Rates of retention and achievement must be raised significantly, college by college, year by year, in return for the increased funds announced last month by David Blunkett, the Education and Employment Secretary.
Roger Dawe, director-general for further and higher education and youth training, has set out the Government's views on how the extra #163;725 million should be spent, and what it expects of the sector.
In a letter to the Further Education Funding Council, Mr Dawe writes that raising standards is essential if the sector is to make the contribution to lifelong learning expected by the Government.
He says Mr Blunkett is particularly concerned at the variation within and between sectors in A-level performance and the high drop-out rates from GNVQ courses.
"As with schools, the Secretary of State is not prepared to tolerate consistently poor performance: the importance of further education to the economy and society, and its responsibility to individual students, are too great."
The letter provides greater detail about the proposed FE Standards Fund. This will comprise #163;35m in 1999 and #163;80m the following year. This should be spent on targeted intervention in colleges showing poor performance; post inspection support for colleges; training for principals; and dissemination of best practice.
Mr Blunkett wants more cash to be available for colleges which get good results in order to provide a direct incentive to raise standards.
The target of 700,000 extra students breaks down into 50,000 16 to 19-year-olds (full-time) and 650,000 adults (mainly part-time). Up to 80, 000 of these are already expected for 19989. Plans provide for increases of 178, 000 in 19992000, 109,000 in 200001 and 340,000 in 200102.
The extra adult students are expected to come increasingly from deprived areas - 60 per cent of the increase in 19992000 and 65 per cent in 20012.The council is expected to increase widening participation funding from the current Pounds 20m to Pounds 50m in 1999 - a 10 per cent premium per student. This is the first time the department has directed the FEFC on the allocation of funds within the tariff.
The Government has already announced, from September 2000, new AS and A-level syllabuses and a revised GNVQ model. The extra costs of funding this should be met by improved efficiency, "including larger class sizes and increased collaboration between providers".
The council will also be expected to adjust its funding so that colleges "which offer full advanced-level programmes along the lines envisaged by the Government are funded on a basis which recognises the costs involved in making this provision including the additional taught hours entailed."
When colleges make franchising arrangements, they should not normally operate well outside the college's area, says the letter.