Central Bedfordshire College

Andrew Selous Excerpts

Thursday 29th November 2012 Commons Chamber

[Andrew Selous (South West Bedfordshire) (Con)]

Central Bedfordshire college is a vital institution in the constituency I am proud to represent. It has a presence in all three of the towns in my constituency—Dunstable, Leighton Buzzard and Houghton Regis. I am a strong supporter of the vital work of colleges, as they provide the skills that people need to make Britain a high value-added economy. It has an excellent new principal in Ali Hadawi, who was recently appointed a Commander of the British Empire and who turned his last college into a beacon college. I have every confidence he will do the same for Central Bedfordshire college.

The college was founded in 1961 as Dunstable college, originally with a focus on the printing trade, and most of the buildings are the original 50-year-old buildings. C and F blocks, for example, were built in 1959 and 1960. The remaining buildings were built in 1968, with the newest built in 1973, so my hon. Friend the Minister can see that they are now quite dated.

Central Bedfordshire college was one of 70 colleges that lost out under the old Learning and Skills Council’s Building Colleges for the Future capital programme. The college initially put in a £5 million proposal, but was told that that was not big enough and that it should go back and produce something grander—with an atrium, I believe. The college was encouraged to work up a more expensive proposal. It then put in a £40 million proposal, but unfortunately no one at the Learning and Skills Council was totting up the total cost of all the bids and the capital programme collapsed. Central Bedfordshire college was one of 70 colleges not to receive any capital grant. Those 70 colleges then went through a bidding process for the remaining amount of money available, and 13 were successful. I believe that, for some reason, all of them were in Labour constituencies, including a late application from Hartlepool college. This took place under the previous Government.

There were then 57 colleges left with—

--- Later in debate ---

[Mr Deputy Speaker (Mr Nigel Evans)]

I am terribly sorry about that. It is a technicality, and it is perhaps something that the Procedure Committee could look into, at its own initiative.

[Andrew Selous]

Thank you, Mr Deputy Speaker.

As I was saying, there were then 57 colleges left, of which 45 were given financial assistance to prop up their balance sheets. That left 12 colleges out of the original 70 without any assistance for capital funding under the old Learning and Skills Council regime. I believe that Central Bedfordshire college is one of the very few colleges not to have received any capital funding under the three enhanced renewal grant capital funding rounds that the new Government have introduced.

I would like to know how many colleges benefiting from the Learning and Skills Council capital grant, which was allocated under the previous Government, have received further capital funding under the enhanced renewal grant funding process. I would also be interested to know how many colleges had their ERG applications approved when they were not able to meet the match funding requirement. Central Bedfordshire college was able to meet that requirement in each of the three ERG application rounds that it put in for.

To recap, Central Bedfordshire college has put in three ERG bids. The first was in July 2010, when it requested a £1 million contribution from the Skills Funding Agency to match a £3 million contribution from the college itself. That bid was unsuccessful. The second bid, in November 2011, involved the college requesting a £2 million contribution from the SFA to match a £4 million contribution from the college. Most recently, in September 2012, the college requested £3 million from the SFA to match a £6 million contribution from the college.

The college had been led to believe that its bid would be prioritised, as it had not received even a pound in capital funding from those earlier rounds. It has had no written feedback on the bid process, although it has been told that it can attend a surgery at the SFA regional office. There is some puzzlement among the people running the college as to how all this is worked out. If the process is not helping the neediest colleges, perhaps it needs to be looked at again.

I want to go into more detail about the feedback that has been received from the SFA on why the third bid was unsuccessful. Will the Minister tell me whether the due diligence exercise that is going to take place in relation to the colleges whose bids were successful could be applied to Central Bedfordshire college, to see whether it could be awarded a few more points? I understand that the bid failed by just one point, and if we could look again to see whether any additional points could be awarded, there might be a happier outcome. I understand that the college’s education case scored the highest number of points in the whole of the eastern region, and the third highest in the whole country. I am sure the Minister would agree that the education bid is at the heart of what further education colleges should be about. I wonder whether that part of the bid should have slightly more weighting than some of the more technical considerations relating to the building proposals.

