Book excerpt: 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.