Colleges risk having "compliance orders" placed on them to force them to recruit and promote more black and ethnic-minority staff.
Trevor Phillips, chair of the Commission for Racial Equality, described colleges' record on black employment as poor and told FE Focus: "We are looking at ways in which we can encourage the sector to reform itself before it has to be reformed."
Like all public bodies, colleges have a legal duty to promote racial equality. One has already received a letter warning it is failing to meet standards in this area, the first step before a compliance order is served.
Mr Phillips said he hopes the sector "wakes up and makes an effort" before tougher action is taken. On compliance orders, he added: "As Chris Tarrant might say, we don't want to do that, do we?" He spoke after delivering the New Year lecture to the Learning and Skills Development Agency on "Public Value".
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