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College private finance plans rubbished

Colleges will struggle to attract private finance to rescue their stalled construction projects due to their tight revenue margins, according to UK Contractors Group director Stephen Ratcliffe.

Mr Ratcliffe said attempts to secure loans for colleges were doomed as the institutions could not afford to service the debts.

He said: “While there is finance available, the real problem is the colleges being able to borrow large sums of money due to their revenue constraints and the expectation of their margins being squeezed in the future,”

The Learning and Skills Council is funding just 13 further projects through the Building Colleges for the Future scheme this financial year. Another 58 were given approval in principle before the delivery body ran out of cash earlier this year.

The LSC is working to help these colleges secure finance from other sources to get their projects off the ground.

Meanwhile, the Public Accounts Committee earlier this week called for handfuls of college jobs to be bundled into single contracts to attract private finance. Its report, Renewing the Physical Infrastructure of English Further Education Colleges, also said secondary schools work could be included in such packages.

But Mr Ratcliffe warned that there seemed little hope of colleges securing such finance if they had to pay it back from their own revenue streams.