I thank you, Mr. Williams, and Mr. Speaker for the opportunity to raise this important subject in an Adjournment debate. I thank the Under-Secretary of State for Innovation, Universities and Skills, the hon. Member for Birmingham, Erdington (Mr. Simon) for being here to provide further illumination.

I am sorry to have to stand here today to represent two colleges in my constituency that I have visited on many occasions while representing the Cotswolds. The first is the National Star college, which the Minister visited recently. Under its principal, Helen Sexton, it is the leading national provider of specialist education for severely disabled people. The Minister knows, but others may not, that it provides magnificent residential training for disabled people who can do virtually nothing, but who emerge from a residential course at the college able to live a largely independent life and to hold down a job.

Yesterday, the Minister presented the college with an Association of Colleges beacon award for its innovation. I am sure that the college would welcome a visit from the Secretary of State, so that it can demonstrate its work to him. The dedicated and talented staff provide opportunities and assistance for those with disabilities. They are a lifeline for students and their families.

The second college, Cirencester college, remains one of the most popular choices for over-16s in my constituency. It is a beacon college and the principal, Nigel Robbins, is rightly proud of the consistently excellent performance of his staff and students. The college was rated outstanding by Ofsted in the most recent inspection and for the past three years has topped the national league tables for tertiary and general further education colleges for level 3 students.

I hope that I have made clear the esteem in which I hold both colleges. I was therefore disturbed to hear of the delay in capital funding for colleges announced by the Learning and Skills Council, because it will affect both institutions. That is the reason for this debate. I know that colleagues have experienced similar problems with colleges in their constituencies and they may wish to intervene to give some of the details. In the debate on skills and further education in the main Chamber on 3 February, many hon. Members mentioned how the announcement has affected colleges in their constituencies. I welcome this opportunity to mention the colleges in mine.

The National Star college was the first independent specialist college in the Cotswolds to secure a groundbreaking 50 per cent. capital support from an application to the LSC for principal status in 2006. The funding was for its development programme to secure first-class resources and accommodation for specialist education for young people and adults with disabilities.

In 2007, I was invited, as the vice-president of the college, to open student accommodation built at a cost of about £1 million as part of phase 1 of the development. According to the principal, that development has enabled severely disabled students who had previously been totally reliant on personal support to develop skills to use specialist technology that allows them to open and close doors, windows and curtains and to switch on lights and televisions. When I visited the college, I saw a disabled student who was able to drive a wheelchair merely using eye movement. That is the type of technology that that college and others up and down the country deploy to help severely disabled people.

Being in control of their environment for the first time in their lives leads to a growth in confidence and a sense of achievement for severely disabled people, which increases their motivation, enhances their quality of life and advances their belief in their own skills and abilities. Consequently, many seek employment with the help of the college. Many of my constituents are generous in adapting their workplaces so that such people can gain employment.

Phase 2 of the development is near completion, with £3 million of investment enabling infrastructure development, the introduction of biomass sustainable heating, a new access road, car parking and an improvement in the student accommodation. However, phases 3 and 4 have been affected by the announcement of the delay in funding. About £700,000 has been spent in readying those phases for approval in detail. Work should have started on site immediately and completion is due in early 2010.

Phases 3 and 4 are the most substantive phases of the development and will provide about £10.5 million of specialist education and therapy facilities and residential student accommodation. A new community and work-related learning centre will provide enhanced opportunities for the development of work-based skills. The new therapy centre—the hub of the college—will build on the college’s exemplary practice. Its highly successful multi-disciplinary approach is recognised as outstanding by Ofsted. I pay tribute to the excellent staff at the Star college, who are exemplars for everybody. Their patience with the students is amazing to watch.

The funding delay has serious consequences for the Star college. Contractors have undergone extensive tender submission processes, and the college’s supporting teams of consultants have been placed on hold until a revised funding approval process is established for the LSC.

The college has raised two serious concerns about the implications of the LSC announcement. Delay to the completion of the project in the following academic year will result in the college’s resources being reduced, which will affect its leading specialist provision and its delivery of the national learning for living and work strategy for learners with learning difficulties and disabilities. Furthermore, the development is unlikely to be in place before the college’s next full Ofsted inspection. Anybody who has heard what the college can do for the most disadvantaged students will think it a national scandal if its improvement is delayed, postponed or cancelled.

