A row of framed certificates adorns the reception desk in the smart new foyer, proclaiming the achievements of Pontypridd College in the heart of the South Wales valleys, about 12 miles from Cardiff. “You have to put all your badges on display so that people know what you can offer,” says principal Jeff Cocks. “It’s the first thing we did after incorporation.”

As elsewhere in the UK, colleges were forced to examine their strengths and weaknesses when they became independent five years ago and consider how they could improve their performance to attract students and the funds that came with them. Competition was the watchword. But as in the rest of the UK the process colleges are once again talking about planning, co-operation and partnership.

The bitterness created when colleges were wrested away from local authority control was probably more intense in areas like South Wales where colleges that were once institutes for training mining and engineering apprentices were woven into the fabric of the local authority education system.

But the rancour caused by a political philosophy alien to these communities did not last long and the effects of colleges’ new-found independence began to take effect.

As, Mr Cocks explains, they started to find their own “hinterlands”. This in turn brought mergers and closures - Pontypridd merged with Rhonnda college a few miles up the valley - but the end result is a more rational system related to local needs.

Student numbers have risen by about 120 per cent since 1993 to nearly 194,000 last year. Mr Cocks, who chairs Fforym, the association of Welsh college principals, says courses are more work-related, with the number of students on vocational courses rising by two-thirds between 1993 and last year.

There has also been a drive to widen participation in FE which has seen outreach work increase massively. Pontypridd has about 100 outreach centres promoting basic skills and general adult education in an area plagued by very high unemployment and social deprivation in the aftermath of the shutting down of the mining industry. Participation by students with special needs has also increased.

But the way colleges are funded has helped make the huge changes smoother. The FE and HE funding councils work closely together, sharing the same staff and chief chief executive, Professor John Andrews, and colleges have the advantage of a single funding mechanism. “We tried to ensure from the beginning the colleges would be fairly resourced,” says Professor Andrews. “The common methodology recognises the real cost of programmes which was ignored under an old system based on the number of full-time equivalent students in each college.”

He adds: “As a country we need to improve our economy and it’s vital that we can bring in investment from outside. We can only do that if we can train the manpower.”

Closer collaboration is creating alliances to cope with the pressures. In the Pontypridd area, hopes are pinned on the Rhonnda Cynon Taff strategic forum, which has linked colleges, schools, the local authority, employers and voluntary organisations into a body responsible for co-ordinating provision for young people.

But continuing cuts in funds and rising student numbers could make the pressures created by independence more intense. Robin Trebilcock, principal of Neath College, a few miles along the coast from Cardiff, has seen huge investment since incorporation, including a new pound;2 million teaching block, and is in the process of merging with nearby Avon College.

But Mr Trebilcock is worried about the 8.7 per cent efficiency savings Welsh colleges are having to make in the coming year. “We have to generate a surplus every year to cover the capital we have invested,” he says. “The danger is that some colleges will find it a burden they can no longer bear. It’s a timebomb ticking away.”