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Contractors on the stalled Learning and Skills Council programme to renew further education colleges are being told to cut prices or risk being thrown off projects.

The cost-cutting drive emerged as John Denham, the skills secretary, revealed that the council had received bids for 拢5.7bn of funding from colleges 鈥� double the 拢2.3bn the government has made available up to 2011.

One contractor said: 鈥淲e鈥檝e been told that if we can鈥檛 come up with a reduction of about 10%, they鈥檒l put our scheme out to tender again. I think the colleges are under pressure to reduce prices if they want funding.鈥�

Eight schemes, involving 拢300m of public money, were told to resume work this week, but 144 others are on hold and have to justify their funding requests.

The eight are in west Kent, Stoke-on-Trent, Coulsdon in Surrey, Liverpool, Solihull, Northampton and two in Bolton.

The government will announce the other schemes that will go ahead at the end of the month, after completing an assessment, but the scale of the demand means it is likely that only half will go ahead in the present spending review period, due to end in April 2011. Denham acknowledged this week that 鈥渋t is clear that not all schemes can be implemented on the timetables originally envisaged鈥�.

It is understood that some of the schemes on hold had reached site. These include an extension to the Colchester Institute being carried out by Willmott Dixon, and Abingdon and Witney College in Oxfordshire, being carried out by Leadbitter, where students are in temporary classrooms.

The debacle surrounding the programme, which was put on hold in January, is widely accepted to be the result of mismanagement. One source close to the programme said this week that some colleges, having been encouraged to be 鈥渁spirational鈥�, had submitted 鈥渉ugely ambitious鈥� bids for up to 拢200m of funding. The source said: 鈥淭he amount of bids from the South-east alone would have eaten up the funding allocation.鈥�

The government is still struggling to work out a system for prioritising projects. The LSC and Cabe are discussing ways in which it could help colleges to deliver their buildings.

The bids from the South-east alone would have eaten up the funding allocation

Programme source

鈥� An Official Journal notice has gone out for a 拢4bn framework to build 好色先生TV Schools for the Future academies.

Some schemes still on hold

North Devon College

This in the design by Feilden Clegg Bradley for a 拢125m new college on the banks of the River Taw in the centre of Barnstaple to which the old college will relocate. This 34,000m2 building would be the largest infrastructure development in north Devon.

Basford Hall College, Nottingham

The 拢57m development was to replace the existing college. Construction would be among the subjects taught there and the building would include solar panels, wind turbines and rainwater recycling facilities.

Abingdon and Witney College, Oxfordshire

Work on Abingdon and Witney College in Oxfordshire has stalled. Now the students and staff are working out of 57 cabins. The college is paying 拢40,000 a month out of staff salaries to hire the temporary structures.