COLLEGES IN Scotland are four months away from the first instalment of the Government’s pound;214 million cash bonanza. Or are they?

The money does not start being paid out until April. The funds for student growth are not likely to have much impact until the next academic session, and the precise impact will depend crucially on the nature of the students. While the cash is designed to pay for added burdens, the colleges will inevitably expect it to ease the sector’s financial plight.

Local bush fires over pay are not yet a thing of the past. The Scottish Office ordered financial consultants into Paisley’s Reid Kerr College last October, only three months after ministers announced their bounty and shortly after a similar rescue plan had been agreed for Clydebank College.

The Government’s comprehensive spending review last July unveiled the three-year package which was, and still is, welcomed as the first serious injection of cash into what was becoming a financially beleaguered sector and therefore a serious political embarrassment for ministers.

Some pound;40 million will be available for FE in the first of the three years in which the cash will flow, 1999-2000. “We continue to regard that as a really good settlement,” Tom Kelly, chief officer of the Association of Scottish Colleges, states. The Government says the first-year payout represents an increase of almost 14 per cent in real terms on Scottish Office grant-in-aid.

Recognition of previous underfunding is confirmed by pound;56 million in “stability” funding (pound;17 million in the first year). This is intended to steady college finances, restrict demands for “efficiency improvements” to 1 per cent and sweeten pay talks with the unions.

But there are a growing number of questions and details still to be thrashed out in the remaining categories. On the surface, the Government is putting its money where its mouth is by allocating pound;102 million (pound;13 million in the first year) to create 40,000 extra student places in FE by 2002. This is part of a UK-wide commitment to provide 500,000 additional places in colleges and universities, a move personally endorsed by the Prime Minister.

This may not be entirely the largesse it seems, according to Mr Kelly, since the pound;102 million will also have to pay for new policy initiatives such as Higher Still. How much will be available for “extra” students has still to be clarified, particularly as bursaries for full-time, non-advanced students will also have to come from this pot.

Mr Kelly says the colleges’ preference is an increase in part-time student numbers, which would relieve pressure on FE facilities and on bursary expenditure.

The Government’s commitment is to fund 40,000 extra FE “places”, which refers to enrolments rather than individuals or full-time equivalents. Mr Kelly welcomes this as a harbinger of flexibility, which would have the added advantage from the Government’s point of view of making it easier to reach the target figure.

“One single parent could enrol for a course in parenting over one term,” he says, “and the same student might reappear the next term for a course on domestic finance. That would be two ‘places’.” The colleges’ priorities will be to make sure disadvantaged and non-participating students get the benefit.

The Scottish Office will have to find yet another formula to measure the participation of underrepresented groups. The current formula is based on a SUM count (student growth represented as hours of study in a “student unit of measurement”) which is based on activity of two years previously. The key indicator in settling funding for the additional places will be levels of deprivation rather than college size or head count.

Even critics and victims of college funding are impressed by the changes. Ian Graham, principal of John Wheatley College, which serves one of the most deprived parts of Glasgow, applauds the sums involved. He also is heartened by what he believes is acceptance of colleges’ concerns over the Scottish Office’s attempt to link quality to funding by using “crude indicators” such as pass rates.

Joyce Johnston, principal of Fife College and chair of the FE principals’ forum, who has long called for changes in the funding formula, says the underfunding of recent years has been addressed and believes the areas earmarked for expenditure are “congruent with the aims of the sector”.

The extra sums and the advent of the FE Funding Council should also help colleges to plan ahead, Ms Johnston says, instead of the “reactive model” in which they are funded on the basis of student numbers two years previously.

Hugh Walker, principal of troubled Clydebank College, is particularly pleased that underfunding is to be addressed. He also welcomes the growth planned in the number of students from disadvantaged and excluded groups. But Mr Walker warns that the funding methodology related to the SUM count, to which much of the past instability in college funding is attributed, will remain at the core of the system although the new formula attempts to limit its unpredictability.

Colleges are to receive two other tranches of cash - pound;27 million to speed up building improvements, particularly to secure health and safety, and pound;29 million for information technology.

The technology fund is intended to expand numbers as well, widening access through distance learning methods. This is also a means of greasing the palm towards more collaboration among colleges, the models being the University of the Highlands and Islands and the Glasgow Tele-Colleges network which are regarded as pioneers of their kind.

The Education Minister has promised that the long-awaited strategic framework for FE will be published “very shortly”. This would allow account to be taken of “some of the structural issues that are causing colleges to compete perhaps in a needless manner”, Helen Liddell said.

The objective behind the strategy has not shifted from the outline given to the ASC conference last June by Brian Wilson, the former education minister. The principal aim is to widen access as much as possible, with collaboration among colleges the chief means of achieving it.

But in the end FE colleges are being treated in much the same way as the education authorities: new Labour’s purse comes with strings attached and “flexibility” over spending is increasingly what the Government says it is.