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For some reason this debate seems to be of great interest to many people.

My object in this debate is to be constructive. If the object were to slate the Government, castigate the Learning and Skills Council or embarrass the Minister, it would, frankly, be like shooting fish in a barrel, because the facts are extraordinarily stark: at 79 colleges, fully costed projects with planning permission are now stuck; only eight have been given the go-ahead, and 71 are in limbo; a further 65 colleges await the results of deliberations; £5.7 billion has been promised but only £2.3 billion is actually available; and there are enormous costs because of delays. According to the BBC, the situation is costing colleges across the country £151 million, and there are some classic examples of what are, frankly, awful problems.

The hon. Member for Barnsley, East and Mexborough (Jeff Ennis) has drawn to my attention to the situation at Barnsley college, where builders have just left the site. The college is almost in a state of insolvency, and is severely exposed financially and in every other way. It is a visible example of a failing system.

The hon. Gentleman is well aware of Blackpool’s regeneration plans, so he will also be aware that when Blackpool did not get the resort casino that it wanted, it looked to regeneration in other ways. The relocation of the college site is key to Blackpool’s regeneration. Does he agree that plans such as that one, which are strategically important, should be at the top of the LSC’s priorities?

I do agree, and I cite the example of my own college, where £2 million has already been invested by the college with a full application in principle. It is in a terrible situation because it does not know whether to go ahead with what it planned to do, or to restore existing and wholly inadequate buildings.

However, the object of the debate is not to lay blame. That is far too easy a task. The object is to analyse where we are now and to hear how the problems will be solved, particularly the latter. I hope that the Minister will use all his time to do the latter. We do not want to hear him read out the achievements of the scheme, thereby taking precious minutes away from explaining what will be done to get us out of this pickle. Therefore, to save him a bit of time, I shall read out some of the achievements of the scheme.

A lot of money—£2.9 billion—has been promised. According to the press release from the Department for Innovation, Universities and Skills, a work force of approximately 10,000 has been employed on college sites in 2008 and 2009, and one in 20 of the work force are apprentices. Much good and worthy stuff has been achieved.

I am sad to say that with all the talk about apprentices—the press release came out on a propitious day—in the industrial press, when the 10,000 construction jobs were mentioned, there was an announcement that contractors on the projects were ordered to cut prices or lose jobs.

So that is where we are. We are in a desperate situation, and we need to concentrate on solutions. A review is not a solution. The Labour party seems to have a succession of grandees lined up for occasions such as this, rather like cabs at a taxi rank. They are scheduled to appear when things go wrong and to conduct a review, but that would be wholly inappropriate in this case, such is the seriousness of the situation. It would be like an AA man going to someone who had broken down on the motorway and giving them a book on the history of motoring. That is not what is required.

I congratulate my hon. Friend on picking such an important topic for this debate. Before he moves on, as he rightly will, to the solutions to the problem, will he acknowledge that the figures so far published by the LSC and the Government actually understate the scale of the crisis? They exclude colleges such as Yeovil college in my constituency, which has been liaising with the LSC about a scheme for a long time. It has not yet reached the stage where it is captured in the Government’s statistics, but a great deal of public money has been invested in the consultants who are necessary before application in principle and in detail can be submitted.

I agree with and endorse what my hon. Friend says. However, he said that I would move on to the solutions. Oh that we had solutions. They are not at all apparent or obvious at present.

What we do not want is Ministers expressing sympathy or joining in to dish out blame. That has happened so far in public and private discussions on the matter. After all, the LSC is a Government quango. It does not spend billions without the Government’s knowing, monitoring or checking what is going on—at least one hopes not. The board members are not sent off like little lads with pocket money to spend a few billion here and there. Someone—possibly not the Minister, who may not be to blame—watched this mess evolve. They clocked the agreements in principle, they watched the progress through the various stages of the various schemes, they saw what sums were being committed—that is apparent from the freedom of information requests made by Conservative Front-Bench Members—they knew all along what was in the kitty, they knew what was promised, and, presumably, they had some numeracy skills. The Minister cannot simply say, “Me, too. I, too, deplore the situation”, because if he does not have something to answer for, his Department does.

I acknowledge that some enthusiastic salesmen have been involved in the scheme. That was certainly true across the piece and in many parts of the country. There is evidence that people have talked up schemes. They said to schools, “You don’t want to do this, you want to do more. You don’t want simply to restore that building. You want to knock it down and build a completely new one.” They raised hopes and ambitions, and encouraged demolition and rebuild rather than restoration and repair, rather like sub-prime mortgage brokers talking someone into borrowing more than they actually need.

Does my hon. Friend agree that the experiences of my local college, Cornwall college, are probably matched in other areas of the country? It has several sites but only a relatively small number were desperately in need of improvement. However, it was encouraged by the LSC fully to review its entire site. It was not asked to prioritise. It was asked what its blue-skies thinking would be, and the result was a much more expensive bid.

I agree with my hon. Friend. There has been a great deal of blue-skies thinking. In my constituency, King George V college was persuaded to do more than it initially thought that it wanted to do—in fact, more than some of the staff and pupils wanted it to do. It was told that money was available and that it would be a better deal and a better long-term project.

Whatever happened, there is an audit trail that leads directly to the Department as well as to the LSC.

The Government must have seen this coming. They must have seen the problems developing, because exactly the same experience that we just heard of in Cornwall happened in Chesterfield. In autumn 2007, the college applied in principle for improvement and a £37 million partial rebuild. In 2008, the local area director from the LSC said to the principal, “You are not being ambitious enough. You will fall behind West Nottinghamshire college, which is going for a complete rebuild”—although the complete rebuild at West Nottinghamshire, which was due to start on Monday, has been stopped. The LSC encouraged Chesterfield college to go for a £107 million complete rebuild. It now has no idea whether anything at all will happen, and West Nottinghamshire college has already spent £7.5 million on building work that was due to start on Monday, but which has not started at all.

That situation is entirely replicated at KGV college in my constituency. It thought that work would start in February, but now it does not know whether it will start at all.

The Department cannot simply blame or dump on the LSC. We do not need to be told, as we were the other day in oral questions, that this incompetent quango—the LSC—will soon be replaced by a less obviously incompetent quango, the one to come. I genuinely would like to know who is actually on the LSC. Members can replicate this process for themselves: if they go to the LSC website to try to find out who, apart from the chief executive, belongs to it—the list of members and so on—they will find it extraordinarily difficult to drill into the website to get any names. I have a horrible suspicion that some of the same people may well appear on the successor body that is still to come.

Colleges do not need this. They do not need the Department to walk away from the problem, and they do not need a review as such. They need concrete and definite answers. They need to know whether the builders are ready, and when they can start. If not now, when? If that is uncertain, when will they know? It is a fair question. If a project has been agreed but is now deemed unaffordable, because some schemes were the result of blue-skies thinking and are probably not affordable, should the colleges resubmit them tailored to their needs? If so, what are the headline figures to which they will need to work, and what is the time scale? The time scale is very important. If a project has been agreed simply in principle, what chance does it have of being done? If completion is in doubt, should the college consider re-design or re-submission? None of those questions is answered in any shape or form for the colleges.

