Glasgow set to be the first testing ground
The Glasgow Colleges Group, established in April 1999, has already embarked on a number of collaborative initiatives which have earned the council's praise.
These include mutual agreement on how to develop new courses and specialist programmes, joint staff development, a common bursary policy, enhancing the Glasgow Telecolleges Network to ensure complementary approaches to IT and collaborating on purchasing services.
There are also moves to strike an agreement with higher education institutions in Glasgow to ensure FE students can move smoothly from one sector to the other.
The analysis of FE in Glasgow is being carried out y consultants from KPMG which has set up a Scottish office to offer support to college managements, headed by David McKenzie, former principal of an English college. The funding council's report says a key issue will be to come up with plans for where colleges should be situated and what money is needed to bring them up to scratch.
Many of Glasgow's colleges are not in the best condition and the council's report acknowledges that "simply to bring the existing estate up to an acceptable standard would be very expensive".
It adds: "The council and the colleges both require a sound strategic analysis of the appropriate pattern of estates for the curriculum and locations required by the community, before making estates investments."