Colleges and schools have spent much of the past eight years gazing at each other suspiciously across unlevel playing fields. While competition for post-16 students is today not as intense as it was in the mid-1990s (when some schools tried to up the ante by opening new sixth forms), many remain cautious.

Now the Government wants colleges and schools to be in the same team. Differences in funding, which can mean schools receive up to pound;1,500 per student more than colleges for teaching the same A-levels, will be ironed out and expertise shared.

Not that diversification will be discouraged. Colleges are being urged to go the way of many secondary schools and establish themselves as centres of vocational excellence. But there must be collaboration to allow for a more rational use of facilities.

The Government has offered pound;100 million to colleges that may be uncertain about whether to pursue this option. By 2004-5, half of all colleges will be expected to have selected their areas of expertise and to have begun to operate as specialist centres, preferably with extra private finance.

It will be for local learning and skills councils to determine which colleges specialise in particular vocational areas, and co-operation will be enforced if necessary.

“The idea is to eliminate competition,” says John Rockett, president of the Association for College Management and principal of Rotherham College. FE, he says, must get used to the fact that it no longer exists and that skills councils will not be obliged to fund colleges, or indeed any post-16 provider. “LSCs won’t necessarily purchase what colleges have to offer,” he says. “If they don’t think a school or college should deliver a subject, they will close it down and go somewhere else.”

Dr Ken Spours, a senior lecturer at the London Institute of Education’s lifelong learning group, expects to see schools and colleges “steered towards collaboration” to avoid closures or mergers. “It won’t always be a happy scene,” he says. “Schools and colleges have different cultures and some relations got particularly bad in the competitive era.”

More schools are trying to overcome the fact that they have relatively small sixth forms by working together. “They are talking about getting involved in consortia in ways that they wouldn’t have done even a few years ago,” says Spours.

Inspections by Ofsted in three London boroughs have already led to proposals for new sxth form colleges to replace poorly performing school sixth forms. Spours believes that it should be the quality of a sixth form, not its size, that determines its future.

But if size is the only factor, the future of up to two-thirds of sixth forms could be in doubt. Just 593 of the 1,781 sixth forms in secondary schools have more than 200 pupils - the figure seen as financially viable and as compatible with provision of a reasonably broad curriculum John Howson of Education Data Surveys says the new learning and skills sector could become a “climate of decimation” rather than co-operation if the councils impose an efficiency cut-off point at 200 pupils. “Half of the sixth forms left would be grammar schools, while the rest would be large comprehensives in areas where there is little competition from the FE sector,” he says.

Sixth form reorganisation proposals such as the one launched last year in Bristol will come under the auspices of local LSCs. Brian Styles, principal of City of Bristol College, says colleges have got to get used to reporting to the local bodies responsible for planning as well as funding.

“The Further Education Funding Council was not greatly influenced by the difficulties that occurred in a particular area,” he says. “The local LSC will be much more open to local pressure.”

Ted Parker, principal of Barking College and a member of London East Learning and Skills Council, says local LSCs must try to reach “sensible conclusions” over the future of sixth forms. A recent area inspection in east London did not lead to any proposals for changes in post-16 provision.

Colleges such as Barking will have no option but to become centres of vocational excellence. “I value the diversity of FE colleges as they are now, but that’s not how it’s going to be in the future,” says Parker. “We will have to determine what we’re good at or popular in and go for it.”

Dan Taubman, a national official of the lecturers’ union Natfhe, says colleges will build on their strengths to attract funding. “The problem can be that other facilities degenerate while you focus on your specialism,” he says.

But despite the efforts of local LSCs, competition will not be stamped out completely. Taubman expects some school sixth forms and sixth form colleges to continue “cherry-picking” the most able students, which could lead to some FE colleges becoming little more than old-style “tertiary-moderns”, left to pick up students that other institutions do not want.

“If you’re going to be a social policeman, what sort of money is going to be available to pay for that?” he asks.