If an appreciable expense has been incurred—the figure of £150 million across the country has been put forward—and the project has been aborted, are any costs recoverable, likely to be reimbursed by the Department or legally pursuable through the courts? Colleges need real-time answers to real-time questions, and they need them quickly; they do not need reviews.

Does the hon. Gentleman agree that the clock is ticking for many colleges? Guildford college in my constituency has spent millions on the planning process, has planning permission and widespread local support and offers a wide range of vocational courses. However, its planning permission will expire in three years’ time, so we do not need a review; we need quick answers for the colleges that have invested such large sums of money.

We can be legitimately sceptical about the amount of building work that has taken place, particularly if we read the Government’s press release, which uses “estimated” all the time. Members will know that many places are on the cusp of building, and in Barnsley building has started and been stopped.

I congratulate the hon. Gentleman on calling this very important debate. May I add Oxford and Cherwell Valley college and Ruskin college in my constituency to the list of those that want positive news as quickly as possible? To do the constructive things that he talked about—when he eventually got round to his constructive points—will it not be necessary to raise the overall ceiling on capital allocation? The Conservatives are clearly not going to support that, but it would be entirely consistent with the contra-cyclical measures that are needed to increase public expenditure and combat the recession. It would be especially valuable, given the training and improvement in skills that those colleges provide, and the history of under-investment in what has been for far too long the Cinderella area of education.

The right hon. Gentleman makes a fair point, the intellectual coherence of which is in no doubt whatever.

I want to make the basic point, however, that, on building sites throughout the land, one might wait for cement, for subcontractors or for the weather to improve, but only in modern Britain does one need to wait for Sir Andrew Foster to complete his review before one goes any further. If we do wait a year or so, the situation will not be uncomplicated, because some plans will be subsumed under Building Schools for the Future, and the financial arrangements may be different. They may be private finance initiative arrangements, rather than the current capital approval arrangements, and another tale is attached to that.

I have had a foretaste of the process, because a few years ago a similar thing happened with another quango, the North West Development Agency, which had boldly gone down the route of agreeing things in principle, getting other people to produce matched funding and handing out schemes with largesse. Then, when somebody totted up how much money was in the kitty, the result was similar to that with the LSC. The agency went into a bunker, did not answer queries and simply did not know what had happened. It was a dreadful funk that took some time to sort out, and I genuinely struggle to believe that democratically elected bodies, transparent as they are, could do worse. The Minister is democratically elected, so perhaps he can tell us.

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Order. Before I call the next speaker, I must note that quite a number of right hon. and hon. Members wish to speak. I have no control over time but will do my very best, so I propose to commence the winding-up speeches at half-past 3. I ask Members to be as brief as possible.

Thank you, Mr. Benton. I promise to speak for seven or eight minutes.

I thank the hon. Member for Southport (Dr. Pugh) for his initiative in securing this timely debate, which I approach from two angles: first, as a member of the Public Accounts Committee, which received a positive report from the National Audit Office on the Building Colleges for the Future programme—and, I have to say, an even more upbeat account of its prospects from civil servants at a hearing in mid-November, which made the moratorium on new schemes announced just a few weeks later all the more surprising; and secondly, and more importantly, as a local MP with two campuses of Lambeth college in my constituency and, now, a major question mark over the future of the proposed new technology centre in Brixton.

The National Audit Office is quite right to be positive about the Building Colleges for the Future programme. So far, it has been one of the great success stories of this Labour Government. In 1997, there was no capital budget at all for further education colleges. Between 1997-98 and 2006-07, more than £2 billion was invested in modernising further education facilities, and a further £2.3 billion will be invested in capital projects in the sector in the current spending round up to 2010. In other words, by the end of the period, almost 700 projects in 330 colleges will have been funded by the programme. That is a remarkable achievement.

In Lambeth in my constituency, we have also been beneficiaries, with the excellent Clapham sixth-form centre, costing £21 million, on target and due for completion in May. However, the second phase of the college’s property strategy was the state-of-the-art technology centre at the heart of Brixton. The new centre—a marvellous design, by the way—would have housed world-class construction, engineering, electronics, media and computer-aided design facilities, and would have replaced the current provision that is housed in poor premises in Vauxhall and cannot cope with the demand for the employment skills that the college offers. The centre has been designed to meet a wide range of needs in the Government’s 14-to-19 and adult skills strategies.

Lambeth college has developed the centre in consultation with the local authority, the relevant sector skills councils, and major construction and engineering employers. It would have offered a large vocational skills training centre at the heart of Lambeth, in curriculum areas that are crucial to the regeneration of the local and regional economy; it would have directly addressed Lambeth’s disproportionate number of residents with no qualifications and its large number of those who are not in education, employment or training; it would have enabled stronger partnerships to develop with local secondary schools to increase delivery of engineering diplomas; and it would have encouraged growth in non-LSC-funded student numbers, because it would have provided a modern, high-quality and centrally located facility, attractive to employers, sector skills councils, higher education institutions and fee-paying students. That in turn would have helped the college’s bottom line and enabled it to focus even more resources on the front line.

As a result of January’s announcement of the LSC capital review, it appears that that wonderful and transformational opportunity at the centre of one of London’s poorest boroughs is now at risk. All design work on the new centre has been suspended and the professional team working on the project will have to be disbanded. Without the new centre, training in those subjects will be delivered at the Vauxhall and Brixton Hill sites, which are not fit for purpose; they are in poor condition and in urgent need of modernisation. So, in any circumstances, money will have to be spent sooner or later, and one asks, where is the economy in that?

Will the right hon. Gentleman give way on that point?

I shall, but I will not give way very often, because I am conscious that a large number of colleagues wish to speak, so I intend to be as brief as possible.

The construction work itself could be part of the stimulus to the economy at a time of recession, and, on the country’s ability to repay the bill, surely the very investment that the right hon. Gentleman describes in his area would be one of the best ways of doing that. Pound for pound, it would be far more effective than investment in the university sector. In my case, locally, North Devon college has spent more than £6 million and had hoped to get £75 million from the LSC, which was to be part of a wider package—the £200 million redevelopment of Barnstaple. Without that, I fear for the economy now and for our ability to pay back all the money and sort things out in the long run.

The hon. Gentleman makes an eloquent case and, although I do not wish to engage in invidious comparisons between educational sectors, echoes the words of my right hon. Friend the Member for Oxford, East (Mr. Smith). I am delighted to observe—as I am sure my hon. Friend the Minister will in due course—that substantial sums have been brought forward in the further education college building programme to contribute towards combating our current economic difficulties and to generate exactly those apprenticeships and jobs of which the hon. Member for North Devon (Nick Harvey) spoke. I am grateful for his intervention.

A more immediate financial issue faces Lambeth college. In its preparatory work at the Brixton technology centre, the college has spent a total of £1.8 million on consultants’ fees, on the feasibility study and on detailed design proposals for the application in principle for funding that was to be submitted to the Learning and Skills Council in January for a planning application to be submitted at the end of March. However, the college has received only £200,000 from the LSC, with the remaining £1.6 million funded from college reserves. If the project does not go ahead, the college faces the prospect of having to write off £1.6 million in aborted fees, which it can ill afford to do. There is another reason why the college can ill afford this loss. The Clapham sixth form has cost it £21 million, of which only £5 million has been paid for by the LSC. The balance has been funded by a long-term loan that is costing the college £900,000 a year to service.

