A crackdown on funding for job-related qualifications could force some colleges to pull out of some work-based training, prompting claims that the Government's education and training targets will become more remote than ever.
In a circular due within the next fortnight, the Further Education Funding Council will further strengthen its tough line on franchised courses - training funded via colleges but delivered by third-party providers.
The FEFC is keen to iron out what it perceives as substantial variations within the sector between different colleges' claims for the same franchised qualifications in identical settings.
Under the new guidelines, colleges will no longer be free to set for themselves the level of funding they believe national vocational qualifications they offer should attract.
Instead, they will have to refer to a fixed tariff setting out the funding due for individual NVQs according to method of delivery. Colleges which provide assessment, and off and on-the-job training for NVQ students will be able to claim the maximum amount, while those that provide assessment only will earn the minimum.
An FEFC spokeswoman said: "This recognises there are different levels of activities going on in colleges and it is putting a price tag on that."
However, colleges with substantial franchising operations fear the clampdown could spell disaster for swathes of their workplace training programmes.
They are furious that the guidance is being issued retrospectively - for 1996-7 - when they have already signed contracts with employers to provide certain levels of training, allowing them to put in bids for appropriate levels of funding.
Now they will have to go back and reassess the amount they will be able to claim, and fear that in some cases the cash may be too little for the programme to be viable.
One principal of a college with a large franchising programme said: "This is really going to restrict further delivery and achievement of NVQs. The only possibility of hitting the national education and training targets is through employment-based delivery of NVQs. It seems to me the FEFC is actually closing down one of the most important ways of hitting targets."
However, the FEFC says colleges should not have been surprised by the new guidelines, which follow earlier guidance on quality control of franchised courses issued last spring.
The council's spokeswoman said: "This would only create a difficulty for a college which has knowingly been claiming more than they should have done. "
Nick Lewis, principal of Broxtowe College and a member of the FEFC's tariff advisory committee, which has been consulted over the circular, said colleges were generally agreed on the need for a funding tariff for work-based NVQs. He said: "The principle all this is based on is that the college gets paid for what it does. This amounts to a proper application of the existing funding principles."
Colleges which had been hoping to draw down funds for training an employer was already providing anyway - forbidden under FEFC rules - could now face problems claiming, he said. Those which had been "reading the tea leaves" following publication of the first franchising guidance should be in no difficulty.
But Martin Jenkins, principal of Halton College where 28,000 students were enrolled on franchised courses last year, said even teaching support and assessment came with a price tag if they were of high quality.
He said: "We have to share the costs with the employers but it is a question of what level of pump priming the government will give through the FEFC. You can't cut corners on money to the colleges if we are to provide a quality input."