Welsh colleges are warning they may miss efficiency targets unless more cash is found to ease relentless pressures to make savings.
Outlining a grim picture of a sector struggling to expand while funding is constantly pared down, the colleges claim more than Pounds 120 million is needed for building work, repairs and safety improvements alone.
In the run-up to the 1995 public expenditure settlement, Fforwm, the organisation representing all further education colleges in Wales, is highlighting the plight of the sector and calling for extra revenue and capital investment.
It claims efficiency gains projected in last year's settlement, averaging about 4 per cent annually up to 1998, are unrealistic while colleges are also being told to reduce costs per student.
In the past, Welsh colleges have achieved gains through stepping up enrolments, but the growth rate is expected to decline over the next three years.
Fforwm claims the slowdown - which leaves planned increases in student numbers 2 per cent short of the increase in school-leavers will leave Wales unable to meet ambitious Government-set National Training and Education Targets.
The squeeze is being felt all the more in colleges as local authority cuts also begin to bite. Savings by councils include reductions in contributions towards home-to-college transport and cuts in discretionary awards, forcing colleges to dip into their own resources to find "tens of thousands of pounds per annum" for hardship grants, free meals and travel subsidies, according to Fforwm.
The requirements of the Welsh Language Act obliging colleges to make all publicity material bilingual and draw up strategies on Welsh and bilingual teaching and a growing tendency by local authorities to cut spending on students with learning difficulties after they pass school-leaving age have added to the burden felt by colleges.
Welsh colleges, which feel at particular disadvantage over capital funding, are welcoming the chance to seek private investment with the extension of the Government's Private Finance Initiative to the FE sector.
But their benefit from the scheme will be limited, Fforwm predicts, since budget restrictions bar significant loans because colleges will not be able to meet interest payments.
Meanwhile, the need to replace ageing equipment is also draining resources, though pressure on revenue budgets is leaving colleges "less and less able to top up the allocations received from the Welsh Further Education Funding Council to bridge the investment gap," according to Fforwm.
Fforwm is now seeking a meeting with Welsh Secretary William Hague to state its case. Secretary to the Fforwm board, Dr Mike Jones, said enrolments in Wales this year appeared to be down, with colleges losing out to schools.
Tony Walker, principal of Deeside College in Clwyd, said: "If we are forced to make additional efficiency gains for 1996-7 we will have real problems because we have had to absorb an enormous rate of change."
The funding council is reluctant to discuss Fforwm's case. Professor John Andrews, chief executive of the Welsh FEFC, admitted the efficiency gains required were "significant". Colleges were at a disadvantage compared with schools over funding for GCSE and A-level courses, he added.