“Thinking you understand what all this means is the first sign of madness,” a principal told FE Focus as the latest confusion over the further education funding system came to light in January.

Principals were reporting that the already labyrinthine routes through which money makes its arduous journey from Whitehall coffers to colleges was being made ever more bizarre by the inadequate computer software that deals with their funding claims.

But while principals were questioning their sanity, sixth-form college lecturers at last had cause to celebrate. They signed a pay deal which closed the gap with schoolteachers, giving them their biggest wage rise for a decade.

In February, David Bell, head of the Office for Standards in Education, published his first annual report to include the performance of colleges.

It was not good news for further education. He said one in five colleges was performing so poorly it would be in special measures if it were a school.

But he conceded the sector had been placed under pressure by the effects of incorporation in 1993.

Alan Cowood was dismissed from his job as a health and safety lecturer after going public about alleged financial irregularities at Grimsby College being investigated by the Learning and Skills Council.

He won his employment tribunal but decided he would rather stick with his new career, as a long-distance lorry driver.

The much-loved Workers’ Educational Association, the charity which brought adult education to the masses, became 100 years old this year. But in March, the mood was less than celebratory as a rescue plan was put together by the LSC after the charity announced it had spent pound;3 million more than its income over two years.

Andrew Malaulo, the charity’s senior accountant, had been convicted of stealing pound;387,500 the previous year. The money was recovered but poor financial management still put the organisation in the red.

David Sherlock, head of the Adult Learning Inspectorate, suggested college governors should be paid for doing a job which would bring a company director an income of pound;150,000 a year. Ministers revealed they are seeking a celebrity to head up a national “Oscars” scheme for college staff.

And in April, as if governors had not had their egos boosted enough by David Sherlock, more was to come as they found themselves compared with God. John Carver, US governance guru, gave a presentation to the Association of Colleges in which he urged them to take more collective responsibility, saying “when they speak as a group, God is speaking”.

Education Secretary Charles Clarke admitted his department had taken “a real bloody nose” over the individual learning accounts fiasco after a catalogue of errors of judgment was outlined in a report by the Parliamentary Ombudsman. Not as bloody as the noses of private training providers who lost money. The Department for Education and Skills insisted that they had got involved at their own risk - so there would be no compensation.

Plans for the long-awaited and repeatedly-promised replacement for ILAs were quietly shelved.

In May, the Government’s commitment to increase participation at post-19 suffered a setback when it was revealed that the number of adults in education has fallen to levels last seen under the Tories.

The National Institute for Adult Continuing Education called for 3 per cent of the post-19 spending to be earmarked for adult courses that fall outside the Government priority areas.

Natfhe was preparing for its annual conference in Blackpool amid growing concern that the Government’s plans to get 14-year-olds into colleges will leave lecturers flooded with unruly children. Dan Taubman, national colleges official for the union, said behaviour was the issue brought up most by members when discussing the growing numbers of schoolchildren in colleges.

One lecturer in the conference hall protested that the presence of schoolchildren made their college feel like “Grange Hill”.

In June, the LSC bureaucracy-busting task force, a committee chaired by Sir George Sweeney, set up another committee. Sir Andrew Foster, comptroller of the Audit Commission, was named as chairman of the new body, which will carry out a review of red tape and report to ministers.

Colleges heard they would be able to hang on to millions of pounds as the LSC eased up on clawback - the system of removing funds for courses that fail to meet recruitment targets.

An LSC survey leaked to FE Focus revealed only 14 per cent of staff at the quango thought it was doing a good job at managing change.

Meanwhile, at Nottingham’s LSC some staff said there was a “culture of fear” where they felt afraid to speak their minds in case they were “slapped down”. We are still awaiting the results of a national LSC inquiry into claims of bullying at Notts.

A wave of lecturers’ strikes across the country was expected after it was revealed that more than 40 per cent of colleges had, so far, failed to implement the pay deal agreed between unions and the Association of Colleges.

In July, a leak of the Government’s post-16 White Paper revealed plans for new education grants for low-skilled adults studying full-time.

John Brennan, a man who actually understands the funding methodology and, by all accounts, is far from mad, took over from David Gibson as chief executive of the Association of Colleges.

Julian Gravatt, finance director of the City Lit and regular FE Focus columnist, was appointed to Mr Brennan’s old job as FE development director at the AoC.

There was universal support for the Government’s newly-launched skills White Paper - from industry, unions, colleges, private training companies and academics.

Vic Seddon, executive director of London South LSC, claimed he was forced to resign after the quango’s head office failed to take action after complaints about his chairman Roy Charles over the way public funds were used.

Auditors were sent in by LSC head office. Their findings remain unpublished.

Mr Charles said he “followed procedures” and said he and Mr Seddon were “two people from different backgrounds and with different outlooks who have had good healthy debates over a period of time, which is better than two people with the same mindset.”

August saw the appointment of Mark Haysom, former national newspapers director at Trinity Mirror, as chief executive of the LSC, taking over from John Harwood, former local authority chief executive.

Research revealed that thousands of students eligible for education maintenance allowances of up to pound;40 per week were failing to claim them. Take-up was lowest in Suffolk - at 38.5 per cent.

Colleges began to sever links with The Learning Library, which provides bookkeeping courses, after the LSC raised concerns about its practice of offering loans to students to cover their fees for course materials.

In September, it took a court injunction to force Dominic’s sixth-form college, in Harrow, Middlesex, to admit Anthony Ford-Shubrook, who has cerebral palsy and uses a wheelchair.

Basic skills policy had spawned large numbers of sub-standard courses, inspectors revealed.

An Ofsted report said: “The proportion of good provision is much lower in literacy, numeracy and English for speakers of other languages than it is in any other area of learning.”

Even lecturers’ own literacy and numeracy levels were so low, according to inspectors, that they need extra help themselves.

The dreaded “clawback” system, softened earlier in the year, was finally scrapped in October. Research by the Learning and Skills Development Agency found higher education students at colleges get a better deal than those at universities, with smaller classes and more personal support.

Police raided eight addresses in an investigation into allegations that Sandwell College, West Midlands, was duped into paying millions of pounds for training which never took place.

Colleges don’t need heroic leaders - or even charismatic ones, according to Graham Peeke, interim director of the Centre for Excellence in Leadership.

“We want leaders who give leadership away,” he said, explaining he wanted more decisions made by staff who are closer to students.

In November, Mark Haysom announced he was determined to crack down on jargon. “We will be using plain, clear English, to ensure that we are understood by everyone,” he told FE Focus.

A report by Ofsted inspectors said that a third of trainee lecturers would not pass GCSE English or maths.

Ivan Lewis, the adult skills minister, called on the LSC to get tough on poor work-based learning schemes. He was reacting to an Adult Learning Inspectorate report which described half of on-the-job training as inadequate.

In December, bureaucracy-buster Lynne Sedgmore was appointed to head the Leadership College, and colleges called on the Government to give them more freedom to do things their own way after a survey revealed 94 per cent of students were happy with their experience.

If nothing else, as the year draws to a close, at least we know that the customers are satisfied.