In recent years, no organisations have done more than FE colleges to tackle disadvantage and to provide opportunity for all. They are the great unsung successes of our education sector and provide perhaps the best value for money in that sector.

The move of the East Riding college to the centre of Beverley will play a major role in the regeneration of the town. It is important to continue to provide opportunity, not least to those who have not had a great deal of it. Any danger of a spending freeze from the Government will impact greatly on Beverley.

I concur with my hon. Friend’s remarks. The role of FE colleges is critical to the future of this country. As shadow trade spokesman, I recognise that adding value to people’s intellectual skills, so that they can be applied in the rest of the world, is of paramount importance to our economic future and vital to the fulfilment of employment.

My hon. Friend intervened at a good point because I now move on to Cirencester college, the second college in my constituency that has been affected by the LSC decision. It expected to hear of the decision on the application in principle in March this year. An almost complete rebuild of the college was planned, eventually costing about £80 million. The first phase is an important part of that. To back up what my hon. Friend said, in the past year the college has seen its student numbers increase by 22 per cent.; they are drawn by the high standards set by the college. That demonstrates how popular and successful the college is. People enjoy going there.

So far, the college has spent £500,000 on preparatory work to get the process under way—for example, by employing architects, designers and consultants. As the downturn worsens, the capacity of colleges to deal with such financial shocks will be reduced greatly. The work is essential to accommodate the growing enrolment figures, while providing the facilities to ensure that the high standards of educational and personal achievement are maintained.

Furthermore, the college desperately needs engineering, construction and land-based training facilities to prepare for the introduction of the diploma entitlement and for its collaborative work with local schools to provide pre-vocational training and vocational skills for 14 and 15-year-old pupils, for whom there are no such dedicated provisions in the locality. Everybody, probably including Ministers, recognises that not everyone can undertake an academic qualification; vocational qualifications for those not able to do so are critical.

That and the fact that, as I mentioned, the college has for the past three years topped the national league tables for tertiary and general further education for level 3 studies fits perfectly with the words of the Building Schools for the Future document, which was issued by the Minister’s Department. That document states:

“The necessary capital support will be prioritised to enable high-performing FE colleges”

—such as the one mentioned by my hon. Friend the Member for Beverley and Holderness (Mr. Stuart)—

“and school sixth forms to expand their provision, to fund the outcomes of 16-19 competitions, and to support new policies (such as extending compulsory participation in education or training to 18) as they are introduced.”

That is a worthy ideal, and I hope that the announcements will not undermine it.

Until the announcement of the delay, Cirencester college could have expected at least half of the £500,000 expenditure to be covered by the Learning and Skills Council. As it stands, the college may have to cover all of those costs using its revenue budget. That would place a severe hole in its budget, yet it was encouraged to go down that feasibility route by the LSC on the expectation that the application would be approved. I am sure that the Minister will know that the Association of Colleges believes that his Department and the LSC do not fully understand the scale of the effects of the delays.

I have referred to the two colleges in my constituency, but we are all aware that the delays have caused problems nationwide. The Association of Colleges believes the effects will be felt directly or indirectly by more than 100 colleges throughout the country.

rose—

Several of my hon. Friends are here today to mention the problems in their own constituencies.

My hon. Friend is making a most convincing case on behalf of the colleges in his constituency. Lawrence Vincent, the principal of Bournemouth and Poole college, has contacted me about a proposed £70 million project. He says that proposed redevelopment has been “sequenced” and that the college has received an application in principle, but that it is waiting for the application in detail, which has been delayed. The college is a vital part of the local economy, and it does great and good work. We need a decision from the Government on when the capital expenditure will be approved.

The real problem is that colleges were encouraged to come forward with such schemes in the expectation that the money would be available and the schemes would be approved, only now to be left in limbo. It is incumbent on the Minister to at least clear up the situation and say clearly whether those colleges are likely to receive the money, so that they will know how to proceed. I entirely agree with my hon. Friend.

My hon. Friends and I are concerned that a number of further education colleges are in limbo. The Isle of Wight college, whose principal is Debbie Lavin, deferred major building works from last year to this. The college is not being told by the Learning and Skills Council at national level whether it is able to get on with the work or whether it must defer it again. The regional LSC office is trying to achieve clarity, but apparently no information is available. Will the Minister let us know when the college will be told what is happening?