As I have said, this is the third enhanced renewal grant that the college has not been successful in securing. It has been acknowledged by officials in the Skills Funding Agency that the college is one of the neediest, if not the neediest, college in the country. In May this year, I was present when the outgoing SFA chief executive, Geoff Russell, visited Central Bedfordshire college, and he commented that the college did not need just an ERG; he would have liked to have seen a complete rebuild. Speaking as the local MP, I believe that the learners in Central Bedfordshire college deserve just as much support for creating a conducive learning environment as other students in other colleges throughout the country.

If the process is not helping the neediest colleges, we should have a look at how that process runs. I shall discuss four specific technical areas where we think the bid has lost out. The SFA commented that the refurbishment element had not been properly environmentally assessed. The primary objective of the college’s bid was to construct a new centre for hair, beauty, holistic therapies and hospitality and catering, with a focus on green technology in the curriculum and skills development. In order to achieve the new build in the optimum campus location, the college had to relocate other curriculum elements, with a small amount of associated refurbishment. The college understands that it was marked down because that latter refurbishment element did not have a full environmental assessment—unlike the main new build. That refurbishment element represented only 3.3% of the total project budget. It is simply an enabling element for the project itself, and the overall project has been environmentally assessed. The college feels unhappy about that aspect of its bid’s assessment.

The second aspect of the bid was the savings in estate costs over a 20-year period. The college was advised that other bids demonstrated larger savings over the project life of 20 years. The college, however, has come in the top quarter for national estates cost efficiency, as demonstrated by the SFA’s own data collection, which I understand is known as “e-Mandate”. That makes it hard for the college to demonstrate a huge decrease in building costs related to the bid, because it starts from such an efficient base. As a result, its savings are likely to be at a lower margin. That efficiency has been achieved by the college being very prudent and managing its projects from within its own estates department, for example. Again, the college feels that this rather crude assessment fails to take into account the efficiency point that it has already reached, even for a 50-year-old building, so it believes that it has been unfairly penalised for doing the right thing, as it were.

The third technical aspect on which the bid was marked down related to the costs of the proposed project build against the SFA’s own cost plan. The feedback stated that the bid was 10% adrift from the SFA’s cost plan norms. In simple terms, the bid comprised the following three parts. First, there is the demolition of the old F block, dating back to 1959, as I told the Minister at the start of my speech. That F block was going to be replaced with a new build centre of excellence for green catering and for hair, beauty and holistic therapies. That did fall within the SFA’s cost norms. Secondly, there is the partial demolition of the B block and the construction of a new media studies centre, together with associated works, which also fell within the SFA cost norms.

It was the third aspect that I think caused the college problems: the creation of a new surface-level car park and access road from the public highway. The project costs are required to conform to the appropriate SFA cost model for the type of college establishment. The first two elements of the bid, the demolition of the F block and the partial demolition of the B block, accorded with the SFA’s criteria. It was the third element, the car park, that did not accord with its indicative costs and is being regarded as abnormal.

The college has commented that it is required to dispose of a portion of its estate in order to release capital to contribute to the cost of the project. It has also said that the land to be disposed of currently houses a significant proportion of its car-parking provision, and that because it is not practicable for it to operate effectively without replacing that lost parking provision, it must be replaced elsewhere on the campus. The replacement of the car park and the provision of a new access road are a fundamental component of any redevelopment scheme that relies on capital release from the sale of land to the rear of the college to enable the college to make its substantial contribution to the overall project costs.

It was recognised at an early stage in the preparation of the stage C cost plan that the creation of the new car park would show the project costs at an unacceptable level of variance to the cost model, and for that reason two cost model comparisons were prepared and included. The first compared project costs associated with the B and F block works and their associated external works, and the second compared all project costs, including the creation of a new car park and access road.

The fourth element was health and safety, on which the bid was marked down. The college has said to me that the reason a significant improvement was not shown was that it had already taken care of that aspect of the bid. It had worked very hard, with its own money, to deal with all the health and safety issues that might have arisen, and not a great deal of further progress could have been made.

I hope that I have helped the Minister by giving him some feedback from the college. I hope that I have managed to explain why it feels aggrieved. In particular, I hope that I have managed to explain why the car park is necessary to the release of that significant extra contribution. The Minister has heard something of a litany of complaints, but I want to end on a positive note by telling him about the excellent things that the college is doing, notwithstanding the difficulties which I have outlined and which I hope he will be able to address when he responds.

