The December 31 deadline complies with the demand from the Scottish Parliament's audit committee for an indication from the council by the end of the year on how it intends to strengthen the management performance of the FE sector. This follows hard-
hitting reports from the National Audit Office and subsequently from the audit committee itself.
The result of all these inquiries is a significantly more interventionist approach by the funding council, as it signals its intention to take a "proactive" role.
The council has set out its own action plan which promises detailed guidance on a whole range of college issues, including the development of performance indicators, benchmarking information to stimulate good practice, training needs of college boards of management, financial forecasting and property management.
The report of the funding council's review has finally been sent to all colleges although it has been with the Scottish Executive since May. It poses a series of 73 "challenge questions" against which colleges are asked to judge their performance and then set out the measures they intend to take to close the gap with best practice.
These questions cover college governance, strategic and operational planning, quality assurance, marketing, human resource management, financial management and estates management. They are backed up by 36 areas of good practice and 24 "key areas for development".
All colleges, not just those regarded as poorly managed, will have to submit plans since one of the messages from the review is that, while there is much good practice, "there will be room for improvement in most colleges".
Henry McLeish, Enterprise and Lifelong Learning Minister, said in June he had been "taken aback" by the extent of the improvements required.
Consultants from KPMG who were commissioned by the funding council to visit 12 colleges to identify good management practice acknowledged in their report that the effectiveness of college managements was "highly variable" in a climate where they were forced to compete against each other for Government funding.
The investigation was ordered in March last yer by Helen Liddell, then education minister, whose husband was a board member at Clydebank College. It followed well-publicised difficulties there after the deficit had reached pound;1.3 million and the then Scottish Office had to come to the rescue with a pound;700,000 package.
Hugh Walker, principal at Clydebank, described the difficulties graphically for the first time in public last week when he said he arrived as principal in February 1997 to find the college in chaos. "It was difficult to know where to start. There had been mayhem about bursaries, the students had walked out, the staff had been on strike, there had been serious disagreements with the board of management, the internal atmosphere I can only describe as acrimonious in the extreme and the Scottish Office had to bail us out. It was an appalling position."
The funding council makes clear in its report that it expects action plans to demonstrate how colleges intend to achieve continuous improvement across the board. It should not just be seen as a "one-off exercise".
Professor John Sizer, the funding council's chief executive, states: "We envisage that those plans, which are critical to the future viability and vitality of colleges, will commence a continuous improvement cycle in which the disciplines of benchmarking, critical self-evaluation and continuous improvement become embedded in colleges' management processes."
This would be "a challenging agenda" for some colleges.
The challenge questions are based on the review's main recommendations:
* Greater involvement by college boards in setting out the college's agenda and strategy, and better training for board members.
* Clearer links between college vision, strategic objectives and operational plans.
* Development of "scenario planning, risk assessment and sensitivity analysis".
* A college-wide approach to quality assurance.
* Marketing must be a strategic function "critical to the continued success of colleges".
* Managers need to understand their staff management responsibilities and to ensure industrial relations, which are "near intractable" in some colleges, improve.
* More effective strategic financial planning.
* A comprehensive strategy for property maintenance, including setting priorities for clearing backlogs and meeting health and safety requirements.