My hon. Friend echoes what I have been saying. The colleges need certainty, whatever the decision. I hope that the Minister will be able to provide that today.

Those colleges that were due to begin construction immediately face a number of grave financial concerns. They include the cost of extending time-limited tenders; the cost of re-tendering; the complications arising from property transactions; and the bank costs incurred. Those colleges whose projects are still in the planning stage now have to choose between paying for advisers out of their own pocket—as Cirencester college will—or releasing people and putting an indeterminate delay on their development projects. That is why we need certainty.

How did the situation develop? Last week, the Secretary of State stated that

“in some cases, unrealistic expectations have been allowed to develop or have been encouraged, which is unacceptable.”

He was correct to describe that as unacceptable, because as we have heard it has caused a number of problems. He also said:

“Some colleges that have anticipated early approval will be disappointed. Priorities will have to be set and hard decisions will have to be taken.”—[Official Report, 3 February 2009; Vol. 487, c. 719.]

The tone of those statements causes further concern. I am sure that all those colleges would like to be informed how the priorities will be set and who will set them. Above all, I hope that the Minister will assure us of the transparency of the process, a factor that will be truly essential because there is a suspicion that the criteria will be altered so that the projects have to demonstrate employment skills and regeneration aspects. We might agree with employment and skills being included in the criteria, but regeneration? Is that the purpose of further education? Surely it is about educating the people of this country in order to get the best possible skills.

During the same debate, the Secretary of State was asked by my hon. Friend the Member for Havant (Mr. Willetts) if he could

“add a bit more information about the number of colleges whose plans are ‘in the pipeline’ and on the value of those projects”.—[Official Report, 3 February 2009; Vol. 487, c. 719.]

At the time, the Secretary of State was unable to provide an answer. I hope that the Minister and his Department have done some work since then so that we can have a little more clarity on the numbers, the types of projects involved and their value. If he cannot do so today, I would be grateful if he put more information in the Library.

Questions must be asked about how the change was announced. The decision was made on 17 December 2008, yet the announcement was not properly communicated to colleges until 16 January. Perhaps we shall hear more today. When exactly will the final announcements be made? What progress has already been made in assessing the applications since the moratorium was announced? Can the Minister give us any indication of what will happen to the two colleges in my constituency?

I hope that the Minister will fully recognise the appalling discrepancy between the encouragement that the Government offered colleges to develop and the capacity actively to support that development financially. The realisation that the discrepancy existed has let down education institutions across the country, leading to confusion and possible financial loss. The problem cannot have occurred overnight, and the Minister’s Department must have had close communication with the LSC on the programme. Why then did his Department allow the situation develop to the confused state that it is in now? I look forward to hearing some answers from the Minister.

I congratulate the hon. Member for Cotswold (Mr. Clifton-Brown) on securing this debate, and on having the privilege of representing two outstanding colleges. As he said, yesterday I awarded an Association of Colleges beacon award to National Star college. As it happens, I also awarded beacon status to Coleg Menai. Both are outstanding institutions. As the hon. Gentleman said, Cirencester college is consistently graded as outstanding by Ofsted. I am sure that he is proud of their achievements.

The matter raised by the hon. Gentleman is one on which I have received many representations from hon. Members. Indeed, more Members have intervened in today’s debate than is customary. I shall therefore endeavour to do what the hon. Gentleman asks and restate some of the basic facts on where we are and where we are going.

The position is pretty simple. Before 1997, there was no distinct capital budget for further education colleges. The capital budget was nil. That is why the FE estate was in such an appalling state of disrepair and why we set in train the ambitious Building Colleges for the Future project. By 2007, we had spent £2.4 billion building some fantastic colleges, and over the next three years—the period of the current comprehensive spending review—we are scheduled to spend another £2.3 billion.

I stress that that figure has not changed, and is the same as that announced in the comprehensive spending review, except that in response to the Chancellor’s desire to accelerate capital infrastructure projects, we brought forward into this year and next year £210 million from three years’ time—£110 million and £100 million respectively. In that sense, the capital programme has been accelerated. It has not been frozen, stopped, cut or anything of the sort. More further education building projects are taking place than ever before. Since the programme began, nearly 700 projects at 330 colleges have been agreed, and only 42 colleges in the country have not yet benefited from investment. Likewise, it is important to stress that the position of the 253 colleges that have received approval in detail at all stages and have begun building has not changed. All those colleges are unaffected.