Central Bedfordshire college is the proud sponsor of the new Central Bedfordshire university technical college, which is one of only two UTCs in the country that opened in September this year. It will have 600 students, and I am immensely proud that the only UTC in the east of England is in my constituency. It is a fantastic innovation, and it is exactly what the country needs to drive it towards a prosperous future.

Under construction in another location is the Incuba centre, a £5 million facility to help new businesses to develop Dunstable with a focus on the green economy. That is very welcome. It will help to re-energise the industrial base in Dunstable and Houghton Regis, and also the wider economy. Central Bedfordshire college is at the heart of that.

More recently, the college bought a former Volkswagen garage in the Luton road in Dunstable which it is turning into the most fantastic motor vehicle training facility. A real, live, state-of-the-art garage facility, in a building where a commercial garage was operating only a few months ago, will enable my constituents and people from the wider area to train to become motor mechanics in excellent conditions.

I know that the Minister is particularly interested in the college’s work with local employers. Again, it is doing all the things that he is asking colleges to do. It has, for instance, worked very closely with the Morrisons supermarket. I was proud to attend an event hosted jointly by the college and Morrisons. The college had provided up to 100 local unemployed people with a specific training course over the summer. If they completed it, they would be guaranteed a job interview at the new Morrisons branch that was opening in Houghton Regis. That initiative has been hugely successful. It has been excellent for the local unemployed people and excellent for the supermarket, which has really appreciated it. The college has done a fantastic thing.

The college is also working with other employers, including BAE Systems and Liebherr, engaging with them to develop an employer-tailored curriculum. It is working with Center Parcs, too, another new major provider of employment in central Bedfordshire, and with the developer of the new housing development north of Houghton Regis, which will require lots of construction skills.

It is a bugbear of mine that when there are major construction projects, the jobs often do not go to local people. It upsets me when people come in from miles around to take the jobs. Unemployed construction workers come to see me at my surgery. I am determined, as is Central Bedfordshire college, that many of the jobs created in the building of thousands of new houses to the north of Houghton Regis to help pay for the Dunstable northern bypass will be taken by local people. That is very important. CBC is at the forefront of providing the skills for the construction companies contracted to carry out that work.

The college also works with London Luton airport in delivering cabin crew and baggage-handling skills. It is working with Luton Town football club and the Bedfordshire football association to deliver coaching and football qualifications. It is also working with our local train company, First Capital Connect.

I hope the Minister will therefore see that the college has heard the Government’s message and is mustard-keen to provide the skills our local economy needs to help UK plc compete in the global race in which we are engaged. We just need a little bit of help with the capital funding. I think we have had a bit of a rough deal for a while now, but I know the Minister is a fair man, and I know he will look seriously into these issues. I look forward to hearing what he has to say.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

I congratulate my hon. Friend the Member for South West Bedfordshire (Andrew Selous) on securing this debate, which is so important for Central Bedfordshire college—for everybody who works at it and, most importantly, everybody who studies at it. I know that he raised this issue with my predecessor, and he has also raised it with me a number of times. He is a powerful advocate of the need for improvements.

I also congratulate the college on its success in opening the new university technical college. UTCs are a crucial part of ensuring we have the skills we need in the years and decades ahead. I also commend the college on the work it is doing with local businesses to provide the skills employers need, and to ensure we make good any skills shortages. Colleges across the country are increasingly working with local employers and businesses to ensure we provide the skills they need. The driving mission behind the work we are doing and behind my job is to ensure that local people have the skills they need for the jobs that are available, such as in the construction industry, as my hon. Friend mentioned.

For decades, colleges were starved of the funding for capital renewal that both schools and universities enjoyed. I know that from personal experience because I studied at a further education college—West Cheshire college—in the mid-1990s. Therefore, when the Learning and Skills Council offered significant capital grants, the colleges jumped at the opportunity. My hon. Friend set out the history of what happened. Bids were encouraged, and were encouraged to grow, and then promises were made without the funding to match them. Hugely expensive projects with poor cost control delivered very poor value for money in some of the projects that were completed. They ran out of money, and building projects were stopped, sometimes after huge expense on plans and with diggers in the ground. In that context, and in the context of the wider catastrophe that was the public finances, we are now trying to rebuild. I say that to give the background before getting on to the specifics of the case.

