The contract dispute is affecting morale. David Charter reports. Talk to college principals and lecturers around the country, and the word most commonly mentioned in connection with their long-running contracts dispute is "disarray". A shiny new sector, created when further education colleges became independent from local authorities in April 1993 and which should by now be a famous success story, found itself tarnished from the start.

The undeniable achievement so far is the huge rise in student participation, in line with Government targets for 25 per cent growth in four years.But alongside this is the failure by both employers and staff unions to resolve differences which sour the atmosphere of daily college life. Not even the Arbitration, Conciliation and Advisory Service can now tempt the main lecturers' union, Natfhe, to talk to the Colleges Employers Forum about new contracts.

Meanwhile, planning provision means allowing for two very different types of contract holders, especially because colleges are trying to expand by holding classes at the weekends or during traditional holidays.

"The situation is a mess. Ordinary managers and ordinary lecturers are stuck in the middle," said one principal, a CEF member considering whether his college should continue in membership when its subscription falls due in the summer. "What is worse is that the dispute has been going on for two years and it has been like a cancer eating away at morale. Smaller colleges just cannot afford the time it takes up."

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The two sides got off on the wrong foot from the start. Months before incorporation, the CEF issued a model "flexible" lecturers' contract for consultation with college managers. With its open-ended hours and reduced holidays, it seemed to many like a worst case scenario.

For Natfhe it was the unacceptable shape of things to come and the union refused to discuss anything of the kind. The majority of its members had the Silver Book, the terms and conditions with the local authorities, which would be protected under transfer of undertakings legislation.

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The Silver Book allows up to 36 weeks teaching a year, seven consecutive days off at Christmas and Easter, and at least six weeks holiday in the summer. It limits lecturers' working week to 30 hours.

The CEF Professional Academic Contract contains a minimum working week of 37 hours and a maximum 35 days holiday, excluding Bank Holidays which may have to be worked and extra time off taken in lieu. There are no references to class-contact hours.

This contract began to be used for new and promoted lecturers from July 1 1993. Although talks began in September 1993, the pattern of dialogue, breakdown and industrial action was set in train by the failure to reach agreement by the end of that year.

Natfhe had put forward its "December Proposals", which included an increase to 24 hours weekly class contact time. The CEF did not agree. A year ago, Natfhe adopted a twin-track approach of local as well as national talks. There have been around 20 college deals of varying flexibility - not many for more than 350 colleges.

Natfhe's Tom Jolliffe resigned as chairman of the national negotiating team in protest at the twin-track approach. "National bargaining is the Crown Jewels for any trade union. Local bargaining is a very difficult terrain to move over - you need a lot of staff and organisation," he said.

Local talking is very time-consuming for all involved, especially as neither side wants to sacrifice their positions for an unsatisfactory compromise. However, principals are being forced to push for greater contract flexibility to earn a 2 per cent government hold-back on their annual budget.

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"It is extremely frustrating because the whole point of setting up the CEF was to sort out the contracts dispute," said Mike Austin, principal of Accrington and Rossendale College, who helped establish the CEF. "For that they charge us a large amount of money, and they have failed to do it. No one underestimates the difficulties of dealing with Natfhe but that is what you pay your money for. Dissatisfaction with this one issue becomes a general discontent. Staff here are very enthusiastic, but you will find colleges where the general atmosphere has been soured."

He believes the CEF went about negotiations the wrong way by being too confrontational - but also members of Natfhe's national executive do not have agreement on their agenda. Certainly a majority of that executive voted against the latest proposal, from the minority lecturers' union ATL, to meet the employers at Acas, against the advice of their officials and John Akker, general secretary."We have not ruled out the possibility of going to Acas at some stage but in the meantime we are continuing to pursue agreements with individual colleges and will be using industrial action if necessary," said Mr Akker.

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"We want to drive home the importance of securing formal limits to workloads that can be expected of lecturers."

CEF chief executive Roger Ward tends to be demonised or canonised in this debate, depending on which side of the fence you sit. In 1990, he led the Polytechnic and Colleges Employers Forum to a settlement at Acas with new universities' contracts. Maximum contact hours were written in.

Mr Ward has consistently offered tough bargaining positions, to the point where, when talks resumed last month, he proposed maximum hours should be phased out and would only discuss new contracts for Silver Book holders. However, when it came to considering Acas he said he would go with no preconditions. His style led to talk among some principals of a renegade employers' group dealing direct with Natfhe - but none has yet emerged.

CEF board member Keith Scribbins, chairman of governors at South Bristol College, believes any rival employer negotiating group would only further complicate a situation tending towards atrophy. He believes that the issue of class contact hours, ostensibly the sticking point, is a dead issue.

"A new contract should express the professional workload in terms of the various tasks performed, whether it is teaching or preparation or using new technology," he said. "It cannot be done in class-contact hours any more. Teachers do many things more valuable than standing up in front of a class teaching. It is just not a good description of what teaching is any more."

The demise of the Silver Book is inevitable simply through staff turnover, but laissez faire will only prolong the blight of the new sector. Mr Scribbins, too, hopes Natfhe will return to talks.

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"To me what it is all about is the survival of national bargaining," he said. "For a union to repudiate national bargaining would be to invite anarchy."