Whatever the outcome of investigations by police and other officials into the training operations of Sandwell college (reported on page 1), it still adds up to bad news for the whole sector.

Even if the fault lies with private companies overclaiming for work carried out under contract to colleges, that still leaves further education in a mess.

Inevitably, there will be questions:

* Why did the colleges not spot it?

* Who allowed the excessive claims to go through unchecked?

* Where was the quality control?

* And, most worrying, what must be done about it?

Cast your mind back to the mid-1990s.

The franchising scandals, such as those involving Halton college, rocked the sector and left a trail of red tape, bureaucracy and distrust in their wake. Colleges are only now pulling free of that mess. It took the FE FocusAssociation of Colleges’ campaign against red tape, an official inquiry into bureaucracy-busting and the drafting of the report “Trust in FE” to do it.

Franchising was created in the old days of the Further Education Funding Council, when colleges were told to go for growth and contract courses out to industry.

The pursuit of student numbers came at the cost of quality, as recently incorporated colleges were told to act like private companies.

Inspectors accused colleges of doing little more than paying for private training from the public purse - without adding significant value to justify it.

It was the lack of transparency over what was spent where and what learners really got out of it that caused most trouble.

Any latter-day suggestions of similar scandal could not come at a worse time - on the eve of the next comprehensive spending review and with a rethink by the Department for Education and Skills of what powers college governors should continue to hold.

The Learning and Skills Council insists that it alert spolice as part of “routine procedure” whenever such allegations of a misuse of public funds arises.

That is certainly true, but the LSC will also be told by politicians that it must deal with the issue, close the loopholes and clamp down on any potential abuses.

Colleges must now act swiftly, through their lead organisations such as the AoC, to reassure politicians, policy-makers and the police that draconian measures are not needed.

Otherwise, there will be renewed distruct and discontent, with colleges backing away from ambitious plans to involve private providers in their work - just as we saw after Halton.