One of the biggest accreditors of degrees in FE is terminating almost all of its partnerships with colleges. Leeds Metropolitan University, which once saw itself as the "university of the North", along with college partners across the region, now sees its future in private companies and overseas franchises.
Over the past year, it has ended its partnerships with five colleges and over the course of 2012 it expects to shut down another 12. That will leave only eight whose status, according to university documents, is "unknown".
While many colleges have been able to find new university partners to continue their provision, the decision is a further sign of the increasing competition between universities and colleges for a limited number of student places.
For Leeds Met, it has meant a decision not to pass on any of its allocation of places to colleges through franchising. Only those that receive direct funding from the Higher Education Funding Council for England (Hefce) will continue to have their degrees validated.
According to the Association of Colleges (AoC), this is a nation-wide trend. Up to 14 per cent of colleges have been told that their student numbers will be cut this year and the association said that up to 30 per cent could see their partnerships with universities end by 2013.
The loss of franchised places is partly a response to colleges' increasing success in winning direct funding: last week, they won more than half of the 20,000 low-cost places held in reserve by Hefce. But it makes those without significant direct funding more vulnerable.
The vice-chancellor of Plymouth University, Wendy Purcell, wrote to MPs last week to protest that her institution faced losing 10 per cent of its places despite a rise in applications. That will also put pressure on the 3,000 places it franchises out to local colleges - a third of its total.
Some warn that franchising could become a thing of the past, with universities preferring to keep their full allocation. "That probably is one of the things that will happen. It's starting to emerge," said one principal whose college has ended its partnership with Leeds Met.
Colleges have been working with universities in a collaborative spirit, but there are signs that competition for places is undermining that, said Nick Davy, HE policy manager for AoC.
"Worrying trends are starting to emerge as budgets are cut. A survey of our member colleges shows that a number of universities are withdrawing their engagement or trying to negotiate down their student entrant numbers," he said.
"Recent gains in the number of students able to attend colleges for HE courses through the core and margin system could be markedly reduced as higher education institutions try to compensate for the loss of 10 per cent of their intake through the same system," Mr Davy added.
There are further restrictions at Leeds Met, limiting colleges to foundation degrees rather than full honours degrees. If a student wants to "top up" a foundation degree to a BA or BSc with an extra year of study, they will have to attend Leeds Met or another university. The decision would prevent local colleges from competing directly with the university in its core provision of three-year degrees, and Leeds Met acknowledges that some colleges may not want to continue under the new rules.
At the same time, the university has sought out deals with overseas providers from Indonesia to Ireland. "The activity so far this year represents a shift of emphasis from publicly funded FE colleges to private companies and overseas franchises," said a report to the universities committee responsible for partnerships.
Its only new partnership with a college is with Ealing, Hammersmith and West London College, but the arrangement is intended to be only for international students.
14% of colleges with franchised HE provision have seen it cut by their university partner this year.
30% of partnerships between colleges and universities could be terminated by 2013.
Colleges won more than 10,000 of 20,000 low-cost HE places.
Many universities face a 10% loss in student numbers through the same system.