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In 2001, the newly established Learning and Skills Council (the Council) took over a programme of capital works in the further education sector, to renew an estate that was too large, with much of it in poor condition and no longer fit for modern educational purposes. By March 2008, a total of £4.2 billion of projects had been approved 'in detail', including grant support from the Council of £1.7 billion, and about half of the estate had been renewed. Since April 2008, there has been a very serious failure in the management of the programme. It approved 'in principle' 79 colleges' projects, which required nearly £2.7 billion of Council funding more than it could afford. Before the current problems arose, the programme had achieved some successes, enabling the estate to be reduced in size, and the buildings are generally of good quality and are contributing to increased learner participation. The economic downturn could affect colleges' ability to fund projects by restricting their access to loan finance or their ability to sell surplus assets. The indebtedness of the sector is rising. The Council needs to monitor closely the financial health of some colleges, particularly those that have borrowings that exceed 40 per cent of their annual income. In 2010, the Council is expected to be dissolved and its functions taken over by the Skills Funding Agency and the Young People's Learning Agency. There needs to be clarity about responsibilities for the capital programme, and additional administrative burdens on colleges must be avoided.
The 2012 Civil Service Reform Plan (the Plan), published in June 2012, outlines plans to transform the civil service so that it is sharper and quicker, more delivery-focused, and has sufficient commercial, digital, project and change management skills. The Cabinet Office is responsible for overseeing implementation of the Plan. The Committee hope that the reforms and enhanced capabilities will help prevent the failures in project and programme delivery it has seen so often, but is concerned, however, that government has not set itself objective measures for assessing the impact of its reforms. If the public is to have confidence in the system for holding permanent secretaries accountable, the Government must be clear about the detail of what each permanent secretary is expected to achieve and how their performance will be assessed. Commercial and contracting skills in the civil service remain weak and underdeveloped, despite the many attempts to address this skills deficiency in recent years. Efforts to fill skills gaps are hindered by real or perceived barriers to recruiting people with the necessary expertise and paying them enough. The process for overseeing major projects lacks real teeth and is seemingly unable to stop ill-conceived or poorly-managed projects. Yet the Government will only be successful in cutting public spending with minimum impact on frontline services if it finds new and innovative ways to deliver its programmes. This innovation can only be implemented if the Civil Service has the necessary skills and competencies.