number of colleges than could be met, albeit with the record expenditure of £2.3 billion that we have. [ Interruption. ] That is set out in Sir Andrew Foster's report.

This is clearly a failure of the implementation of a good policy, and it is clearly something for which the former chief executive of LSC took responsibility. The report also sets out clearly Ministers' role—or, indeed, lack of role—and the lack of information to Ministers as that situation developed. I now have to try to manage the situation in a way that is as fair as possible to the largest number of colleges. That is the commitment that I can make, but I remind Mr. Evennett, who intervened from a sedentary position, that his colleague, Mr. Willetts, went to the Association of Colleges conference last year and said that no one could rely on a Conservative Government even to maintain the then planned expenditure for 2010-11. So there is a huge question mark over the Conservative party's commitment to FE capital, as there was in the past.

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Photo of David Evennett David Evennett Shadow Minister (Business, Innovation and Skills)

The Foster report on the Government's mismanagement of the Building Colleges for the Future programme states that the crisis is both predictable and probably avoidable. Colleges across the country are suffering at present, and many plans have had to be suspended. Concerns about the project were raised as long ago as February 2008. The Secretary of State's Department was represented at subsequent meetings where those concerns were repeated. As his officials knew of an impending crisis, why did he not do something about it sooner? Is he not ashamed of the shambles surrounding the programme?

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Photo of John Denham John Denham Secretary of State for Innovation, Universities and Skills

The Foster report sets out very clearly where responsibility lies, and as the hon. Gentleman says, it sets out missed opportunities in the LSC to bring the issue to a head and to resolve it. We have accepted the conclusions and recommendations of the Foster report. It is a matter of fact and of record, which was accepted by Sir Andrew, that Ministers were not informed of the scale, nature and, indeed, existence of the problem until the last two months of last year, by which time all the decisions that had contributed to the current problem had been already taken. One of Sir Andrew's recommendations was that my Department should look at the relationship and accountabilities between my civil servants and the non-departmental public bodies for which we are responsible. In part of my response to Sir Andrew Foster's report, I asked the permanent secretary of my Department to review all our relationships with our non-departmental public bodies, so that there is no ambiguity or uncertainty about the responsibilities and accountability of officials who have relationships with those bodies. I think that that was the right response for me to make to Sir Andrew's report.

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