As my hon. Friend the Minister will be aware, the LSC has required all colleges undertaking phased property strategies to make their entire financial contribution in the first phase, on the promise that subsequent phases of capital works will be funded fully by the LSC, with the servicing of the loans then being funded by efficiency savings generated by the modernisation of the whole estate. However, the current suspension of funding for Lambeth college means that it has only been able to implement a part of its property strategy, but is having to service a loan that assumes full implementation of the strategy. In other words, the college’s reserves have been utilised in developing the Brixton scheme on a promise that significant capital funds would be available. I emphasise that that has been done with the active encouragement of LSC officers. I say to my hon. Friend the Minister in all earnestness that if no funds become available, the college will have no means to modernise its remaining estate and will have to make budget cuts to pay for serving the loan, which will mean reducing the educational service that the college provides to the residents of one of London’s poorest boroughs.

I have listened carefully to the words of the Secretary of State and I believe that he intends to minimise the financial losses suffered by the colleges. I expect Lambeth college to receive the most sympathetic treatment possible. But the sensible decision would be to let the Brixton scheme go forward, and I shall tell the House why—because it is a London scheme. The National Audit Office report shows clearly that progress in renewing the further education colleges’ estate has been significantly slower in the London region than elsewhere in England. Only 32 per cent. of the infrastructure was renewed by 2008, in comparison with 50 per cent. nationwide, but that is not—emphatically not—because management in the London colleges has been slow or inadequate in any way. I probed that point repeatedly with officials when they came before the Public Accounts Committee on 17 November 2008 and was repeatedly told that the complexities of the London urban environment slowed the process down. Indeed, the NAO survey shows that the average length of time it takes nationally for a project approved in principle to be approved in detail is eight and a half months, but the average time for projects in London is 16.5 months, which is twice as long.

I leave this thought with my hon. Friend: beware of chopping off schemes because they are late in the programme, because I strongly suspect that that will have a disproportionate impact on London, where the need is great. The need is certainly great in Brixton and we would like our new technology centre.

It is a pleasure to follow the right hon. Member for Streatham (Keith Hill). He makes a powerful case for London. He is fortunate to have had some investment in his college from the LSC; many hon. Members are still awaiting the first tranche. I place on the record that 28 hon. Members are in Westminster Hall this afternoon—an almost record attendance displaying the strength of feeling about this subject.

I want to make two brief points. The first is generic. This episode demonstrates an abject failure in one of the core responsibilities of Government. Government is about determining priorities, getting the resources for those priorities and ensuring that they are effectively applied. All over the country, our constituents want better hospitals, schools, roads and railways, but we do not spend money working up schemes unless there is some prospect of funding them. This fiasco has revealed a heroic waste of money by encouraging schemes to be worked up for which the funding is not and never was available. Many will be abandoned and others will have to be redesigned.

That is made worse by two factors. This Government have told us that with the introduction of three-year capital programmes there will now be greater certainty about them, which was not there before. They have also told us that they are bringing forward capital programmes, for counter-cyclical reasons, from year three of the current public expenditure survey round to year one. The Homes and Communities Agency is bringing forward money from year three to year one for precisely that reason. Yet here the opposite is happening, with capital spending at best deferred and at worst cancelled. This is financial incompetence for which, at the end of the day, Ministers must take responsibility.

My second point is specific to my constituency, although features will be replicated elsewhere. Two years ago, Cricklade college in Andover merged with Sparsholt college. At the time of the merger, I got a letter from the LSC saying:

“Current thinking is that there will be a required investment of up to £30m in Andover and £20 million in Winchester”.

It went on to say that these figures were indicative at that stage but ended:

“I would wish to reiterate the LSC’s commitment to ensuring an appropriate level of investment is forthcoming to support the ambitions of the merged college.”

The scheme is now at £100 million, reflecting the substantial encouragement given by the LSC to build for the 21st century, with the LSC constantly urging the college to raise its sights. At one visit, an LSC officer told the college that he hoped it would knock down the main administrative building because it looked dreadful. That was not in the plan and it remains not in the plan.

The college submitted its application in principle last November, expecting approval in February or March. It has got planning consent for the project from Test Valley borough council. The scheme is an integral part of the regeneration of the centre of Andover and it plans to cater for the large number of NEETs in a growing town. Then, along with 143 other colleges, we were told at the beginning of the month that the deal is off. There is considerable anger in the town about how this has been handled.

There is now a revenue problem—picking up on what the right hon. Member for Streatham said—superimposed on the capital problem. Now the scheme is not going ahead, the auditors will not allow the college to capitalise the consultancy costs, totalling some £2 million. This means that the college will now turn in a deficit for the current year, which might allow the banks to allege breach of covenant and give them an opportunity to review the terms of any loan and fees for renegotiation.

I want two things from the Minister: first, a statement on the consultancy fees and some comfort—either reimbursement or an assurance that the fees can be capitalised because there will be a scheme; and secondly, an indication of what on earth happens next. My college would be happy to negotiate around a lower figure and to phase the scheme in over a longer period. What we cannot have is an indefinite stand-off.

I congratulate the hon. Member for Southport (Dr. Pugh) on securing this incredibly important debate. I begin on a positive note, as a Member from Barnsley, and congratulate the Government on their programme so far and for the many improvements that have been made to college estates throughout the country, including in Doncaster college, which serves my constituency. I mention in particular the new Hub building in the centre of Doncaster, near the North bridge, which is providing an excellent learning environment for students.

Although I do not want to make too much of a political point, under the Tories the capital allocation of funding for colleges stood at not one penny piece. I am sure that all Conservative Members feel suitably ashamed about that. Money has been and is being well spent on the college estate throughout the country, and it is making a difference. Indeed, last week, the LSC published research showing the positive effects of huge increases in capital expenditure on colleges’ performance. It found that, for every additional £1 million spent, a college attracts an average additional 111 learners, and a typical £10 million project improves a college’s success rate by nearly 1 percentage point, as it encourages more learners to complete their qualifications.

My main problem is Barnsley college, but before I refer specifically to its problems, I shall set the scene of Barnsley’s overall educational position. There is no doubt that it suffers from a legacy of under-achievement throughout its school estate with low staying-on rates and so on. That is a legacy of its past industries—the staple one was mining—and I could speak about that for more than half an hour, but I will not do so.

The problem has been recognised by Barnsley’s local businesses, schools and the local education authority—so much so that it led to the Remaking Learning in Barnsley project, which started a few years ago around the turn of the millennium. That led to the council closing all 14 secondary schools in the borough, apart from the grammar school in Penistone, and replacing them with nine advanced learning centres, which will provide an extended secondary school environment, not just for ordinary schoolchildren, but for adult learners. It is the biggest Building Schools for the Future programme in the country, with a capital value of more than £250 million. Yorkshire Forward has provided £20 million, and Barnsley council is dipping its hand in its pocket to the tune of £70 million, which shows how important the project is to Barnsley’s future.

