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'Catastrophic mismanagement' by LSC and government costs millions says report

Catastrophic mismanagement by the Learning and Skills Council (LSC) compounded by government oversight failures could cost hundreds of millions of pounds, concludes a report published today

Spend, spend, spend? – The mismanagement of the Learning and Skills Council’s capital programme in further education colleges’, looks at the financial debacle of the further education programme and says a complicated management structure at the LSC, together with approaching structural change, bred a lack of responsibility and air of distraction.

In summing up the report - published by the Innovation, Universities, Science and Skills Committee - chairman Phil Willis said: ‘Of all the reports we have been involved with, there has never been a report that has been so damning.’

Willis criticised the mismanagement of funds and added that the LSC was a lost opportunity. ‘Without doubt this was one of the most ambitious capital projects we’ve seen and it is a great sadness to this committee that through catastrophic mismanagement work has ground to a halt.

‘It may now be decades before we see the sort of investment that is necessary,’ he said.

The committee also concluded that the situation could easily have been avoided. ‘We have established it was possible for the programme not to hit the buffers if the LSC had listened and flagged up problems,’ said Willis.

‘The LSC’s chairman, council and management were focused on the council’s looming abolition and the then DIUS, the department which was meant to be supervising them, clearly wasn’t doing its oversight job properly. It is vital that the new department for business, innovation and skills (DBIS) ensure such a situation is never allowed to happen again.’

The committee has asked the government to analyse which colleges are out of pocket as a result of the failures by the LSC and to compensate them. There is no indication yet as to whether architectural practices will recover lost fees.

It also emerged today the National College for Disabled Students faces uncertainty over the mismanagement of funds. Commenting on the report, Helen Sexton, principle of National Star College said: ‘I am pleased to see that the government select committee has recognised the gravity of the situation and the scale of mis-management and catalogue of failings that has led to the loss of £6.5 million of funding for the remaining phases of our vital project.

‘If we are unable to secure the funding that was pledged and approved in principle by the LSC back in 2006, we will have to make some tough decisions and that could mean reducing the number of students we are able to accept. We have already completed the first two phases of largely enabling works and we had no reason to believe that the funding would not have been ‘ear marked’ for the remaining phases.’

The Select Committee recommendations in full

- All national capital programmes should have an agreed in-built mechanism for prioritisation from the start, even if they initially underspend

- A review takes place across the whole of government of the operation of non-departmental public bodies

- The LSC must immediately take steps to set out a timetable for the remainder of the evaluation process

- DBIS and the LSC must ensure that the arrangements for compensation for colleges’ sunk costs are settled urgently

- A small amount of government funding must be made available to support college who wish to raise alternative finance for their projects, and the potential to involve HEFCE and local authority funding investigated

- Colleges must be assisted to share best practice and contacts or reduce costs through shared use or redesign

- Funding for an innovation fund and for small projects should be set up as soon as possible

- The new BIS committee must maintain scrutiny of how LSC deals with Train to Gain and Adult Apprenticeship funding

Readers' comments (2)

  • http://www2.le.ac.uk/ebulletin/publications/2000-2009/2005/08/orations/haysom

    Gives a fair idea of the type of person thought fit to oversee a major government capital programme.

    Unsuitable or offensive?

  • In essence until some idoits sent to jail this will goes on as ever. People just jump from one boat to nother and never lose anything except face. These needs to be a change.

    Unsuitable or offensive?

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