FURTHER EDUCATION. Most people working in further education knew that some colleges were in dire financial straits. But it was not until September this year that the seriousness of the problem was confirmed.

The Further Education Funding Council reported that at least 40 colleges were in debt and that one third of the sector was in a weak financial position. This reflects a deterioration on the previous year and prompted speculation that mergers or closures could eventually hit 100 colleges.

College authorities had spent the year making optimistic noises about student recruitment but when enrolment week arrived many found they did not make the numbers. With the Government requirement to make efficiency gains of 5 per cent, and the seemingly endless lecturers' contract dispute still rumbling, they have faced an uphill struggle. The numbers of principals taking time off work with stress-related illnesses was said to be at an all-time high.

The funding council has been busy this year organising inspections at colleges around the country, and the four-year cycle is about half way through. The inspection that perhaps caused most upset was Handsworth College in Birmingham which was heavily criticised for "poorly planned teaching" on its franchise operation, the most extensive in the country.

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The funding council has since launched a special committee to look at the wider issues raised by franchising which has expanded considerably since incorporation.

The extension of higher education into colleges was also a source of debate during the year. University vice chancellors told their funding council that further development of higher education provision in the college sector would have few advantages and numerous disadvantages. Many colleges see degree and sub-degree level courses as vital to their own financial health and as the key to successful access programmes.

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Others are seeking to become closer to neighbouring universities. Leeds Metropolitan University announced the first stage of a cautious merger with nearby Airedale and Wharfedale College, which will be watched closely by many.