I welcome this opportunity to serve under your chairmanship, Mr. Hood. I have served alongside you in Committee for many years, but never under you. I am grateful for this opportunity to debate the capital programme at Canterbury college. By happy accident, this debate falls just after the publication of Sir Andrew Foster’s report on the wider problems of capital funding, and I thank the Secretary of State for Innovation, Universities and Skills for sending me a copy of the report.

Canterbury college is the further and higher education college at the heart of Canterbury and east Kent. It enjoys an enviable reputation as a great place to learn and changes lives by offering a wide range of full-time, part-time and workplace courses to approximately 9,000 students a year. It is pivotal to the local economy and is located near the boundary of Northgate ward, which has a national designation for deprivation. The college is at the forefront of new apprenticeship training, diplomas, adult basic skills and the reskilling of those who have lost their jobs. It also provides a range of pathways into higher education, mostly for the very categories of people whose participation in higher education nationally remains frustratingly low.

The college has succeeded in bringing NEETs—those not in education, employment or training—back into education, and in re-engaging and motivating students who have become disaffected with, and—in some cases—excluded from, the traditional educational system. It works with some 300 apprentices and their employers and encourages the take-up of apprenticeships and completion of courses in the face of a recession. The number of apprenticeships not being completed at the moment is an understated problem.

The college works with, and provides skilled training solutions for, more than 800 employers in the area and is working closely with schools to set up and deliver the new national diplomas that will form the basis of education in years to come. It is the best performing college in the south-east for Train to Gain.

indicated assent.

I am delighted to see the Minister nodding.

The college commenced a major three-phased redevelopment of its site in 2005. Phases 1 and 2 were completed bang on time and budget, at a cost of approximately £50 million. Phase 1 was completed in 2007 and included the new children’s, technology, land-based, motor vehicle and post-16 centres. They house modern classrooms, study rooms and science laboratories. Phase 2 was completed in February 2008 and gave the college a unique street-like layout. It includes a new library and facilities for arts, design, media and performing arts and provides front-of-house services open to the public, including a snack shop, travel shop and refectory. Those two phases have resulted in improved participation and a growth in learner numbers. Furthermore, learner success rates have improved year on year for the past three years, and continue to do so.

The college applied for the third and final phase of campus redevelopment in close consultation with the Learning and Skills Council. The council wrote to the college on 31 July 2008 granting approval in principle and agreeing that budgetary provision equivalent to 91 per cent. of the estimated total project cost— £53.8 million—should be made. However, it has recently emerged that the LSC has not got enough money to fund the 79 projects that it approved in principle. There is an estimated £2.7 billion national shortfall. Phase 3 will provide for the transformation of facilities for students with learning difficulties and disabilities, including new commercial catering facilities and a fully equipped flat to hone their work and life skills. It will include a new dedicated centre for students on higher education courses, superb specialist training facilities for catering and hair and beauty, and other facilities serving the community through restaurants, salons and a new spa. Phase 3 also includes a new sports hall with space for four tennis courts, changing facilities, a fitness suite and physiotherapy rooms. That will also be available to members of the public and community groups for hire.

Alison Clarke, the principal and executive director of Canterbury college, commented:

“The impressive completed campus buildings have modern industry standard facilities and first class student accommodation. However, one third of our estate’s accommodation remains dated and inadequate.”

The college has conducted and paid for enabling works to date for phase 3 that were included in the approved application in principle programme—indeed, it has even demolished a temporary building. The full design has been completed and full planning permission obtained, and the educational case for phase 3 has been commended and agreed. The final phase offers excellent value for money, as did the first two phases. It will provide new and state-of-the-art accommodation for high-priority areas such as skills development. Under the Better Regulation Executive’s environmental assessment method—BREEAM—the scheme achieves the “excellent” rating for sustainability. The buildings of phase 3 will complete the transformation of the campus at Canterbury and demonstrate the value that we all place on our learners.

In this time of economic uncertainty—to put it mildly—I need hardly say that wider issues apply. Any delay will impact on employment within the construction industry. The proposed design and build contractor, Wates, is committed to using local subcontractors—of its 19 key sub-contractors, 10 are local—and the majority of the smaller subcontractors and individual workers are also local. It would typically have 300 staff on site, helping to sustain the local economy. This will include family-run contractors, self-employed tradesmen and new apprentices. I need hardly add how important this is to a relatively deprived area in a recession.

Phase 3 will remove the imbalance of superb new facilities standing side by side with buildings that can barely support the education that our learners deserve. The new campus will serve to educate, train and raise the self-esteem of those young people and adults who have experienced disadvantage, whether through learning difficulties and disabilities, home circumstances or simply by not being able to engage with teaching in a school environment—a growing proportion, sadly, of young people. The whole campus will provide a high standard of education and training in a facility that is environmentally sustainable and will help us to meet our zero-carbon target by 2016. This in turn will help to produce a new generation of young people who put sustainability at the heart of what they do in the future.

