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'This exercise is not transparent and it certainly is not adequate'

The funding council's approach came in for fierce criticism, not unexpectedly, from the principal of Shetland College.

"There is a difference between making FE adequate and efficient across Scotland and driving down costs to an average across Scotland. This exercise is not transparent and it certainly is not adequate for island colleges," Gordon Dargie said.

Shetland, one of two colleges along with Orkney still run by its local authority, has cut eight posts over the past two years. Mr Dargie said it was anticipated that the islands council would help cushion the blow, which has not been helped by the halving of transitional relief to pound;248,000. The college has, however, still to receive its share of the pound;6 million paid out to the institutions within the Highlands and Islands university project.

James Logan, newly appointed principal of Moray College, where the grant increase is just 0.1 per cent, said there was serious cause for concern". He believes the funding council has not sufficiently recognised the costs of rural geography and of rural transport, which pose problems for widening access.

At Borders College, a 0.7 per cent increase will have "major implications", Bob Murray, the principal, says. But he hopes there will be "minimum impact on the staff and students".

A more upbeat note was struck at Langside College in Glasgow, despite a decrease of 3.4 per cent. "We expected it to be worse," Graeme Hyslop, the principal, commented. A college with a history of high costs, Langside has had to shed 22 posts with only a few being replaced.

Mr Hyslop has longer-term worries. Maintenance allowances to persuade students to stay on at school will be introduced in Glasgow in August. Universities are also wooing more students.

"These two things together will create a bit of a squeeze for FE," Mr Hyslop said.

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