Letters confirm no prospect of imminent unblocking of £2.5bn-worth of projects

The UK Contractors Group has written to cabinet ministers in an attempt to secure a senior intervention to kick-start £2.5bn-worth of stalled college work.

The UKCG wrote to chancellor Alistair Darling, business secretary Peter Mandelson, education secretary Ed Balls and skills secretary John Denham saying that the stalled programme risked 40,000 sector jobs.

In addition the letter confirms that the UKCG has been told by the Learning and Skills Council that no more money is available during the current spending review period, which ends in 2011.

The letters said that construction output would fall by 10% this year at best, but that without government spending on projects including the colleges programme, this fall could be “considerably worse.” They described the college programme as a “complete shambles.”

They said: “At a meeting earlier this week, the LSC confirmed to us that money has run out and no further projects can be approved during the current CSR period. In short, there will be a two-year gap in the pipeline of investment - this puts 79 projects worth £2.5bn on hold indefinitely.”

The Learning and Skills Council, which administers the programme, was earlier today reported as denying that the money had definitely run out. A review is being carried out by former Audit Commission chief executive Andrew Foster, which is due to conclude at the end of April. The LSC was reported as saying money could become available after the publication of the review.

An LSC spokesperson was not immediately able to clarify when asked about the matter by Building.

The letters added the delays were a “grievous blow” to the industry and could threaten 40,000 jobs. They also echoed up estimates by social housing lobbyist the 2020 Group, that 450,000 jobs could be lost in the industry as a result of the recession.