It is difficult for an area such as Barnsley to regenerate itself, as I am sure you know, Mr. Benton, from your Merseyside experience. We are on the edge of two city regions—Leeds and Sheffield. In the current economic downturn, the number of claimants for jobseeker’s allowance in the past 12 months has risen by 85 per cent. in Barnsley, but by 61 per cent. throughout Yorkshire and Humber. The rise in Barnsley has been the greatest in Yorkshire and Humber. The town knows that it must adapt and develop to create new industries and a broader skills base throughout the borough, and that is exactly what Remaking Learning in Barnsley is all about. Barnsley college’s proposals are part and parcel of the borough’s vision and integral to the town’s future well-being.

I turn to Barnsley council, which has been in the media spotlight over the past few weeks. Barnsley college is the main provider of further education there, with 7,000 full-time students, including 800 A-level students who progress to universities throughout the country, 3,000 vocational students who progress to university or employment, 600 apprentices and 400 14 to 16-year-old learners. It provides opportunities and life chances to young people, adults and businesses. It also includes Train to Gain learners, work-based learning, tailor-made training and is an essential focus to help local people and businesses to gain skills employment and to prosper in the current climate. It is important to set the scene, so that the Minister has an idea of the impact that the current impasse will have if it is not resolved.

Barnsley college is a good case study, which is why the media have highlighted it. The college’s new build project was originally approved by the LSC in July 2007, 18 months ago, when the LSC expected the college to obtain planning permission, to design a first-class new building, to create temporary accommodation for staff and students and to demolish the existing main college building. Demolition is in progress, and the main college building will be totally demolished in the next few days. We are at the end of phase 1 and are about to start phase 2 of a three-phase scheme.

Detailed approval was scheduled for December 2008, but the LSC cancelled the meeting at the last moment and rescheduled it for January 2009. It never took place. The college has spent £12 million on the project, plus £1 million of funding from the LSC. That £12 million includes a £10 million bank loan, with the full knowledge and approval of the LSC. Barnsley college has completed what was required and expected by the LSC on time and on budget. We now expect the LSC to find the £50 million required for the new building on the main site. The alternative is for Barnsley college to be left as a building site, with redundancies for building contractors. Building was rescheduled to start in May 2009.

Barnsley college is successful and financially stable, but the current situation could put it at risk and make it technically insolvent. The Government have a legal duty to provide further education in Barnsley. The Foster inquiry is considering only how we got into this mess, not how to get out of it, and the fact that Mark Haysom has resigned this week provides a good indication of where the inquiry will points the finger.

The 7,000 students in Barnsley want to know how we will get out of the mess and resolve the problem, which is the main point that I and, I am sure, other hon. Members want the Minister to focus on. It is obvious that he cannot resolve it by trying to micro-manage his in-house budget. He will need outside assistance, and the only possible source is the Treasury. I want to know what discussions the Minister is having with Treasury Ministers and with the Association of Colleges. I am sure that he is aware that several colleges are considering the legal implications of the programmes being suspended, and I would like him to concentrate on that also.

In conclusion, the £55 million project is designed to contribute significantly to Remaking Learning in Barnsley. Barnsley college wants to improve students’ academic and vocational qualifications throughout the borough. In particular, we want to close the skills gap for the benefit of local businesses and inward investors. In short, Barnsley council wants to provide its people with the 21st century education and training facilities that it deserves. That is what the town deserves, and what we aim to deliver. The ball is in the Minister’s court.

It is a pleasure to have a few minutes—I shall try to make it a few minutes—to talk about the state of capital funding for further education colleges.

Three colleges serve my constituency: Bishop Burton college in my constituency, East Riding college, which is predominantly in Beverley and Bridlington in the constituency of my right hon. Friend the Member for East Yorkshire (Mr. Knight), and Hull college. Two of those colleges—East Riding and Hull colleges—have been affected by this fiasco. We have heard powerful speeches today showing the real effect on marginal communities and the most vulnerable people in those communities from the Government’s failure to deliver their promised programme.

Unfortunately, Hull often finds itself at the bottom of the national league table for educational performance up to GCSE, but Hull college is outstanding, and it was told to be ambitious, to think big and to have 21st century buildings fit for 21st-century learners. The LSC told it to be more ambitious. Was that an aberration? Was the LSC on autopilot? Did the chief executive have a fit of ambition with no link to the Department? It is incredible. The colleges in my area and I hope that the Minister today will put to rest where that ambitions programme came from.

Was the LSC responsible? Is that why the chief executive has gone? Or were things driven by the Department? Did it want that message sent out all over the country? Are the Department and the Minister—whether personally or in his capacity as a Minister—responsible for what now seem to be the false promises that were made to so many communities around the country?

Notwithstanding Labour Members’ understandable words of congratulation to the Government on their investment in FE over the years and the comparisons with the Tory years, the sad truth in this time of recession is that, for all the billions that have been spent, the number of young people who are NEETs—not in education, employment or training—is the same as when Labour came to power. Those 16, 17 and 18-year-olds are effectively washed up and do not see education and employment as offering them anything.

How much more important is it, therefore, to ensure that every penny that is spent on providing hope and opportunity to people in such a parlous situation actually reaches them. It is nothing short of a national scandal that a £10 million loan was made in Barnsley and that £1.6 million was spent in Streatham on consultants’ fees that might ultimately go completely to waste. It will not be enough to blame the LSC, which is the largest quango that this Labour Government have ever set up and which they are now seeking to abolish and to replace with not one body, but what, on closer inspection, looks more like three. That is the Government’s idea of streamlining. It is not enough to blame that quango—what we need from the Minister today is an honest statement of the Department’s role.

I turn now to East Riding college, which is perhaps more fortunate than some in many ways. This summer, it will have had support in principle for its funding for two years. As a result of the sale of its current site and moneys that it has raised independently, it is seeking funding of just £15 million for a completely new college in the centre of Beverley. That will take the college from the leafy suburbs—I live at the entrance to the current college, so I know from personal experience that it is narrow, dangerous and unsuitable—to the centre of Beverley. The new site will be close to the railway station and to where the new park-and-ride will be. It will also be close to the Swinemoor estate, which has many of its own issues and looks to the FE college to provide hope and promise. The project will cost £23 million or £24 million, and the LSC will be expected to fund just £15 million of that.

The college provides an increasingly good standard of education. At its last Ofsted inspection, it was graded good and it was improving in all areas. It hopes that it will be graded outstanding when it is next reviewed. It will serve isolated rural communities—the east riding is the largest single unitary authority area in the country—and cover the area all the way to the coast, marginal communities in many of the coastal towns and villages and the area to the west of Beverley. It offers opportunities to people who have not done so well at school, and it will give people a real chance to get into work and pay taxes. As other hon. Members have said, this will be an excellent investment by the Exchequer.

I hope that the Minister will tell us today who is ultimately responsible for the current fiasco and what he will do to ensure that the millions of pounds that should have been spent on front-line education do not go up in smoke. Obviously, I would also be interested to hear about the prospects for East Riding college and its move to the centre of Beverley. That move is the first phase in the regeneration of a large derelict area, which is an eyesore in the centre of Beverley. The project will not only regenerate the town, but provide hope for those with least in the surrounding community.

I shall take only a few minutes because a great number of hon. Members still want to speak.

