SCOTLAND'S 47 further education colleges began to see the first fruits of the Government's extra millions this week. The Scottish Office announced a 13.8 per cent funding increase in a complex pound;329 million settlement which makes interpretation more difficult than usual.
Donald Dewar, the Secretary of State, described the package as "much more than an annual funding allocation - it is nothing short of a funding revolution".
Every college will receive money for extra student places, to invest in infrastructure and to spend on information and communications technology, Mr Dewar claimed. Total FE expenditure is planned to rise to pound;394m by 2002.
However, the Scottish Office is not ruling out further financial crisis of the kind that has hit Clydebank, Inverness and Reid Kerr colleges (FE Focus, page 32). The quality of college managements is "variable", it concedes. "Ministers don't envisage 47 individual institutions lasting forever and a day," one source said.
The Education Minister has already ordered the Further Education Funding Council to make its first task a review of college management. The council takes over full responsibility for FE on July 1 and it will have the power to vary, but not increase, the settlement announced this week.
The figures represent an increase of pound;38m for the financial year beginning in April, but the total FE grant that is shown as allocated to individual colleges so far is just over pound;314m.
The pound;15m difference between that sum and the pound;329m total will go to specific projects, such as pound;3m for the colleges which are part of the University of the Highlands and Islands. Sums have also been held back to meet contingencies.
In addition the council has been asked to apply pound;3m to what Mr Dewar described as "the key priorities of collaboration and rationalisation, extending FE availability into areas where provision is currently limited and promoting innovation".
The actual recurrent grant which will go to meet colleges' running costs is only pound;247m of the total, although that represents a 9 per cent increase from the current year's pound;225m. The gap with the total recurrent grant of pound;253m is made up of a pound;3.9m "quality fund" (increased from pound;2.3m) tied to student achievement, and just over pound;2m for minor capital works.
Officials say the grant includes part of the pound;56m promised over three years to inject stability into college funding.
But the recurrent grant must also fund growth. The figure includes pound;8m for 8,000 extra places in colleges in the coming year, part of the drive to increase FE student numbers by 40,000 over three years.
These additional places are designed to attract more students from under-represented and disadvantaged groups. Some 40 per cent of the new enrolments are expected to come from the 20 per cent of areas that are most deprived, chosen by postcode.
Bursary expenditure is set to rise by pound;3m to pound;47m, partly to support the extra students. But the safety net that cushioned colleges most heavily disadvantaged by the FE funding formula has been removed.
The gradual phasing out of the fixed sum awarded to all colleges to pay for their overheads and designed to protect the smaller colleges is also continuing. The original figure of pound;250,000 per college was reduced to pound;200,000 last year and will be pound;120,000 in the coming year.
Although no colleges have received less in cash terms, there are major differences between the pound;2.2m increase for Aberdeen and the pound;120,000 extra for the Barony College.
Leader, page 14