Ministers feel achievers' anger
Behind the threat of four college principals to sue the Government over the way it handled the collapse of South Thames Training and Enterprise Council lies a deeper malaise and wider-ranging anger with ministers.
The four in Lambeth, Lewisham, Southwark and Woolwich cannot be dismissed as malcontents with the marketplace. They are turning round some of the largest colleges in Britain, making them leaner and more efficient - as the Government demands - and pushing up standards in one of the most socio- economically deprived regions.
Measured in Tory policy terms against the TEC which once served them all, they are models of success. But was the TEC bankrupt? The Employment Department says yes, the colleges say no.
Government refusal to intervene will cost the Treasury and taxpayer more dearly than if it had bailed out the TEC. Half the 120 lecturer redundancies would have been prevented, college debts of at least Pounds 2 million would have been avoided, more than 50 private training agencies would still be in business and an estimated 1,200 school-leavers and unemployed adults would still have training places.
Meanwhile, the cost burden shifts to other departments such as social security, where Secretary of State Peter Lilley is pushing through measures to cut support for the unemployed and homeless.
Whitehall's failure to co-ordinate Government departments' needs and expenditure drove Sir Geoffrey Holland, the former Permanent Secretary for both Employment and Education, to despair and partly contributed to his decision to leave for the vice-chancellorship of Exeter University.
His answer is a package of sweeping reforms, including an Education Allowance, aimed at taking people off the dole queue and income support by funding their initiatives for self-improvement (see above).
Sir Geoffrey is deeply cynical about the recent creation of Integrated Government Offices to handle inner-city regeneration money along these co-ordinated lines. "The Department for Education did not go into these offices," he said. "It argued that the funding structures were already there through the funding councils."
But, as a result, when the crunch came and the four principals went cap in hand to the London office for the TEC cash, they got nothing - dismissed as unsecured creditors, not even at the bottom of the list of priorities. "We are not just looking at a college in Lewisham and the failed TEC. It could be Liverpool, it could be any city. And it is not just FE but secondary and primary schools,"said Sir Geoffrey.
The tensions of Government departments pulling all ways are bringing the colleges to breaking point.
Ruth Silver, principal at Lewisham, has warned: "We are being driven down and down by systems in collision with each other. Five Whitehall changes have hit my college hard." Where the four colleges once worked together, they are now divided between two separate TECs.
A new way of allocating cash to drive down costs in higher-spending colleges has coincided with the TEC going bust. "The new TEC (South London TEC) says it does not want our work."
A new ruling on fees for part-timers from overseas stops colleges doing many short-courses. The reform of the rule limiting the time the unemployed could study without losing benefits from a nebulously-defined 21 hours to a guaranteed 16 hours guided study would prove counter-productive for many with very poor study skills, she said.
The public finance initiative whereby new capital developments are supported with private-sector loans is landing the college with a Pounds 9 million debt for new buildings based on students yet to be recruited. "It's insane. The Further Education Funding Council should be doing this job,"said Ms Silver.
The colleges want an interim year of extra funding to buffer the effects of the TEC collapse. "We are leaner and fitter, but when there's no more fat to burn, you start burning muscle," she said.
But, for Ms Silver, the biggest crime of ministers has been to persuade the electorate that social and economic deprivation are not linked.