in the 10 years since colleges were removed from local education authority control numbers of students have rocketed by 40 per cent from 2.5 million to 4.5m.

But under the “efficiency” cuts of successive governments class sizes have risen, more than 100 colleges have merged or closed and pay has fallen back compared with schools and the private sector.

And it is questionable whether the efficiency measures were effective as colleges accumulated debts of pound;250m within five years. Over the decade, more than 20,000 lecturers quit - apart from those who retired - for better-paid jobs in schools and industry. Lecturers’ pay also changed: from being 10 per cent better off than schoolteachers they are now 12 per cent worse off.

Despite that, David Gibson, chief executive of the Association of Colleges, says: “I remain convinced that incorporation was a good thing. It allowed colleges to develop in many ways and gave them freedom to make business decisions.”

Life under the LEAs was not so good, with colleges playing second fiddle to schools and being first to face cuts.

Mr Gibson said: “Many had serious debts from LEAs leading into 1993, which left huge financial health questions. Many colleges were on their uppers and left with poorly-maintained buildings.”

Variations in funding which emerged were irrational. “One college charged pound;16 per unit of cost for a childcare course, while another six miles away charged pound;32,” he said.

Suddenly in charge of their own destinies, however, college leaders were given little or no support. “No one came, as they did with the incorporation of polytechnics, and offered us the training we needed over two-and-a-half years.”

The final details of reforms were thrashed out in the February and independence came in April.

“We had no allied training. We used to rely on city treasurers, personnel officers and LEA schools trainers. After April, while there were opportunities for training, they were not sustained or planned.”

The new sector emerged in a mood of political hostility towards unions, with Roger Ward, the gung-ho chief of the Colleges Employers’ Forum (precursor to the AoC) bent on cutting pay and flooding the sector with casual labour. In 10 years, FE teaching became the most casualised profession in the country, with 43,000 full-time and 100,000 part-time lecturers.

But then the college corporations found they did not have quite the control they were promised. A lean, mean machine called the Further Education Funding Council controlled the purse strings. A succession of targeted “growth and efficiency” budget measures ensued.

The notorious “demand-led element” was created by the soon-to-be-knighted FEFC chief executive William Stubbs. It was expansion on the cheap - bonuses (but less than full cost) for every student recruited over target.

Colleges exploited the bottomless purse with a genius they were to display with every initiative that followed, until the Treasury wised-up and pulled the plug.

Despite warnings from the polytechnic sector that such cost-cutting tactics drove up debt and led to intractable industrial disputes as colleges looked to casualisation, efficiency drives were sustained until the arrival of Charles Clarke as Education Secretary.

It was a decade of cash penalties. In collusion with the CEF, pound;50m (2 per cent of cash) was withheld by government from colleges which failed to push through new staff contracts. Year-on-year, 1 per cent efficiency cuts were imposed on all colleges - as well as an annual 5 per cent efficiency gain between 1994 and 1998 (see Julian Gravatt, right).

Mr Gibson said: “If you told someone you were cutting their salary by 1 per cent a year for 10 years you would quickly see how much it was hurting.”

Action was taken to eliminate extreme differences in course costs (such as childcare) and colleges were encouraged to seek cash from outside by franchising courses to industry.

But a few cases of opportunistic selling led to an outcry that colleges were subsidising the private companies with cut-price courses. Again the plug was pulled on the initiative, casting 250,000 students adrift and leaving yet more debts.

Bureaucracy also grew like Topsy. “Because of a handful of difficulties in the early years, there were demands for more and more audits. All the red tape was added but none of it withdrawn until the Cut Red Tape in Colleges campaign 2001,” said Mr Gibson.

Only now is the sector recovering. Student numbers last year grew by 500,000, the highest for seven years.

Colleges have responded to every growth demand for a decade by surpassing recruitment targets set them. And they have done more than any other sector in fulfilling government initiatives, from widening participation to the Curriculum 2000 reforms, under remarkably adverse conditions.