AN �80million redevelopment project which would have created scores of new jobs has been scrapped because of a Government quango's funding crisis, it emerged last night.

AN �80million redevelopment project which would have created scores of new jobs has been scrapped because of a Government quango's funding crisis, it emerged last night.

The Learning and Skills Council (LSC) had pledged nearly �60million to a wholesale rebuild of the West Suffolk College campus in Bury St Edmunds and planning permission for the scheme had already been granted.

But a letter has now been sent to college bosses from the LSC telling it the cash pledged was no longer available. It means the scheme, which had been due to start later this year and involved knocking down all but three buildings on the campus, will not take place.

Instead, the college, which has �20million of its own money and bank loans to play with, will go back to the drawing board and draft a new much more modest scheme for the site in Out Risbygate.

Deputy principal David Howells said he was disappointed at the news and said it came as the college was expecting record numbers trying to enrol for courses for the new academic year.

“I've had a call from the regional director telling me we are not being invited to continue to work on our plans. It is a shame we can't do what we wanted but we have got things we can do.”

He said the college faced two additional challenges in the coming academic year. The first was an expected increase in the number of 16-year-olds applying to study because of a jobs shortage. The second was a shortage of companies willing to take on college apprentices, again because of the downturn.

John Griffiths, leader of St Edmundsbury Borough Council, said: “Obviously this is extremely disappointing news. However St Edmundsbury will continue to support and work with the college to make the best of the current circumstances.”

Bury MP David Ruffley said: “The Government and the LSC have utterly failed to understand the vital educational provision West Suffolk College supplies not just to the town of Bury St Edmunds but the surrounding rural areas.

“I wrote to the Secretary of State at length on April 29, pointing out that West Suffolk College covered areas that could not possibly be covered by other colleges, which are simply too far away from where my constituents live. I'm appalled that the Government have not taken any of this into account. Government mis-management of funding is entirely to blame.”

In a ministerial statement, Keith Brennan, minister for business, innovation and skills, said: “Mistakes were made by the Learning and Skills Council in carrying out the FE (further education) capital programme.

“There is now new leadership to the organisation and measures in place to ensure that there will be no repeat of those mistakes as the programme moves forward.”

A spokeswoman for the LSC said only 13 schemes nationally would be funded this year and West Suffolk College was not among them.

She said: “For colleges which have not been selected to proceed this year, the next steps will start this autumn when we will further consult with the sector to agree a robust, fair and transparent process for prioritising the capital investment programme for the next spending review period starting in 2011/12.”