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LSC debacle: colleges to receive partial refunds

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Colleges faced with crippling financial problems as a result of abandoned building work are to be compensated by the Learning and Skills Council (LSC)

The LSC confirmed that it would offer a total of £34 million in compensation to colleges that suffered as a result of problems with its £5 billion college renewal programme.

However, the AJ understands the cash handout is equivalent to just a fifth of the money wasted by colleges on doomed projects.

Jonathan Herbert, managing director of Bond Bryan Architects said: ‘It’s good that colleges have been partially recompensed but it sounds like it has been a fraction of what has been spent.

‘This is really assisting colleges who have spent money on consultants with no end result,’ said Herbert.

He added: ‘Generally, our clients with cancelled projects paid any outstanding fees months ago, so this money will have little effect on us. [Nor will] the money help colleges tackle the pressing need to improve their estates.’

A total of 41 colleges suffered severe financial difficulty after abandoning building schemes following problems with the funding of the LSC’s programme.

Geoff Russell, chief executive of the LSC, said: ‘We recognise that a number of colleges have experienced significant difficulties as a result of writing off these development costs.

‘Ministers agreed to mitigate these difficulties and undertook a review of the costs incurred by colleges to identify such issues, as well as to assess the appropriateness of expenditures. The additional money we are now providing draws a line under the capital funding issue.’

However, the Association of Colleges said the money set aside by the LSC accounted for ‘less than 20 per cent’ of the amount that had been spent on shelved projects.

Julian Gravatt, assistant chief executive of the Association of Colleges, said: ‘A small amount of extra Government funding – separate from help for colleges with immediate financial problems – would lever new college investment and allow them to deal with urgent problems in their own estates while providing much-needed facilities.’

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