Two of the three Edinburgh colleges are in merger talks to create Scotland's second-largest further education institution, TESS can reveal.
The boards of management at Jewel and Esk College, with campuses in Edinburgh and Dalkeith, and Stevenson College Edinburgh have approved the strategy that will create a new college scheduled to open in summer 2012.
But the third city college, Edinburgh's Telford, has decided to go it alone, walking away from the discussions that have been taking place for more than a year. This has ended the long-held ambition of having a "single voice" for FE in Edinburgh, which would help colleges compete with the capital's four universities.
Jim Donaldson, chair of the board at Telford, said the college was "not knocking back merger for the sake of it". He believed the time was not right, since the three colleges were "in different positions" in relation to viability, quality and staffing structures.
A final decision rests with Scottish ministers, based on a recommendation from the Scottish Funding Council.
The council will be keen to avoid protracted merger negotiations similar to those over the pound;300 million City of Glasgow College, which were highly complex and involved four colleges before Stow pulled out. It is under pressure to reduce the price tag and a revised business case is being put together for a redeveloped campus, which ministers do not expect to be ready until later this year.
The two Edinburgh principals are in no doubt that a merger is the way forward. Brian Lister of Stevenson and Mandy Exley of Jewel and Esk said the new college would be "a real powerhouse" for the capital and surrounding areas.
"On their own, the two colleges are strong and provide superb educational and training opportunities - together, they will be stronger and better," they said.
If The Edinburgh College (the preferred title) gets the go-ahead, it will be have an annual turnover of nearly pound;50m, 40,000 students and 1,000 staff.
Telford prefers the second option explored in a consultants' report (see panel) of having a "strong partnership" among the three colleges. It put forward a plan for a "learner entitlement" for all 14 to 19-year-olds in Edinburgh, which would involve working closely with the city's secondary schools.
The college also wanted to see curriculum specialisation, common guidance and support systems for students, common application forms and better quality assurance.
THE PROS AND CONS OF ONE LARGE `POWERHOUSE'
Consultants from the London-based Learning and Skills Network were instructed to investigate two options - a "unified corporation" (merger) or a strengthened partnership between the institutions.
Their report, which has been seen by TESS, noted that merger was "a tried and tested approach and can be implemented smoothly and speedily"; it would also create a "financially secure" college in Edinburgh. But a large merged college might lose the close community links that smaller colleges can develop and merger activity could distract the colleges from their main job of teaching students, and sorting out staff issues, which nearly derailed the Glasgow project. The report considered the second option of a stronger partnership under a joint body, which would maintain the separate identities of each college. But it also noted that decision-making could be complex and that the arrangement would not resolve the financial issues facing the colleges. The consultants found merger could result in considerable savings - pound;1.3m from delivering cross-college services; pound;300,000 from managing these services; pound;800,000 from a slimmer senior management structure; and pound;500,000 from streamlining the curriculum.