City of Glasgow College has been given the green light to invest nearly £200 million in a state-of-the-art campus in the heart of the city.

Support from the Scottish Funding Council will bring together more than 40,000 students and 1,200 staff from Scotland's largest college onto two city centre sites, significantly modernising the college estate.

Education Secretary Michael Russell said: "The Scottish Government is consulting on wide-ranging plans to reform post-16 education, including encouraging greater collaboration and regional models of funding for colleges. Glasgow is ahead of the game and the new City of Glasgow College is providing benefits for staff, students and the local economy.

"Planning for the new buildings has been in the pipeline since three colleges in the city merged last year and I am very pleased to be able to commit to providing up to £193 million funding from the Scottish Funding Council to ensure the project becomes a reality and provides further benefits.

"Students and staff alike will relish being based in buildings of the highest quality and I look forward to hearing about how the new campus is coming together."

Cabinet Secretary for Infrastructure and Capital Investment Alex Neil added: "Substantial funding for the City of Glasgow College is vital for Scotland's economy, demonstrating our commitment to invest in infrastructure despite Westminster cuts.

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"City of Glasgow College is an important part of our programme to stimulate growth and support jobs, and will be delivered through the Non-Profit Distributing model, which delivers better value for taxpayers than PFI.

"Shortly, the Scottish Government will publish its Infrastructure Investment Plan, detailing our proposals for key projects across Scotland. Today's announcements should indicate our intentions - delivering maximum value for money, for the maximum benefit of our people and our economy."

Mark Batho, Chief Executive of the Scottish Funding Council, said: "Today is another important step forward in providing modern, well-designed and inspired new campuses for the next generation of learners. This adds to a portfolio of Funding Council investments that has seen over £500m spent since 2000 with new build or major improvements in estates at 23 colleges."

Paul Little, City of Glasgow College's Principal, said: "This is a very welcome announcement as well as a strong vote of confidence in the new college from the Scottish Government, especially at this time of significant Reform within the college sector. The City of Glasgow College, the largest now in Scotland, has the capacity to significantly boost the life chances of tens of thousands of students and make a major contribution to the economy of both Glasgow and Scotland.

"I'm extremely pleased and privileged to be part of this once in a lifetime project and I would like to pay tribute at this juncture to the former Chairman Eric Tottman-Traynor, and our highly talented Staff team."

The City of Glasgow College was created through the successful merger of three former city centre colleges in September 2010. With the procurement process now approved, construction of the new campus is expected to begin in 2013.

Total investment figures are based on up to £193 million from the Scottish Funding Council with a further £5.67 million being invested by the College.

The Scottish Government's innovative Engage for Education site allows users to read blogs from Ministers, post comments and get involved in workshops on issues relating to education.

(GK)