It has been very sad listening to hon. Members talk about all the different colleges that are affected by the funding crisis. It is also interesting to see how broad the spectrum of their experiences is in this matter. Some of the colleges that face difficulties are clearly in the building process, others have detailed plans worked up and still others, such as Cornwall college in my constituency and the college in the constituency of the right hon. Member for North-West Hampshire (Sir George Young), have submitted an application and are still to find out whether it has been agreed in principle—they are also caught in this logjam, albeit that they are slightly further down the line.

Blackpool and The Fylde college is awaiting a major relocation and rebuild decision. Blackpool sixth-form college has had money and phases, but it is just as disappointed because it had been confidently expecting the builders to be on site for the next phase to complete the project. There may be different types of problem, but they all lead to the same disappointment.

The hon. Lady is exactly right. What has struck me from listening to other hon. Members is how important all these projects are to the regeneration of their local areas. It is worth emphasising that we are talking not just about the regeneration of inner-city areas; regeneration is also critical to more rural areas and market towns. Although Cornwall college has nine sites across Cornwall, one of the key sites is in Pool in my constituency. There is a massive urban regeneration scheme there, and a huge amount of resources are being poured in. There is a danger that if the college’s project does not go ahead, it will remain a black hole in the middle of a regenerated area. The area has huge deprivation, and unemployment has gone up by nearly 80 per cent. in the past year. There are huge issues to be tackled, and the college will be critical in developing skills and providing people with support, but all that is being threatened, and the people who have been asked to develop programmes are being given false hopes.

The bulge that we are seeing reminds me of a symptom more common in the defence procurement budget, because the commitments that have been made go beyond what can actually be delivered, which is disappointing. I wonder about the motivation for that. Has the LSC encouraged this or has the Department encouraged the LSC to tell colleges to be ambitious—not to prioritise the sites that they felt were most in need of development, but to look at entirely redoing their estates strategy.

I have a few questions to which I hope the Minister will respond. I would appreciate a clear indication of exactly how many colleges are affected and exactly how much public money has been invested in developing proposals. Cornwall college has spent £500,000 so far on developing its proposals, and hon. Members have mentioned other, larger sums. What scale are we talking about? How much money has been spent by colleges that are still awaiting approval in principle? How much has been spent by those that have received such approval? How much has been spent by those that have now been told to put all their building work on hold?

Along with the principal of Cornwall college, I would also appreciate some detail on exactly how the renewed criteria will be reviewed and on what basis they will be formed. Cornwall college’s proposal is further down the line and still awaiting approval in principle, and the college is concerned that there will be a cut-off, with only those projects at more advanced stages being considered. As I said, this regeneration programme is critical, so I hope that the Minister will be able to reassure us that the impact of any improvements on the wider regeneration of an area will be taken into consideration, regardless of how far the application and the development of the proposals have gone. I very much hope that the Minister will look at the context.

There has been incredibly close co-operation between different agencies at a local level in developing the site. Cornwall college has worked closely with the urban regeneration company and other bodies, but it is concerned that there will be no equivalent co-operation at a departmental level and that it will be affected by that. Again, I hope that the Minister can reassure us that that will not be the case and that the wider issues will be taken into account.

Finally, billions of pounds of investment are tied up in the proposals. All hon. Members have spoken about the impact that improvements will have on young people and about the longer-term support that they will provide to the economy in these difficult times. It seems to me that it would have been wiser if the Government had committed their billions to supporting the programme and ensuring that it could be delivered in all the areas where it is needed so desperately, rather than spending them on a £12.5 billion VAT cut that will have made little difference to the people who would get most benefit from the college development programme.

I shall speak briefly, to enable as many hon. Members as possible to contribute. I came into the debate with a heavy heart to defend the case of Havering sixth form college and was surprised when my hon. Friend the Member for Basingstoke (Mrs. Miller) showed me a paper from the House of Commons Library that lists it as unaffected. If that is the case, I know that the college principal will be even more delighted than I will be, but I am not very optimistic.

Havering sixth form college is in a far worse state now than it was before the scheme in question was suggested, because, with the encouragement of the LSC, it has embarked on a major capital project and has already incurred costs to the tune of £6 million, in planning and the design process, professional fees and enabling works. The enabling works had to be done to gain access to the LSC funding, which has now been withdrawn. Those works involved the demolition of a sports hall and three classrooms, so the teaching and learning facilities in the college are now worse than they were.

The Minister has kindly offered to have a meeting with me and the principal of the college, and I am very grateful. May I tempt him a little further in his generosity—to come to Havering sixth form college and see the site? I know that his heart will soften, because if something is not done to help the college it will have to waste even more money on reversing the enabling works to enable the college to function. I place myself at his mercy.

A consortium in my constituency has been established to put forward a Thetford college bid under the 16-19 capital fund. The decision to establish a new post-16 facility in Thetford was strategic and based on genuine need. Will the Minister confirm whether the current problems relating to Building Colleges for the Future are likely directly to affect the 16-19 capital fund?

The town of Thetford has many historic problems, such as social exclusion, deprivation and unemployment. Three years ago, in 2006, we thought we saw the light at the end of the tunnel when Breckland council secured growth point status for the town. That was a serious commitment to the prospects of Thetford at that time. An integral part of the initiative was raising the outcomes for the town and broadening the learning pathway, which is relevant to the debate, and improving student support through the post-16 facility—the college. The proposal for a Thetford college was offered as new hope to the town as part of the new achievement.

However, the initiative hit a stumbling block as a result of the funding problems associated with the Building Colleges for the Future programme. The consortium is scheduled to place a bid at the end of the year, but the most important point that I have to make is that the ground work in preparation for the bid has been started, and money has been committed. Does the Minister agree that those who bid for future funding need clarification about where they stand? When will some sort of certainty be provided? A new Thetford college would increase learning provision in the town and encourage school leavers to take further training. Does the Minister accept that the ability of Thetford to continue with its progress would be scuppered if plans for a Thetford college were to be put on the back-burner?

The town, which has an historic manufacturing base, is short of skills; 16 to 19-year-olds who live there desperately need access to training, including vocational training. Will the Minister assure my constituents that Thetford’s progress will not be undermined as a result of the funding shambles?

I congratulate the hon. Member for Southport (Dr. Pugh) on securing the debate. My constituency has been hit hard by the funding freeze. In Basingstoke there is an excellent further education college, Basingstoke college of technology, and a sixth-form college called Queen Mary’s college. Both need significant investment if we are to make sure that they can deliver what the Government want from Basingstoke, which is that it should be a diamond for growth and provide the economic prosperity and growth in the south-east that we so badly need during the recession.

Ten weeks ago the Prime Minister said:

“An economic slowdown must not be an excuse to slow down the pace of investment and reform to strengthen our country for the future”.

I am sure that students, parents, staff and employers in Basingstoke want reassurances from the Minister that they will not be let down.

BCOT has a much-needed plan to replace its outdated 1960s buildings with a modern facility that is right for the job, to teach and train employees for the future and to achieve the ambitions that the Government have for us. Indeed, it was the South East England Development Agency that highlighted the fact that access to further and higher education in Basingstoke needed to be improved if we were to achieve the high targets that the Government have set for my constituency. The investment that is made must be focused on those areas that will generate the best social and economic returns. I think that Basingstoke has a strong case to make in that regard.

