The Building Colleges for the Future programme is to be reviewed by a Government appointed troubleshooter as worries increase over whether new projects will go ahead.
Funding body the Learning and Skills Council (LSC) has postponed decisions on 20 college projects until March due to worries over securing private funding to support the schemes. The LSC insists there is no freeze on the programme.
Skills Secretary John Denham and Chris Banks, chair of the Learning and Skills Council, have now appointed Sir Andrew Foster to lead an independent review into the operation of the programme which covered refurbishment and new building at further education and sixth form colleges.
Sir Andrew, former chief executive of the Audit Commission, will assess existing LSC processes and consider how they can be improved to deliver more effective management of the programme in the current economic environment.
He will submit a provisional report in February with formal recommendations expected in April.
LSC chairman Chris Banks said: 'The hugely successful FE Capital programme has seen nearly 330 colleges, and 700 projects benefit so far.
'Only 42 colleges have yet to benefit from investment. The success of the programme to date has raised the ambition of the sector, with growing numbers of colleges looking to increase available opportunities for learners and employers alike. This, in turn, has led to an increase in demand for capital funding.”
Skills Secretary John Denham insisted that the Government had brought forward £220million from future budgets to bring forward building work and pointed out that more than 250 projects were currently underway.
The Government claims the problems have emerged from the increasing demand for funding by colleges alongside with a growth in scale and ambition for projects.
However, this has come at the same time as a decline in the ability of colleges to raise their own funds to help pay for proposed schemes due to the downturn.
This is because many proposed schemes rely on either the sale of land or other assets and on the ability of colleges to gain financial support from the banks.
As a result the LSC has insisted on working closely with colleges that intend to submit bids to look at the individual current positions before making further funding decisions.
This led to the consideration of a small number of applications that were due for decision - both in principle and in detail - being deferred from December to March.