Richard Reich, Secretary of State of Labour in the USA and a Harvard scholar, tells the story of a frog which, when dropped into hot water, leaps for freedom and its life. The same frog, if put into cold water, will, when the heat is increased gradually, struggle unsuccessfully to get out, become increasingly disillusioned with the struggle, become unable to function and eventually die.

The Further and Higher Education Act 1992 was the equivalent of that pan of hot water for the further education colleges. It imposed a sudden transformation of climate, and the leap required was enormous.

They were promised freedom from control and a light touch from the funding bodies. Instead, the colleges have found themselves subject to a regulatory regime which demands detailed returns on individual students. Yes, there is institutional autonomy but it functions in what some might call a national strait-jacket.

Overnight, competition replaced collaboration, and neighbouring colleges used to co-operating under the local education authorities are competing seriously for students. But many are also learning that even in this competitive environment they do have to co-operate. Colleges, not unlike other multi-million pound businesses, have to identify and target their competitive arena. They also have to seek to form partnerships.

Three years after incorporation, the market-led approach in which institutional autonomy and competitive working were embedded is moving subtly towards a greater degree of planning. There is a local strategic forum in which training and enterprise councils (TECs), LEAs, colleges and other providers work together to assess the “adequacy and sufficiency of provision”. National training and education targets have been accepted by the Government, the CBI, the TUC and educational providers as essential foundation and lifelong targets for UK plc. Colleges recognise a planning framework when they see one.

Since 1993 further education colleges have developed that “tolerance for ambiguity” which Tom Peters called “success tool number one for workers, politicians and corporate chiefs alike”. When the Association for Colleges conceived its strategic plan, we adopted this statement as our maxim. Three years later I believe it is as important as ever.

Education is now at the top of the political agenda. We live in exciting times and we need to seize every opportunity to show what colleges have to offer.

I was at a recent meeting of the Select Committee on Education and Employment where I heard Gillian Shephard commenting on the tendency of educational institutions to be “inward looking”. Sadly, I think she is right.

But it cannot stay that way. Further education colleges are far more complex organisations than universities or schools. They offer a huge variety of opportunities for many different kinds of students, essentially to level 3 but for a quarter of a million students to level 4 and beyond. They have shown that they can deliver what students want, and the nation needs.

Incorporation, with all its attendant ambiguities, has been welcomed, and principals and corporation members have demonstrated their capacity to lead and execute successfully their educational and business responsibilities. We must not use the colleges’ complexity as an excuse for introspection.

A new organisation, provisionally called the Association for British Colleges (ABC), must seize the opportunity offered by this increased political interest to help colleges look outward. With the birth of the ABC we must forget the past and build for the future.

We need to be involved in active campaigning and representation, working with everyone across the FE sector and the education spectrum, and building on the achievements which both the AFC and the Colleges’ Employers’ Forum bring to the new body.

What are the issues to watch for? Since 1989, unit costs per FTE student in FEhave declined by around 30 per cent on a comparable basis (that is, allowing for the additional costs which colleges have absorbed since incorporation). Further cutbacks are planned. The capital funding allocation is due to fall from Pounds 159 million to Pounds 59 million per annum, yet we currently spendPounds 60 million on equipment. There is no evidence that the Private Finance Initiative will want, or be able to produce, the much-needed investment on capital equipment. Yet it is essential; the numbers of teaching staff are likely to continue to fall and be replaced, in part, by an expansion of information technology.

Average levels of funding have been dramatically reduced, and last week we heard of the need for colleges to plan to a funding level of Pounds 14, instead of the already efficient Pounds 16 per unit. The squeeze is on, yet in his Annual Report the Chief Inspector of the FEFC commented earlier in the year that “colleges in areas where participation levels are already high, and where there is intense competition, will find year-on-year efficiency gains difficult to achieve”. Staff redundancies are on every college agenda; corporations are used to taking difficult decisions and will, quite rightly, carry on doing so, but there must be a point when an education service recognises that its core business requires a substantial level of people input. Quality should not be compromised.

There are major changes, too, in the curriculum. The Dearing Review of 16-19 qualifications heralds major change, with the incorporation of core skills through-out the curriculum. The recently launched Labour party document, Target 2000: Labour’s plan for a lost generation, pro-mises the abolition of the Youth Training Scheme and the introduction of Target 2000. The role of colleges will be crucial.

Of course, politicians will vie for the headlines and compete for the soundbites, especially in the run-up to a general election. But if they genuinely believe in the importance of education, training and lifelong learning within a competitive global economy, they are going to have to engage in a genuine political discourse.

The stakes are high. The problems are real enough. For example, around 65,000 (11.8 per cent) of 16-year-olds are, at present, not engaged in any form of education or training. We are entitled to expect that, instead of political point-scoring, there will be a debate designed to find solutions.

The Dearing Review of HE provides a useful model. All the parties have supported the review, its terms of reference and its committee membership. It will have an impact on FE and hopefully might result in a more equitable distribution of resources between further and higher education.

However, if the political parties were genuinely interested in education, training and lifelong learning, there would be a review of further education, too - perhaps Dearing Four?

It is within this environment that the ABC will be launched. Within the sector we need to put organisational conflict behind us.

We must strengthen every aspect of the confidence and effectiveness of the sector so that it can “walk tall” and look other parts of the education world in the eye. We must operate a tightly run ship at only a percentage of present joint costs, and look outwards to convince politicians and others of the important role colleges fulfil. It is encouraging that exciting and professionally respected people in the sector are coming forward for the new board. They will put the sector first, and build a new future. They and their professional staff must campaign together on a non-party political basis to influence politicians. For it is only with increased political recognition that the challenges ahead can be understood and addressed.

Ruth Gee is chief executive of the Association for Colleges