The Learning and Skills Council is delaying allocating £200m of funding for stalled college projects because of a legal challenge over its handling of the building programme, writes Sarah Richardson

Colleges have been waiting to hear how the £200m – the only funds remaining for capital works for the next four years – will be allocated, since the £5bn Building Colleges for the Future programme was officially halted last summer. However, David Hughes, the LSC’s national project director, has now admitted that concern over the outcome of a judicial review into the LSC’s handling of the scheme, brought by the Grimsby Institute, is contributing to the delay.

Speaking at the Westminster Education Forum, Hughes said: “We’re in discussion with the government trying to get agreement about how to allocate the funds. I think there will be a decision shortly, but there is a nervousness because of the judicial review.”

It is understood that no date has been set for the review, but it is expected to proceed before the summer.

In a separate move, the LSC confirmed this week that it would make £34m available to compensate colleges for money spent on halted building work – although this is less than 20% of the total amount spent.

There will be a decision, but there is a nervousness because of the judicial review

David Hughes, LSC

Speaking at the Westminster conference, Jeremy Wilson, of Drivers Jonas Deloitte, estimated that it would cost about £8bn to renew the parts of the college estate that have not yet benefited from the programme.

Colleges will come under further financial pressure within weeks when the LSC is expected to announce steps to achieve zero-carbon colleges by 2016.

Paul Duncan, a director at WSP, said: “It will be challenging because to get to zero carbon there needs to be a step change in terms of sharing resources like combined heat and power with the local community.”