We have been working hard to ensure that lessons are learned from that period. One of those lessons, inevitably, is that we should have a firm and unbending eye on value for money, the physical infrastructure needs of colleges and the benefits to students that capital spending can bring. The approach is coupled with the urgency for affordability. That is the background to how the criteria for making decisions are structured.

We consult the sector on the criteria for deciding allocations. We then provide colleges with advice on the criteria, assess and moderate—and fund when an application is successful. We are happy to work with the college to develop a fundable case. I will certainly look at my hon. Friend’s point about due diligence and moderation executed on successful projects to see whether those can be applied in this case.

Since May 2010, total Government investment across the country in new colleges amounts to more than £330 million. That has enabled more than £1 billion-worth of projects. Across the whole programme, £2 of private cash have been put in for every £1 of Government cash. My hon. Friend said that that was the case with Central Bedfordshire college’s bids, too.

Let me go through some of the specifics of what has happened in the three rounds of renewal grant that have been set out so far. The first is that we have had 117 bids for college funding, which would have cost in excess of £200 million if all had been approved. I entirely understand my hon. Friend’s argument about the quality of the buildings at the college—60% of its buildings are in poor or inoperable condition. I am sad to report to him that, of the 240 general further education colleges across the country, 59 are in a worse state on this measure than Central Bedfordshire college. Although the college has a high level of need, such need, unfortunately, is replicated in some colleges across the country.

The first criterion relates to the condition of the existing estate; Central Bedfordshire college has a case, but there are other colleges with a worse rating. The second criterion is value for money, and my hon. Friend reported the concerns raised about that issue. I entirely understand his point that, having done work to ensure good value for money in respect of running costs, the college feels penalised. He will understand that value for money has to be a critical part of our assessment. I give my hon. Friend this commitment: we will work with the college to see what can be done to improve the value for money in the bid. The third criterion is the benefits that would flow from the work as planned. In that area, as he stated, Central Bedfordshire college did relatively well.

On my hon. Friend’s specific questions, 10 colleges got funds without match funding, but they offered much stronger value for money and benefits in the rest of their bids. Of course, the amount of match funding is a critical part of the question, but it is not the only element of value for money. Only one college in the third round of the enhanced renewal grant had received serious amounts of money since 2001. A very strong emphasis was placed in these bids on those colleges that have received less than £5 million since 2001, and in the third round only one college, Barnsley college, had received more than that since then. By contrast, Central Bedfordshire college had received £450,000 since 2010, including £225,000 in the first round, £100,000 in the second round and £120,000 to help work up the bid for the third round. We are going to have to work with the college in future to see what further we can do to try to get it over the line.

My hon. Friend asked about written feedback, which will, of course, be provided. Earlier this month, the college, including the principal, met civil servants for oral feedback, but we will also provide written feedback.

On my hon. Friend’s point about rebuild, I am tempted not to recommend that we again go down the route of suggesting yet more expensive propositions for the college, but we should keep all options on the table. On the point about the education case being the best in the east of England, I am glad to say that these things are no longer done on a regional basis and are instead done on a national basis. The college scored well in that area.

As my hon. Friend said, the college scored 21 out of a possible 39 points in the process and was just one point short of the score deemed necessary to secure funding. There is broad agreement that the process was carried out on a fair, open and competitive basis; the process was agreed in consultation with the sector. Even so, an appeals process is available for colleges that feel they have been hard done by. I entirely understand his disappointment and I commend the pressure he is applying.

[Andrew Selous]

The Minister may not be able to do this now, but will he respond, perhaps in writing later, on the issue of the car park? It seems that the bid was marked down severely on that basis, and I want to check that he has understood the point I was making about the car park being essential for the release of a significant sum of the college’s own money in order to match-fund.

[Matthew Hancock]

I understand the point about the car park, and I will look into it and get back to my hon. Friend on the specifics. I am sorry to say that I cannot give him a clear and specific answer today, but of course I will be happy to work with him to see what we can do in the months ahead. As and when details of any future capital funding are made available, we will work with the college. I understand, not least as a result of his lobbying, the important role the college plays in the community, what it is doing to support young people and the needs that it has. We will look carefully at, and work with him on, future propositions. I hope he will accept that and that we can move forward.

Question put and agreed to.