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Industry training centre Constructionarium is on the verge of securing funding to create a permanent base in Norfolk.

The East of England Development Agency has given provisional approval for a grant of about £500,000 to enable it to build facilities at Bircham Newton near King's Lynn, the location of the CITB-ConstructionSkills headquarters.

The scheme gives engineering undergraduates practical experience of construction by working on scaled-down versions of international projects. The funding will mean that Constructionarium can simulate environments such as lakes, drydocks, mountains and rivers.

The move comes as consultant engineers Amec and Mott MacDonald promised to supply staff and assistance for the scheme, which is supported by Shepherd and co-founders Arup and John Doyle. Contractor HBG and Buro Happold are interested in joining the scheme.

Stef Stefanou, the chairman of specialist contractor John Doyle, said: "If we are to recruit graduates we owe it to ourselves to help in rounding out their education. The initiative has gathered a huge amount of momentum.

Practice makes perfect: Engineering students working on projects at the Constructionarium

Imperial College and Leeds and Manchester universities have made it a requirement for every undergraduate to attend Constructionarium or a similar initiative."

The scheme, which has been running since 2002, gives students the opportunity to get involved in practical construction processes by building scale replicas of projects. Technical directors from participating consultants and contractors supervise teams of students working on the projects, advising them on construction techniques, safety training and cost monitoring.

The initiative has gathered a huge amount of momentum

Stef Stefanou, John Doyle

Rob Smith, Shepherd Construction's technical director, said the experience students gain at Constructionarium was invaluable. "They are experiencing a high level of responsibility that they might not otherwise get for several years after leaving college when they would tend to be quite office-based."

Meanwhile, it has emerged that the National Construction College, a more mainstream training centre on the same site, could be forced to cut up to 150 jobs and close some facilities if it loses a planning appeal to redevelop the parts of the training centre that house the CITB-ConstructionSkills head office.

It had intended to raise £15m for the upgrade by developing 250 homes on an unused area of the site but a planning application has been rejected by King's Lynn and West Norfolk council. The NCC is to appeal next month.

The government's further education white paper promised £25m of extra funding to allow under-26-year-olds free tuition in NVQs such as construction.

The white paper, which aims to encourage more people to stay in education to undertake skills-based training, also allocates £11m to fund weekly maintenance allowances for low-income adults studying NVQs. In addition the government has included measures to expand work-based training in line with employers' needs.

Launching the paper on Monday, education secretary Ruth Kelly, said: "Improving the skills of young people and adults is one of the biggest strategic challenges facing our country."

Sir Digby Jones, the director-general of the CBI, welcomed the proposals. He said: "Ensuring colleges focus on the needs of employers will help banish the identity crisis about their role they have suffered."