A leaked minute of a working group set up by the Association of Scotland’s Colleges reveals that the employers want colleges to have flexibility “to enable them to take into account local issues, the requirements of learners and financial security”.

This means, it was suggested at a meeting of the working group held last April, that “colleges should insist that negotiations on pay and terms of conditions are conducted jointly, not separately as preferred by the unions”.

Colleges are also keen for the unions to drop their opposition in principle to redundancies.

The ASC is seeking support for its strategy from the Scottish Executive and the Scottish Funding Council. But the Campaign for Further Education, the left-wing pressure group which is lobbying for a return to national bargaining on pay and conditions, said the move constituted “a serious attempt to undermine the pay and conditions of staff in the colleges, a development which would expose the concept of college-based bargaining as a fraud”.

There is no question of the ASC or colleges agreeing a return to collective bargaining, which the Further Education Lecturers’ Association privately acknowledges. But the association, part of the Educational Institute of Scotland, continues to insist that there should be a set of standardised national agreements setting out core pay and conditions elements, leaving the rest to local bargaining.

The employers, by contrast, insist that all agreements “are tailored to local needs”.

Tom Kelly, chief executive of the ASC, told The TES Scotland: “In dealing with modernisation, the approach must be suited to the specific circumstances of colleges and, of course, that has financial as well as employment aspects to it.”

Despite the speculation from union activists, the minute of the ASC meeting says a key aim must be to attract staff from industry by offering good pensions, holidays and personal development opportunities. “A significant part of this package is pay and benefits and good working conditions as most colleges are improving estates,” the minute states.

The FE principals’ forum will receive a final report in June.

While the ASC says it is looking at pay modernisation as part of its ongoing “round table” discussions with the STUC, colleges are under pressure from the Executive to deliver on cost-cutting.

This was made clear in the annual letter of guidance a year ago. Jim Wallace, then the Lifelong Learning Minister, told the funding council that “any investment in pay modernisation should allow greater contractual flexibility and greater linkage of pay to performance at local level”.

Such investment, Mr Wallace said, should be used “to equip institutions to be competitive in the labour market and to ensure they have the staff with the skills and flexibility necessary to meet changing demands”.

The unions will also be alert to the fact that the minister’s letter put colleges on notice that they must deliver “quantifiable efficiencies” as their contribution to the Executive’s reductions in public sector expenditure.