Will the Minister confirm today that the information given at the capital summit in Westminster on Monday, which representatives of his Department attended, is correct, and that colleges such as BCOT, which have an application in principle on their projects ready for submission but have not yet submitted it, will also be included in the review and prioritisation process? When will decisions be made on that process, and what criteria will be used? I am sure that everyone will want such detail. How will the available money be rationed to be put behind the projects that need to be completed?

BCOT has already spent £1 million on fees to get to the stage it is at. It has been working closely with the LSC in the firm knowledge that building further education capacity in Basingstoke was the Government’s strategic priority. It is vital that we should hear today what support will be provided, particularly given the rising number of NEETs in my constituency. In the words of the principal of BCOT, Judith Armstrong, the project is not a “nice to do”, but is a necessary project that must be undertaken.

Queen Mary’s college is part way through a significant redevelopment of its site and is just entering the next phase. I understand from a letter from the LSC that that is now under review. Again, that is deeply unsettling and a matter of deep concern for everyone involved. The Minister needs to suggest today when we are likely to get a resolution of that. A short delay in the implementation of those plans for BCOT and QMC would be manageable, but a failure to proceed at all would be, in the words of the leader of the council,

“damaging to the area’s economic prospects”,

not to mention the prospects of its young people. The situation is a matter of great concern for my constituents and I hope that the Minister can assure us that there will be a speedy resolution, that he will tell us what criteria will be used to assess which projects can go ahead, and that he will make it clear who, if costs are involved in the delay, will cover those costs.

Thank you for calling me, Mr. Benton; I thought that we had three minutes to go for further speakers. I congratulate my hon. Friend the Member for Southport (Dr. Pugh) on securing a debate that is important not only for his constituency—and King George V college in Southport, which he mentioned—but for many others. Many hon. Members have come to the debate, and I am sure that there are others whose colleges’ capital programmes are in jeopardy who would like to have been here, too.

We have heard about problems at Yeovil college and in Chesterfield; we have heard from my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy about problems in Cornwall. We have also heard about Barnsley, from the hon. Member for Barnsley, East and Mexborough (Jeff Ennis). When we were in the Library doing our homework for the debate, he showed me a clipping from the Yorkshire Post with a picture of a mainly demolished Barnsley college awaiting regeneration next door—a scene from downtown Beirut rather than 21st-century Britain.

We are having the debate, of course, against the background of a deep recession. We heard at Prime Minister’s Question Time today the usual list of all the things that the Government are doing in their various Departments. However, in a recession surely the Department for Innovation, Universities and Skills should be putting more into skills. This is a time when more people will have constantly to reskill to cope with changing economic circumstances. It is the further education sector that will have to rise to the challenge and enable adults to reskill, so that they can find their place again when there is eventually an upturn in the economy.

In addition, the very least that we would expect from a competent Department is to maintain control of its own budget—a budget of just over £2.3 billion, which it often trumpets throughout the country to show the scale of its investment. Indeed, in the Chancellor of the Exchequer’s pre-Budget statement in November, he was encouraging colleges to draw down on the budget at an early opportunity. He talked about acceleration of the Government’s capital programme. Well, now what do we have? The schemes of 144 colleges have been held up, and many others do not know whether they will ever enter into the scheme in the first place. That is not so much an acceleration of the capital programme as a slamming on of the brakes.

Among all these powerful statements, I should like to bring my hon. Friend’s attention to what is possibly the worst example of all, which is in my constituency and the Cotswold constituency. The National Star college is halfway through a £15 million transformation of its main campus, which caters entirely for those with complex physical disabilities. Does my hon. Friend agree that putting such a project on hold lets down the college, other potential donors, the existing investment and some of the most extraordinary young people in the country?

I thank my hon. Friend for his intervention. He may not know this, but I have visited National Star college, which is just outside his seat, and seen the remarkable work that the tutors there do with adults with profound learning difficulties. If that college is in difficulty, that would indeed be tragic for the life outcomes of those people.

The Association of Colleges has done an excellent analysis of the situation by ringing round its membership and has discovered that, at one end of the scale, 30 colleges have spent up to £250,000 on the feasibility stage, and at the other end of the scale—colleges that are awaiting final approval—18 have spent more than £5 million already on their schemes. Those costs have all been incurred as a necessary part of the Learning and Skills Council capital expenditure approval processes. The costs would normally be capitalised, but now they may have to be written off. The Association of Colleges has calculated that up to £300 million of expenditure may be at risk of a write-off if the schemes do not proceed.

Even if the schemes do proceed, there will clearly be delay, and delay itself is also fraught with risk. All the schemes do not depend just on LSC capital contributions. They also depend on matched funding, usually from sales of land, or contributions from other agencies. We all know that land sales are falling by the day, and many other agencies, such as regional development agencies, also have pressure on their budgets. The schemes depend on tender prices already agreed. Those prices may be renegotiated, or the building contractors themselves may go bust as a result of the delay and a new tender process may have to be entered into. Of course, loans are relevant, too, and the banks may want to renegotiate their loans.

What has been the Government’s response to this fiasco? They have swung from denial—initially they were hiding behind the LSC and the setting up of a review—to a breathtaking display of self-congratulation. As recently as last week, on the website of the Department for Innovation, Universities and Skills, there was a remarkable press release on this issue. The title was “College building programme has created 10,000 jobs”. It stated:

“This is part of the Government’s overall strategy to provide real help now for families…by cutting taxes, helping homeowners…and bringing forward £3 billion of capital projects.”

It went on to make spurious claims about how the college building programme adds a percentage or two to exam pass rates.

I hope that the Government will not hide behind the resignation of Mark Haysom—the chief executive of the Learning and Skills Council—to which the hon. Member for Barnsley, East and Mexborough referred. If anything, the finger should be pointed at the Government. Can the Minister confirm whether Mr. Haysom resigned or was pushed, and whether the terms of his reported £100,000 pay-off, plus, presumably, protection of pension rights, was agreed by his Department, so that we do not get into another Royal Bank of Scotland situation?

I have a number of other questions for the Minister, some of which have been raised already. How much funding will be available to be allocated in each of the financial years 2009-10 and 2010-11 so that colleges can plan ahead with certainty? Will he publish a definitive list of the 79 colleges that have obtained approval in principle and the 65 colleges awaiting approval in principle, which was referred to by the Secretary of State on 4 March? Is the Minister or the Secretary of State having urgent discussions with the Chancellor? The hon. Member for Barnsley, East and Mexborough said that the Treasury had a role to play in this respect. Will there be discussions on relaxing the borrowing rules? Colleges can borrow only 40 per cent. of their turnover. Is the Minister being supported in those discussions by the Department for Children, Schools and Families? Some £660 million of the budget is under its control, rather than his. Sixth-form colleges will shortly be transferred to that Department. Will the Building Schools for the Future budget still be guaranteed for those colleges, or will that be the next scheme in jeopardy?

