The Scottish Office funding formula will be linked to quality provision for the first time from April. Colleges will be invited to bid for challenge funds to improve new technology to meet the needs of small businesses. Following consultation a similar fund could be established to stimulate quality measures, while another "reward fund" could be available to course teams.
A bidding process to attract additional funds will also operate for colleges whose 1997-98 grant settlement is 6 per cent less than in the current year.
The Inspectorate will extend the "excellent school award" to colleges judged by HMI to be particularly effective and will also publish a Standards and Quality report for FE.