Grimsby Institute of Further and Higher Education has won the right to challenge the way that the LSC handled college funding, after the council announced it could fund only 13 of the 79 projects that had achieved first stage approval.
The LSC has confirmed that Grimsby Institute has been granted permission to proceed with an application for a judicial review regarding its capital build bid. The matter is likely to be listed for a full hearing within the next two months.
Grimsby Institute vice principal Rodger McCracken said its main grounds for review are that the LSC did not say that funding was running out, or tell the colleges to downgrade their expectations or advise them to carry on at their own risk.
"If at the time everybody had been told we had a one-in-five chance of funding, how many colleges would have done what they did?" McCracken said, referring to the abortive costs in making the bids.
The institute has also argued that the LSC had the opportunity to refund the abortive costs, but chose to use the remaining £300m of available funding to proceed with the 13 projects.
"They could have refunded all of the sunk costs from £300m and still had £70m left," said McCracken.
Grimsby's plans envisaged a total project cost of £139m, but it had incurred preparatory costs of £3.7m, including professional and planning fees and the cost of enabling works.
It has been estimated that colleges making the bids accumulated preparatory costs estimated at £230m, but most seem to have missed a three month deadline to make an application for review.
Association of Colleges assistant chief executive and director of research and development Julian Gravatt, said: "We issued advice to colleges on their legal options in both April and July. I know a lot of colleges consulted their lawyers about their options but the cost and evidence requirement in terms of pursuing a case probably dissuaded a lot of colleges from going down the route that Grimsby have gone down."