These colleges have a clear role to play in the delivery of the education revolution that will take place in the next few years. Diplomas will be rolled out. The Government have ambitious programmes for more apprentices. Last year, we passed a Bill to increase the leaving age for education and training to 17 and then 18. All those laudable objectives could be put in jeopardy if the further education programme is held up. Ironically, Sir Andrew Foster has done a review of this sector before. Back in 2006, he said that further education in England was the unloved middle child of the English education system. It is up to the Government to prove that that is not the case.

I am pleased that we are having this important debate. I congratulate the hon. Member for Southport (Dr. Pugh) on securing it to raise the subject of the college capital funding programme. I was very concerned to hear about the problems that his local college has been experiencing and the money that has already been committed from its own resources.

We have had a good debate, with the same issues raised on both sides of the Chamber. My right hon. Friend the Member for North-West Hampshire (Sir George Young) and my hon. Friends the Members for Beverley and Holderness (Mr. Stuart), for South-West Norfolk (Christopher Fraser), for Basingstoke (Mrs. Miller) and for Upminster (Angela Watkinson) made powerful cases for their local colleges and highlighted the problems that they are suffering because of the fiasco that we are enduring. There has been without doubt a catalogue of failings and problems throughout the country, caused by incompetence. The Minister must take some of the blame for that.

The LSC began to cast doubt on the programme’s continued viability only in December 2008. However, in a letter to the Isle of Wight college principal, Debbie Lavin, dated 16 January 2009, the LSC chief executive, Mark Haysom, claimed that

“there is no freeze on the capital funding programme”.

It was only in the following month, after Debbie Lavin had insisted on the LSC sending her a letter, that the LSC stated that the college should

“Cease working on the project with immediate effect”.

I note my hon. Friend’s comment. He raises a very serious issue and we look to the Minister to respond. I hope that he will do so, because there are serious questions that need real answers, not just fluster and bluster. Ultimately, the Government are responsible for the situation that we are in today.

I am a passionate supporter of the FE sector and I know the good work that is done throughout the country in so many colleges. FE colleges have the potential to change communities and lives for the better. They give real help to individuals. We all want to support colleges and reinvigorate the sector, as many hon. Members said.

Britain’s ability to come out of recession will depend on the strength of its skills base. Unemployment is rising quickly, so it is incumbent on the Government to provide people who have lost their jobs with opportunities to learn new skills or retrain during this difficult time. With skilled workers, businesses are better able to adapt to changing market conditions and to innovate to identify new opportunities. Similarly, skilled individuals are better able to cope with economic turbulence.

We heard that further education colleges play a vital role at the heart of their local communities, not only as providers of education but as providers of opportunity. They are in touch with the needs and demands of local people, local businesses and the regional economy in a way that funding quangos, Departments and some Ministers are not. The success story of the FE sector becomes ever more vital in light of our present economic problems.

We all hoped that the Building Colleges for the Future programme would be effective and that it would reinvigorate the sector with new facilities and new opportunities. Colleges were encouraged by the Learning and Skills Council to make innovative and substantial plans. The LSC even wanted colleges to be more ambitious than they had originally planned or wanted. Presumably, that was on the instructions of the Government. Some colleges were fortunate in getting their capital funding before the Government freeze was implemented.

Ministers are quick to remind us of the investment that has been made. The hon. Member for Barnsley, East and Mexborough (Jeff Ennis) highlighted that fact. Of course we welcome the investment, but we need the problem of the capital freeze to be resolved, as it is critical to the sector.

The Government’s handling of the further education capital programme has been nothing short of chaotic. In December 2008, the LSC decided to freeze the approval process for three months, a decision that was made suddenly and without public announcement. Nineteen colleges were due to receive approval, yet Ministers claim that as part of the Prime Minister’s fiscal stimulus, some of the college building budget was brought forward from 2009-10. The Prime Minister said in January:

“An economic slowdown must not be an excuse to slow down the pace of investment and reform to strengthen our country for the future…we have also taken action involving some tough decisions that will also benefit every region and nation of the UK to bring forward our capital spending programmes”.

The LSC has a £694 million capital budget for 2008-09. The budget was due to rise to £819 million in 2009-10, following the Government’s decision to bring forward public sector capital expenditure. Some of that money was to be spent in the current year. The three-month freeze means that many capital grant payments will be delayed until the next financial year, yet the Government still claim that there is no freeze.

In January, the chief executive of the LSC said:

“There is no freeze on the programme.”

The Secretary of State for Innovation, Universities and Skills repeated that claim in the House, saying:

“There is no freeze in that spending programme.”—[Official Report, 29 January 2009; Vol. 440, c. 487.]

Many colleges, with the support of the LSC, had therefore already started their building works, expecting the final funding bids to be rubber stamped at the December meeting and beyond.

Following that, on 4 March the Government announced that while eight of the programmes would be approved, they would not be funding the 144 projects in the earlier stages of the approval process. However, as we heard, many of those colleges have already started their building programmes, with the encouragement of the Government. The freeze will result in higher costs for institutions, in some cases running into millions of pounds.

Who is affected by the latest freeze? Seventy-nine colleges are waiting for approval in detail, the final stage of the approval process. To be considered for approval in detail, colleges must have already secured planning permission and put together a full project brief. Those colleges will have incurred considerable costs to reach that stage, and, as we have heard, some have begun demolishing old buildings. Sixty-five colleges are waiting for approval in principle. Those colleges will already have assembled a project team and put money towards preparing the bid. For example, I understand that Worthing college has spent £1.7 million getting to this stage, which is money from its own reserves.

A survey by the Association of Colleges found that 168 colleges have already spent £215 million. I understand that some were led to believe that the money had been ring-fenced for them. The hon. Member for Barnsley, East and Mexborough told us of another example, that of Barnsley college, which I understand has been half demolished. It is unacceptable that colleges should be left in that situation. It is not acceptable for the Government to say that it does not matter because it does matter to the people and communities involved. I understand that there may be job losses, and they will affect not only the colleges but the construction industry—the architects and engineers involved—and the ancillary staff connected with the projects. The problem will also affect future students. Some fear that projects that are being put on hold may never be implemented.

Ministers must come clean on the scale of the problem. The colleges affected will not be able to improve their facilities at a time when it is desperately needed. What will the Government do about it? I have a series of questions for the Minister. I know that time is short, so I shall not spend too long on them.

Concerns about the affordability of the capital programme were expressed for the first time at the September capital board meeting and at the main board meeting in December. The Department for Innovation, Universities and Skills was represented at that December meeting, so when did Ministers first discover the scale of the crisis?

One of my regional papers, Kent on Sunday, our free Sunday newspaper, last week had the front-page headline “Colleges facing funding freeze”. The article highlighted the plight of colleges in Kent. It said that North West Kent college had already demolished some of its buildings, and that Thanet college had spent £4 million of its own money preparing to rebuild.

At least £198 million may have to be written off if colleges’ capital projects do not get LSC backing. The LSC is anticipating legal challenges over the effects of the freeze. Given that colleges were encouraged to apply for capital projects, what will the Government do to compensate those colleges that, through no fault of their own, find themselves financially exposed because of the mismanagement of the capital programme? Rather than spending £100,000 redesigning the DIUS website, perhaps the Minister should have put that money towards costs incurred by colleges as a result of the Government’s incompetence.

