Page last updated at 12:54 GMT, Monday, 23 March 2009

College funding fiasco boss quits

Barnsley College
One of the affected colleges is in a state of demolition

The head of the government agency that funds colleges in England has resigned.

Mark Haysom, chief executive of the Learning and Skills Council, presided over failures in college rebuilding and, last year, learners' allowances.

He gets six months' salary of £104,000 in lieu of notice but foregoes any bonus and an extra £250,000 he would have been entitled to receive.

Colleges say they face losing more than £170m because of delays in getting funding for refurbishment.

The skills council's chair, Chris Banks, said upon accepting the resignation: "It is typical of Mark to want to take personal responsibility, as chief executive, for the difficulties we have experienced with our further education capital programme."

'Tremendous success'

He has appointed Geoff Russell, formerly of accountants KPMG, as acting chief executive.

There have been failures in the way that the LSC has managed the programme
Ex-chief executive Mark Haysom

Mark Haysom said in his resignation statement that he was proud of the LSC's achievements as "a positive force for good and a tremendous success story".

"It has helped to change the lives of millions of learners in communities up and down the country."

The LSC has consistently portrayed the college rebuilding scheme as a victim of its own success.

But colleges say it has led them to expect approval and money for far more projects than it has funding for from the government.

'Others involved'

Mr Haysom said: "Thanks to the investments we have made on behalf of the government we have been able to change the face of further education in towns and cities across England.

"It is then with huge regret that I have reached the conclusion that, because of the well-publicised difficulties with that programme, I should now announce that I am stepping down from my role as chief executive."

Government trouble-shooter Sir Andrew Foster is conducting an urgent review of the situation.

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.

"No matter where those mistakes have been made and no matter how many people have been involved in the capital programme, as the chief executive of the LSC I am, of course, finally accountable. That is why I have made my decision to step down at this time."

Allowances delayed

The college rebuilding programme hit the headlines not least because news that projects were being put on hold by the LSC emerged shortly after Prime Minister Gordon Brown said he was accelerating capital works in the public services to counter the recession.

But the LSC also made news last year because of delays in getting education maintenance allowances to teenagers from lower income families in England, causing them difficulties in joining or staying on college courses.

Skills Secretary John Denham said he fully understood Mr Haysom's decision to resign, given the significant problems with the Building Colleges for the Future programme.

"The programme has been a major success in transforming the FE college estate and it is vital that clarity and confidence are restored as swiftly as possible," he added.

His Conservative shadow, David Willetts, said responsibility ultimately lay squarely with ministers.

"Getting someone else to take the rap is a classic device, but John Denham cannot escape responsibility for this mess."

The president of the Association of Colleges, David Collins, said it had been inevitable that heads would roll at the LSC given the amount of mismanagement at a national level.

Colleges had received assurances from ministers that none would be allowed to go bankrupt, but he urged the government to provide additional cash to get as much of the rebuilding programme as possible back on track.

"Colleges have already spent something like £220m in progressing their projects under LSC encouragement from the initial approval stages through to the final approval and are left really holding the baby," he said.

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