The extra cash will be used to cut staffing costs by funding redundancies, early retirements and retraining. The colleges will have to bid for their share.
But more than pound;700,000 of the extra money is understood to be earmarked for Clydebank College to meet the costs of 36 redundancies. A recovery plan for the college was approved last week by the Education Minister who had to provide an emergency loan of pound;934,000 to save it from bankruptcy earlier this year.
The Scottish Office commissioned a study by consultants Deloitte and Touche who recommended a number of steps, including job losses, to restore Clydebank to financial health (see story, right). Members of the College Lecturers' Association voted narrowly to support the redundancy package, which involves an increase in the teaching week from 21 to 24 hours and a reduction in the number of departments from 13 to eight.
The necessity for the Scottish Office to step regularly into FE with its cheque book is seen in the sector as continuing evidence of inadequate funding. The Association of Scottish Colleges said that while "every bit extra is a relief," a substantial increase in grant funding is needed to end "the chronic financial squeeze and uncertainty that colleges face".
The pound;2m staff restructuring fund brings to over pound;7m the amount poured into colleges since 1994 to ease the shake-out of staff.
It is also the fourth ad hoc instalment for the colleges since the Government came to power last May. A pound;1.3m strategic initiatives fund to provide a "catalyst towards change" was distributed to all colleges in the last financial year, followed by pound;650,000 to fund college courses in advance of the new deal welfare to work programme.
Another pound;1.4m was provided for FE in the current year following the Budget. It is intended to cushion colleges which suffered the most from reductions in Scottish Office grant this year. Fifteen colleges got 5 per cent less in grant than last year, or worse.
Total FE spending of pound;286.7m has also been top-sliced to provide pound;4.21m in "support for vulnerable colleges" and pound;2.05m to encourage collaborative ventures through rationalisation, mergers and co-operation.
Brian Wilson, the Education Minister, told the TES Scotland he would like to put "serious money" into FE, which he acknowledged was crucial to the success of a number of training-related Government policies. But he clearly remains worried about the efficiency and management of the sector.
Announcing the latest tranche of funds he said: "Colleges are faced with a continuous need to ensure that their staffing structures are as efficient as possible and tailored to the ever changing needs of their market place."
The colleges are now pinning their hopes for a major funding increase on the outcome of the Treasury's "comprehensive spending review" later this year. The ASC stepped up the pressure this week, briefing MPs in advance of Wednesday's Scottish Grand Committee debate on further and higher education.
The association drew MPs' attention to the recent National Audit Office report which forecast that 39 of the 43 incorporated colleges could end the year to March in the red, compared with 12 in 1993-94.
The Scottish Office says it has committed pound;8m more to FE than the spending plans ministers inherited. But pound;5m is anticipated tuition fee income charged to students on HE courses in the colleges. And the ASC claims the actual sum distributed to colleges this year through the grant formula is pound;1.5m less than last year.