The college itself is the main focus of this debate, but one or two wider points need making. Sir Andrew Foster’s report commented:

“There were warnings of overheating as early as February 2008 but there was delay and confusion in addressing them”,

and that

“opportunities to intervene were missed.”

He also exposes the sleight of hand involved in bringing forward by one year some £110 million of spending on college building. He writes:

“A decision to bring forward £110 million of capital funding did seem to disguise the underlying problem in-year but merely amplified it in 2009-10.”

He puts the blame for failing to warn FE colleges that were continuing to plan and spend implicitly at the door of Ministers. He said that

“when the impending storm was well and truly upon them there was a failure of communication with colleges. The Council wanted full communication but it did not happen.”

I sympathise with the Minister’s anxiety and I understand his desire to know the full picture and have a plan in place before revealing the problem to the public. In the meantime, however, Canterbury college was spending money and management time on phase 3. In the college’s case, the position was especially unfair: as late as April 2008—two months after the warning signs had emerged—the LSC intervened and asked the college to replace its modest phase 3 proposals for a mixture of rebuild and refurbishment with a more expensive full rebuild.

Andrew Foster also makes it clear that a preoccupation with yet another reorganisation of the LSC played a major role in diverting senior management from doing the job in hand. Three general questions arise for which I should be grateful for some answers. First, can we have an absolute assurance from the Minister, whom I am delighted to see in his place, that the reorganisation of the LSC will be put on hold until the problems have been solved? I know that there is a case for some restructuring—all parties agree on that but not necessarily on the shape—but let us deal with the crisis first. Secondly, will the Minister tell us how much money is left unallocated and what is the estimated aggregate cost to the outstanding projects for which approval in principle has been granted? Thirdly, on what criteria will priorities be set in choosing which of the outstanding projects get the remaining, relatively limited, pot of money?

Returning from the general to the particular, I know that the Minister is personally strongly committed to education and will want to do the best he can within the limited resources available. I ask him to bear it in mind that this is a college that serves 9,000 students, a large proportion of whom are from less advantaged backgrounds. It is a college with an excellent track record and one that has made an outstanding success of the two earlier development phases. All the activities delivered by the final phase would help to tackle pressing social and/or economic needs. Indeed, most of them directly address specific Government targets. I hope that the Minister will ensure that Canterbury college gets the remainder of the tools that it needs to get on with the job that it does so well.

It is a great pleasure to serve under you, Mr. Hood. I am glad to be able to congratulate the hon. Member for Canterbury (Mr. Brazier) on securing this debate, which is of great concern to him and to many people in his constituency. The Government are committed to rebuilding the further education estate. As we speak, 250-odd building projects are on the go and unaffected by the current problems. Some £110 million of Government money, which was brought forward in the pre-Budget report to the current spending period, is in addition to the £2.3 billion that we have already spent in the past three years. I recognise that there are serious issues for colleges applying for new capital funding at the moment, and I understand their frustrations with the delay. They have significantly invested time, energy, money and commitment in developing such projects. I understand, too, that with uncertainty comes worry. I want to repeat the commitment made by my right hon. Friend the Secretary of State for Innovation, Universities and Skills and me that we are working as quickly as possible to get a clear and coherent approach so that we can offer all colleges, whatever their position, the clarity and the certainty that they need.

Let me turn to the specific issues affecting the hon. Gentleman’s constituency and college. First, though, let me say how pleased I am to acknowledge the outstanding service provided by Canterbury college to the people of south Kent. The college is playing a vital role in the community through high-quality educational provision and increased support to local business through its outstanding performance in Train to Gain.

Investment has been crucial to the college’s success. Seeing the benefit that capital investment can have on a community such as Canterbury is exactly why this Government have invested so heavily in schemes across the country and are committed to continuing to do so. Canterbury college has already received more than £20 million in capital funding, which enabled it to complete phases 1and 2 of the college’s redevelopment. The hon. Gentleman talked about the new children’s centre, the technology centre, and the post-16 centre that houses modern classrooms, study rooms and science laboratories. He told us about the second phase. He also talked about the unique, street-like layout that includes a restaurant complex and training facilities, which I have not yet seen.

The Minister must come and visit. I think that he will be impressed.

I was going to say that over the past few months, I have seen more details of college capital building projects than I would otherwise have done as a new Minister, and rarely have I seen any that I have been more tempted to visit because of their and interest and excitement than those in Canterbury. Given that the third phase includes a spa and tennis courts, which are already well advanced, I might take up the hon. Gentleman’s offer.

Naturally, I will not comment in detail on Canterbury’s application, as individual funding decisions are the responsibility of the LSC and not of Ministers. However, what I can say is that I am listening to college principals and MPs. I genuinely understand their concerns and am urgently pressing the LSC to give everyone a clear way forward.

