Targets will vary from college to college depending on their circumstances. They will have to have to support the Government’s national education and training targets which are currently being revised.

Colleges that are underperforming in some areas will be encouraged by a variety of sticks and carrots to do better. In 10 per cent of colleges - 45 - less than half of the students achieve their qualifications, FEFC inspection data shows.

New funding council benchmarking data let colleges see how they are doing and, later, more detailed council guidance will advise them on their own performances and how to set targets.

The new accredited, high-achieving colleges will be awarded extra FEFC money to disseminate good practice to other colleges, while at the other end of the spectrum some failing colleges may also receive additional funds and targeted support.

Another key engine for ratcheting up quality is the idea of inclusive learning - reaching groups effectively excluded from education and training such as teenage mothers, disaffected youths, ethnic-minority groups, people with learning difficulties and physical disabilities, and adults who have been made redundant. This is a major attempt to match the learning environment to the needs of students. It recognises that people learn in as many as seven different ways.

There are already examples of successful projects which have reached these minority groups, (see story below). The next step is to spread this around the sector. Judith Norrington, AOC curriculum director, says that inclusive learning has been proved to be one of the most effective vehicles for improving student achievement and retention rates.

The AOC and a consortium of 94 colleges won a Pounds 1 million tender from the FEFC to produce staff development materials for the sector. People have been recruited to help all the colleges in England to move towards more inclusive learning.

Ms Norrington says the initiative has huge implications for staff training and development. It illustrates what can be done in the sector with just a little bit more money. “It is a very effective model - by the colleges, for the colleges and with the colleges.”

Ms Norrington also believes that there are some outstanding curricular issues which need to be tackled. Currently, the funding council pays for whole courses leading to qualifications but some students may only be up to obtaining a part qualification or even just some form of recognition that they have made progress.

What is needed, she says, is individually-funded modules of study leading to part qualifications. This would be hugely significant, she adds, for basic skills students given that it is intended that by 2002 some 500,000 new adult students with basic skill needs should being helped in appropriate educational programmes.