The Further Education Funding Council has chosen not to force colleges to draw up registers of interests in order to qualify for cash, despite discovering through its own survey that up to one in five colleges have no firm plans to create a register. Of the 301 with registers (71 more plan to create them), a quarter intend to keep them closed to the public.
The FEFC decision comes just days after the publication of the Nolan Committee's report on local public spending bodies, which recommended that all further and higher education institutions should have publicly available registers of interests.
The FEFC was asked to consider making funding conditional upon a register by the Public Accounts Committee, which reported on the sector last year.
The suggestion followed a recommendation from the Government watchdog the National Audit Office that all FE colleges should establish a register of interests.
The NAO reported in the wake of high-profile inquiries into mismanagement at St Philip's Sixth Form College, Birmingham and at Derby Tertiary College, Wilmorton.
Though governors at Derby were found to have failed to declare an interest in firms contracted to supply goods, the NAO failed to identify significant conflicts of interest at other institutions. Nevertheless, it proposed that governors should declare all directorships, significant shareholdings and memberships of professional bodies.
The ethics committee of the Association for Colleges and the Colleges' Employers' Forum endorsed the call, and said registers should be available for public inspection. The AFC still seeks to persuade reluctant colleges to open registers, but does not favour enforcing this through funding. Policy director John Brennan said: "I would support the FEFC's position in not wanting to impose this. If you turn every question into a requirement you lose the advantage of self-regulation, which gives people the opportunity to prove they are doing the right thing through their own volition. If you impose it, colleges may pay lip service but won't necessarily do any more than that. "
The FEFC is to chase up colleges who did not respond to its questionnaire, and will repeat the survey in full next year and report the findings to the PAC.
The funding council is also taking steps to ensure that it is seen to be itself acting in line with the Nolan Committee doctrine of openness and accountability.
In a consultation document last year it announced its intention to draw up a public register of interests of members of its own council - a document expected this summer. Records of interests of regional committee members are already complete. FEFC staff are also required to declare any interests.