According to the Foster review, there are currently 79 projects. The hon. Gentleman asked me for the total outstanding cost of those that have received approval in principle. It is £2.7 billion and there are projects worth a further £3 billion that have applied for, but not yet received, approval in principle. It is quite clear that all such projects cannot be funded on the time scale envisaged in this funding round. That is why my right hon. Friend the Secretary of State asked Sir Andrew Foster to compile his review.

Sir Andrew’s report is very clear. He says:

“A good policy has been compromised by the manner of its implementation. The policy intent to transform the FE estate is clear and positive. But the implementation approach”—

this is the crucial part—

“did not include a robust financial strategy or a regional or national approach to prioritisation.”

Recognising the failures, the LSC’s former chief executive, Mark Haysom, resigned on 23 March and Geoff Russell, formerly of KPMG, was appointed as acting chief executive on the same day. He said that his first task was urgently to provide certainty and clarity about the college building programme. Geoff Russell has appointed property experts to support the LSC to undertake a comprehensive assessment of all colleges to get more robust and reliable information. Secondly, he has asked Grant Thornton to review the financial data held by the LSC to ensure, as Sir Andrew Foster recommends, that

“the process is grounded in fully accurate and detailed information about capital schemes in the pipeline.”

Thirdly, he has immediately appointed a director to be personally responsible for the capital programme, which was in response to Sir Andrew’s conclusion that there was no clear overall responsibility for the capital programme within the LSC.

While that work is going on—I have been told that it is going on very speedily and successfully—I have made it clear to all college principals that we will not allow any college to get into a situation in which it cannot meet its financial obligations as a result of decisions taken by the LSC on the capital programme. I should like to take this opportunity to say that if any principal is worried about their financial situation, they should get in touch with their local LSC, which will advise them on the best course of action.

Let me turn to some of the last questions raised by the hon. Gentleman. He asked for the machinery of Government changes to be stopped. I understand where he is coming from, but I have to disappoint him. Now, more than ever, is a time when employers and individuals need the skills that will help them not just to survive the economic downturn but to emerge more competitive when business picks up again. That is why we are creating the Skills Funding Agency, which will concentrate on results, not processes. It will help employers find the training that they need, and access Government funding in a much more direct and straightforward way. As this process is now so near to completion, it is the time not to slam on the brakes but to press ahead and deliver the changes as speedily and efficiently as we can, which we think that we are on track to do.

Capital projects are long-term schemes that are prepared, built and paid for over a number of years, which is why Geoff Russell, the new acting chief executive, has appointed external property experts, Grant Thornton, to verify the information and to ensure that Sir Andrew’s recommendation that the process is grounded in accurate and detailed information is met. Clearly, however, as Sir Andrew also recommends, the programme must move from a demand-led process to a needs-based approach. It is vital that, moving forward, we have a set of transparent criteria that the sector supports. That is why the LSC is consulting the sector. In co-operation with the Association of Colleges, it has established a group of college principals to help draw up the criteria for prioritisation to meet Sir Andrew’s recommendations.

I am listening carefully to the Minister. Clearly, the working group will come up with some recommendations on the crucial prioritisation factors to decide what can and cannot be afforded. However, presumably, Ministers will at least have an input to that. In fact, I imagine that they will have to sign off the list of criteria. Will the Minister give some indication what criteria he and his ministerial colleagues in the Department for Innovation, Universities and Skills believe should be given importance?

Ministers will have some input in drawing up, at the very broadest level, the policy parameters of the criteria that may be taken forward, but they will not have an input in the process at any level of detail. Certainly, they will not have an input in deciding which colleges get what in future.

The Minister is making a serious attempt to answer all my points, for which I am grateful, but we are in danger of mixing two separate points. Everybody understands that the LSC and successor bodies will decide the allocation to individual projects, but the question of setting the criteria must surely be agreed between the LSC and the Government. Presumably, the Government of the day, who are answerable to Parliament, will not let the LSC make the criteria without Ministers taking a view on them.

The hon. Gentleman has given an accurate description of the situation. The Department and the Government are talking with LSC officials about the kind of criteria that will guide the process. Those talks are ongoing. The process of drawing up the criteria is making good progress and we expect to be able to report on it pretty soon. The Government remain committed to rebuilding the further education estate but, again, I understand the frustration caused by the delays.

As the hon. Gentleman eloquently said, colleges are an essential part of communities. Investment in further education has been doubled since 1997 and colleges now bring learning directly to the heart of communities in ways that were not previously imagined. That learning is practical and grass-roots. It gives people the basic skills to enable them to get sustainable employment, and business the skills to generate wealth and prosperity.

I can assure the House and the hon. Gentleman that my Department and the LSC fully understand the need for urgency. Well advanced projects such as Canterbury are crying out for clarity and certainty. We understand that, as does Geoff Russell in the new leadership of the LSC. My commitment to those colleges, the hon. Gentleman and the House is to identify quickly, and set in place, a clear and coherent approach to ensure that lessons are learned, not only by my Department and the LSC, but by the new SFA.