Ed Weeple told an FE conference in Edinburgh last week that a fourfold rise in college budgets over more than a decade meant that "good financial management has become both more difficult and much more important, and in such circumstances it is imperative that colleges have appropriate high quality financial management systems, and people, in place."
Mr Weeple said the management of staff would also become an area of greater importance as changes in the market-place impact on the stability of colleges.
Colleges would have to look at whether they should run courses when the job prospects for students who take them are limited. And the responses colleges will have to make to changing labour market demands, especially the growing "24-hour culture", would impose further strains.
The pressure on colleges to run all-year round operations, Mr Weeple predicted, "will require more flexible and time-limited contracts; more hiring and firing; less stability in the workforce; and, almost certainly, more complaints, more tension and more challenge from staff representative bodies."
More widely, Mr Weeple said, colleges have two deep-seated problems: an undertrained workforce, particularly in small businesses, and the "national scandal" of the unacceptably large number of young people who "virtually disappear off the radar" as soon as they leave school.
More active management of FE staff, including classroom observation and target-setting, was urged by Rae Angus, principal of Aberdeen College. It was not enough simply to "let professionals get on with the job".
Performance management should be non-punitive but, Mr Angus said, "in extremis there will be serious consequences".