College employers are due to meet officials at the Department for Education and Skills today in the expectation that the shortfall can be bridged.
The problems first emerged in the spring when it was realised that the rising costs of increased pensions, national insurance and pay would not be covered by the increase in government funding. College leaders were told they would receive pound;16.4 million extra instead of the pound;19m expected. The lower figure was the calculation of the DfES, based on the overall increase to the further education sector.
Problems appeared to have been resolved following a meeting between the Sixth Form Colleges Employers Forum (SFCEF) and the then further and higher education minister Margaret Hodge.
But colleges' financial position has since worsened, says Sue Whitham, head of the SFCEF secretariat. The Learning and Skills Council reinstated the pound;19m, but a range of other things were consolidated, which had to be found from this money.
This included cash for continuing professional development. "Some colleges were receiving six-figure sums in addition to their budgets. They have no scope to find this from existing budgets," Sue Whitham said.
College leaders say the factors that hit them hardest were calculations by the DfES and LSC - which failed to take account of higher costs in sixth-form colleges - and hidden extras such as consolidation of money for professional development.
When government officials refused to give ground, the SFCEF carried out a snap survey, to which 40 colleges responded. This revealed the scale of difficulties, with some colleges falling short by pound;400,000. That survey will be considered at today's meeting.
An example of the underestimate, says Ms Whitham, is the extra cash for increased pensions. They rose by 4.75 per cent and it was estimated that a 2 per cent increase would cover this. "This may be so in FE colleges, but in sixth-form colleges we need 2.7 per cent."