And although it is not its job to investigate individual cases, a number of well-publicised scandals will inform its inquiry.

Paula Lanning of NATFHE, the lecturers’ union, said she was concerned that some colleges were removing or paring down staff and student representation on their boards of governors.

The union has already sent its evidence to Lord Nolan. It believes that there should be a great deal more openness and a fundamental overhaul of the decision-making procedures in colleges. It is also concerned about the under-representation of women on corporations and the “minuscule” involvement of ethnic minorities. The union became embroiled in a row at Huddersfield New College after it was alleged staff had been excluded from the membership of the corporation.

While the National Audit Office gave a largely favourable report of the FE corporations, a number of cases have caused concern. Bournville FE college management called in the police after discovering that Pounds 140,000 had been paid out to four franchise providers for non-existent courses. Contracts for almost Pounds 1 million were immediately cancelled.

At Derby Tertiary College, Wilmorton, Professor Michael Shattock of Warwick University was called to investigate mismanagement. He said while he found no fraud, there were “conditions in which fraud and malpractice can flourish”. Its principal, Andrew Stromberg, was called “impetuous, arbitrary and abrasive” while the governing body “failed the basic tests of acting in the public interest”.

Gillian Shephard, the Education and Employment Secretary, removed all but two governors at the college. Nine of them were also required to return Pounds 16,760 in improper allowances.

The collapse of South Thames TEC with Pounds 7 million debts, making private training providers bankrupt and leaving thousands of young unemployed without places is another case that Nolan will be aware of.

Grant-maintained schools are also monitored by the National Audit Office. The NAO found that many schools did not have an up-to-date register covering the interests of their key financial staff. It also found that procedures in some schools for handling money did not entail checks to prevent financial impropriety, although there was no evidence that it had occurred.

The Nolan committee has established seven principles which it suggests as a basis for public service. The list, almost quaint in a Baden-Powell sort of way, comprises selflessness, integrity, objectivity, openness, honesty, accountability and leadership.