The principal of Barnsley college, Colin Booth, said that delaying works to his college may well end up bankrupting it. What will the Government do to prevent colleges from going bust? With Barnsley college in mind, what will the Government do to support projects that have already started construction?

The failure of some projects will have much bigger implications. For example, the College of West Anglia’s redevelopment is part of a massive regeneration project in King’s Lynn. Planning permission has been obtained, and funding from several authorities is in place. The college itself is a crucial part of the project. What will the Government do about situations like that?

Owing to glaring communication failures, much of what we know about the crisis has come to light through surveys of colleges and freedom of information requests. Will the Minister commit the Government to providing periodic statements to the House that include all the relevant figures and progress updates?

The chief executive of the LSC, Mark Haysom, has resigned, taking full responsibility for the programme’s failure. Essentially, Ministers have been passing the buck. Mr. Haysom said:

“I don't need to wait for that report to be published before making my decision because it will, I’m sure, confirm what I now know—that there have been failures in the way that the LSC has managed the programme.”

Does this sudden outbreak of accountability mean that Ministers will follow Mr. Haysom’s lead? They have failed. What responsibility will they take?

It is of paramount importance that the Minister sets out as soon as possible how much funding will be available for the postponed capital projects for which funding has been promised by the LSC in order to ensure that colleges can plan effectively and mitigate the financial effects of continued delays. The LSC also needs to confirm the timetable and criteria for the prioritisation of the projects.

The LSC’s communication with colleges over the past four months has been extremely poor. The minutes for the LSC national council meeting in December, when the initial decision to postpone all capital projects was taken, were issued only as a result of a freedom of information request. That is disgraceful. We are still awaiting publication of the minutes from the meetings of October 2008 and March 2009.

The Government have let down so many colleges and learners. The Minister ought to be ashamed. He should find the courage to apologise and say what he is going to do.

I congratulate the hon. Member for Southport (Dr. Pugh) on securing the debate. As has been noted, it is unusually well attended, as this serious matter is of great concern to many Members. I am acutely aware of that fact. In the small time that I have available, I shall take interventions from those hon. Members who have not yet managed to speak.

I pay tribute to the hon. Member for Southport (Dr. Pugh) on securing this debate on a very serious matter. Taking up the theme of his introduction, will the Minister tell his right hon. and hon. Friends at the Department for Innovation, Universities and Skills that we need a much fuller debate? This short period is totally insufficient to do justice to the seriousness of the matter. In my own case—

Order. I think that the point has been made, if it was merely to ask the Minister for a more extended debate. To be fair, there is little enough time for the Minister to respond to every point made.

I shall take my hon. Friend’s point back to my right hon. and hon. Friends in the Department and to business managers.

On a point of order, Mr. Benton. The Minister knows of the seriousness of the situation at West Nottinghamshire college, which has already spent £7.5 million at the direction of the LSC—

Order. I am sorry, but that is not a point of order.

I have talked to the principal of West Nottinghamshire college, and I understand that the situation there is difficult, as it is in many parts of the country. Clearly, too many right hon. and hon. Members have made points about individual colleges for me to cover them all now. However, I have tried to write to all those hon. Members whose constituencies were thought to be affected, inviting them and their college principals to meet me to discuss the matters in detail. Some Members will not, however, have received such a letter, because the LSC could not tell us—this has been part of the whole problem—the scale of the problem and which colleges were affected until a few days before the written statement made on 4 March by my right hon. Friend the Secretary of State for Innovation, Universities and Skills. We have only had that information for the past three weeks.

I join everyone in congratulating the hon. Member for Southport (Dr. Pugh) on raising this important issue. To the litany of concerns, may I add Leeds, where the LSC encouraged colleges to merge? Three colleges opted in, on the explicit understanding that major capital resources would be made available to meet the infrastructure requirements. In fact, two colleges that did not join that merger think that they might be penalised. Can the Minister understand the dismay and despondency now that the capital funding tap has been turned off?

I understand my hon. Friend’s point, and I share his dismay. However, it is not appropriate, practical or feasible for me to go into the details now of any of the colleges in Members’ constituencies. If they want to meet me and to bring their college principals to have a more detailed discussion, I am happy to extend that invitation.

With regard to the communication that many of us have not received, will the Minister agree to a specific date by asking his officials to contact us, including myself, so that I can get a date in the diary soon to discuss the problems in my constituency, bearing in mind that he will not necessarily cover it in his remarks today?

I wrote to Members this week setting out the situation, but I shall write again to those hon. Members whose constituencies we believe to be affected, making it clear that, as has always been the case, anybody who wants to discuss their own situation will be welcome. The problems with the programme are well known. Many right hon. and hon. Members spoke with passion and feeling about the difficulties in their constituencies, and I have repeatedly said that I understand their frustrations as local representatives. I also understand the frustrations and fears of college principals and governors. I was in Leicester this morning talking to hundreds of college governors and clerks; understandably, feelings were strong.

I was specifically asked not to do so, but, before entering into further details, I shall, in five short sentences, put a few fundamental points on the record. It is important that all right hon. and hon. Members, especially Opposition Members, understand that, in 1997, this budget was nil. Since then, 700 renovation schemes have been carried out in 330 colleges, and only 42 colleges in the country have yet to receive any investment.

The Minister is doing what I asked him not to do: to read out a litany of what has happened so far and to say that he shares our pain. We are all grateful for that, but fundamentally, colleges need a timetable to get us out of this mess. Can he give any information about when the issue will be resolved? What dates have we?

The hon. Gentleman said in his opening remarks that we need to work out an answer to the problem. I agree with that, but now is not the time or place to do so, and nor are we the people to do it. I cannot give him an easy answer; I do not have a ready-made, off-the-shelf solution; I cannot give him a simple time line. However, I can repeat what we have said before: the LSC has a new chief executive who understands clearly that his first priority is to deal with the troubles, especially the worst and most urgent of them, affecting those 144 colleges. I also take the point made by the hon. Member for Yeovil (Mr. Laws) that the problem is not even limited to those 144 colleges, because many others that have not applied for approval in principle will have invested considerable management time, resources and sums of money, and they could have borrowed money to do so. The first responsibility of the LSC’s new leadership will be to address those colleges’ needs.

When, in the next week or two, Sir Andrew Foster’s report is received, the LSC’s new leadership, working with the Department, the Association of Colleges and the sector more broadly, will introduce proposals to deal with the problems. We will deal with individual problems according to their urgency and seriousness.

I accept everything that my hon. Friend the Minister says. However, many principals feel insulted. I, and they, accept and are grateful for everything that has been done already, as underlined in constant press releases, but many principals feel that they have been treated with disrespect. My hon. Friend is not a disrespectful person, but to constantly go over what we have done already is not enough. They want practical answers to very definite questions. I thank him for what he has done for my constituency and its colleges, but they want definite answers. If we do not understand that, we risk losing what good will—

Order. That intervention is too lengthy.

I understand that colleges need clarity and certainty and that people feel vulnerable and frightened. We are clear that the first responsibility of the LSC’s new leadership is to give them that clarity and certainty. I cannot do that this afternoon. The LSC understands that it must do it immediately and urgently. If my hon. Friend says that college principals feel insulted—

Order.