Higher Education Institutions (Hansard, 26 March 1996)

§ Mr. Forth

For many years, universities and colleges of higher education have enjoyed freedom, within specified limits agreed by the Secretary of State, to retain the proceeds of sale of Exchequer-funded land or buildings, without reference to the annual appropriation procedures. The purpose of these arrangements is to help institutions to make the most economic and efficient use of their land and buildings, with the objective of rationalising and disposing of those assets which institutions consider in the light of their strategic plans no longer to be needed.

Following consultations with the Higher Education Funding Council for England, my right hon. Friend is satisfied that these arrangements have enabled higher education institutions in England to make effective use of their estates and that it would be appropriate to consolidate and extend them.

Accordingly, the conditions attached to the disposal of Exchequer-funded land and buildings have been incorporated in a revised control framework designed to allow institutions greater flexibility to manage their own estate without the need for detailed vetting of every individual project. These conditions are among those set out in a revised financial memorandum between the Department and the HEFCE. Higher education institutions will be informed of the new arrangements in a model financial memorandum between the HEFCE and individual institutions.

The Government are still considering the relationship between the private finance initiative and controls on the disposal of Exchequer-funded assets. The new provisions for reinvesting the proceeds of sale of such assets do not take into account the full range of circumstances in which institutions might wish to procure assets or capital-related services under innovative PFI schemes. In consequence, there will be a need for special flexibilities to operate in some PFI cases. The Government will consider sympathetically requests for exceptions to the disposal provisions, on a case-by-case basis, in order to ensure that there are no financial disincentives to institutions seeking value for money through PFI schemes.

Copies of the Department's financial memorandum with the HEFCE and the model financial memorandum between the HEFCE and institutions will be placed in the Library.