High-spending colleges were feeling the pinch and low spenders received a leg up as the Further Education Funding Council made big strides towards equalising funding this week.
The pound;3 billion share-out marked a major step towards its goal of a common average level of funding (ALF) for all colleges. The plan - announced in January - is to top up the funding of all those colleges with low ALFs to the target rate of pound;16.20 per unit. Under complex FEFC funding formula all costs, whether for students or general running of the college, are broken down into units.
Institutions with ALFs above that figure had their funding trimmed, but cuts have been limited to a maximum of 10 per cent. City colleges were hit hardest - in London, Hackney Community College's ALF was slashed by 10 per cent, although it remains the highest in the country at pound;20.85.
Lambeth College - also in London - Hopwood Hall College in Rochdale and Stockport College, which all have ALFs around the pound;20 mark, also experienced sizeable budget reductions. They face further cutbacks before the 2001 convergence deadline.
Some, mainly smaller, colleges were enjoying a huge boost in their spending power. Richmond Adult and Community College, whose budget increased by 60 per cent, Hereward College (up 34.4 per cent), Crawley College (up 26.5 per cent), Otley College of Agriculture and Horticulture (up 21.9 per cent), and the People's College, Nottingham (up 21.1 per cent), all saw their coffers swell by more than a fifth.
Overall, there were more winners than losers, with 246 colleges experiencing an upturn in their fortunes and 181 emerging worse off from the spending round.
Geoff Hall, the FEFC's director of finance, said it had rationed its payouts "as fairly as we can", and that convergence would be achieved in three equal steps.
"In 1993, when the sector was created, there were more than 100 different funding systems and everybody, everywhere signed up to the notion that we should converge," he said.
"The only issue is the pace at which we should converge."
The pound;3bn included additional funds of around pound;50m from the government for full time 16 to 18-year-olds students and for widening participation of those aged 19 and over. The FEFC estimates that this will pay for an additional 20,000 full-time-equivalent students during the next academic year.
Another pound;4.5m will go towards basic skills summer schools and the University for Industry, and pound;5m will fund additional childcare. A further pound;10m will limit the average efficiency savings required of colleges to 2.75 per cent - in line with the Government's estimate for inflation.
David Melville, the FEFC's chief executive, said this year's was a "very positive funding round".
"Following the year in which the loss of the demand-led element produced a sharp fall in funding, we welcome the additional funds from government, which have enabled new activity to be developed. In particular, we have been able to fund the first steps of the Kennedy report."
John Rudd, principal of the People's College, Nottingham, said that the funding award - which put another pound;1m in next year's budget and saw his college's ALF jump from pound;13.78 to pound;16.20 - would ensure the college's future financial wellbeing.
He said: "We have been underfunded historically, so we welcome this decision very much."