The problem is partly a result of the downturn. Many of the deals put together by colleges to finance their building programmes rely on land sales, some of which have been jeopardised or have fallen through because of the downturn. Almost all of them rely on a bank loan, but the ability of some people to meet the conditions of those loans has been altered by the downturn. As hon. Members have said, and as the Secretary of State and I said in the debate last week, the pace of demand has increased rapidly over the past year. Nationally, colleges’ expectations, and the likely effect of that demand, were not managed as they should have been, and the current situation is unacceptable.

In last week’s debate, my right hon. Friend apologised, and I am happy to add my apology now for our having got into a situation in which, as hon. Members have said, people’s expectations have become out of step with the size of the capital budget, even though it is very large and indeed has grown slightly. The most important thing is that the situation be resolved as quickly as possible, as we are determined it should be. My right hon. Friend agreed with the LSC to appoint Sir Andrew Foster to undertake an independent review of how the problems arose, and we expect the LSC to set out the position in more detail and to give us a clearer idea of the way forward following its council meeting in early March.

I shall turn to the specific questions concerning the constituency of the hon. Member for Cotswold. As I understand it, in July 2006, National Star college was granted in-principle approval for its development programme, which includes the re-development of the college’s main campus at Ullenwood with a variety of new build and refurbished accommodation. The estimated cost of development is £15.393 million, with LSC support of £7.697 million. Phases 1 and 2 have been completed and phases 3 and 4 are awaiting approval in detail. The college is not the only one in the country with such a structure—a single in-principle approval followed by in-detail approvals for each phase of the application and planning process. Ultimately, the LSC must manage every case at local and regional level. In partnership with local colleges, the local LSC should go through the plans to get a sense of the entire picture regionally and, thereby, nationally. By that process, it should find a way forward by readjusting plans where necessary, but always to the minimal extent possible, while to the maximum extent possible helping people to do what they originally wanted to do, in broadly the way that they wanted to do it, and hopefully in their desired time frame.

As I said, that structure is not unique to National Star college, and I have spoken to several others about the matter. It is for the LSC to manage the situation, and not for me to second-guess the detail of the solution. However, such projects have particular pressures, of which I am convinced and have been apprising the LSC. All the evidence is that the council is sensitive and sympathetic to the particular pressures of such projects and is doing everything possible to help people remain as close as possible to their original time frames and budgets.

I thank the Minister for responding to my debate very reasonably. Two things occurred to me during his reply: first, he said that he wanted to bring forward £210 million to advance these construction projects, yet the whole re-evaluation process started on 16 December seems to be doing exactly the opposite and providing a great deal of uncertainty; secondly, the National Star college was part of a package, and I do not think that it would have so embarked on phases 1 and 2 had it known that it might not be able to develop phases 3 and 4. Importantly, the college is a national not a local provision college, so I do not understand how the local or regional LSC will make the evaluation. Surely evaluation of the provision of disabled residential facilities must be made on a national basis.

I shall try to answer those three points quickly, because we are running out of time. I understand the hon. Gentleman’s third point. I could be wrong, but as I understand the structure of the LSC, even though the provision is national, the building is regional. These are capital projects being managed—I would have thought—by the regional LSC. On his first point, we have brought forward the capital to the next two years of the CSR period not in response to the current situation; it was being brought forward anyway in response to the economic situation, as part of the broader move across Government to try to accelerate capital infrastructure projects. Far from shrinking or stopping the scheme, it is being slightly expanded and accelerated. The difficulty is that expectations have run ahead of the size of the capital budget, even though it is very large and growing.

The hon. Gentleman said that Cirencester college was expecting its application approval in March. According to my information, the college was expecting to submit an in-principle application in April. It has now decided not to proceed according to that time frame, but to defer until it has a better idea of what is going on. It has committed expenditure and is discussing its early plans with the LSC, but that is not being done formally, and nothing is yet in the system or pipeline. It has not yet even applied for any kind of approval.

Perhaps the best way to deal with the matter is by correspondence. We could have a word later.

Perhaps that is a good opportunity—

Order