In July 2009, the Public Accounts Committee described the LSC's handling of its college building programme as 'catastrophic mismanagement'. It resulted in a £2.7 billion debt, with 144 college building contracts having to be terminated abruptly, and leaving many colleges with huge financial penalties for breach of contract with civil engineering companies. 23 colleges have debts of more than 40% of their annual income, with some facing possible financial collapse. The re-building programme had renovated over half of England's colleges since 2001.
Abolition
On 17 March 2008 the abolition of the LSC was announced; funding responsibilities for 16- to 19-year-old learners were to transfer to Education Funding Agency and the Skills Funding Agency, which was created to distribute funding for adult learners in Further Education colleges. The Machinery of Government announcement heralded the end of the LSC, to make way for the Young Peoples Learning Agency and the Skills Funding Agency, reporting to DCSF and BIS respectively. These changes started in April 2009 and were completed by March 2010.
Mark Haysom's resignation
CBE, the second chief executive of the LSC, announced that he was stepping down from his role on 23 March 2009 - taking accountability as Chief Executive for difficulties that the LSC had encountered with a college rebuilding programme. He was replaced by Geoff Russell, formerly of accountants KPMG.
The LSC had a national office in Cheylesmore House, Cheylesmore, Coventry, nine regional offices and 47 local Learning and Skills Councils. The LSC's national office was not a typical headquarters - its main role was to produce guidelines and targets for its 47 local offices. It was announced in 2005 that the LSC's organisation structure would change as part of the Agenda for Change programme, creating a streamlined configuration with more focus on the regional dimension. Although management and administration has been restructured on regional lines, the 47 local Learning and Skills councils were retained.
Redundancies
Around 1,300 jobs were lost, 500 from the Coventry headquarters, the remainder from local offices. The restructuring process was challenged by the PCS Union, with a strike that took place on 28 April 2006, and a work-to-rule commencing in May 2006. The work-to-rule ceased on 26 June 2006 after PCS and LSC representatives reached agreement.
Staff
During its lifetime the LSC had three chief executives: John Harwood, Mark Haysom and Geoff Russell.
Former leader of the CBI, Sir Digby Jones, was critical of the LSC during his time as the UK government's skills envoy. Speaking of the LSC management and outcomes, he said: "It is what I call the British Leyland model - you put a lot of money in at the top and an Austin Allegrocomes out at the bottom. The money has not been spent in the right way and it is not delivering what the employers want." There has also been significant press criticism for its handling of EMAs, Capital, Adult funding and numerous other areas of work especially by its own staff over its handling of various restructures and more recently its closure and transfer of powers to the 2/3 successor bodies and 150 Local Authorities