Education secretary David Blunkett surprised inspection agency chiefs at the Association of Colleges conference when he revealed plans for unexpected shifts in direction for further education.
Two key elements contained in a policy document, dubbed "Mr Blunkett's red book" by college heads, show a change in focus.
The first is an emphasis on the role of new area-wide inspections in helping 47 local learning and skills councils assess, plan and, if necessary, reorganise, local post-16 provision.
The second is a move to "institutionalise" links between colleges and universities building on existing collaboration and easing progression for further education students.
The impact of what Mr Blunkett unveiled was sweetened by an extra £1 billion to help colleges cope with the challenges.
But even Stephen Grix, inspection agency Ofsted's new head of post-16 inspection, was unsure what to make of Mr Blunkett's document.
Mr Grix told delegates gathered at the conference in Harrogate last week that it would mean more than doubling the number of planned-for area inspections to 38 by the end of 2002. "We are going to have to look at our plans again," he said.
Mr Grix drew particular attention to paragraph 26 of the document, in which Mr Blunkett describes how he would like "new models of institutional partnership" to develop under the LSC regime, which comes into force next April.
It says the partnership models "will involve new forms of college governance that draw universities directly into membership of the governing body".
They will "institutionalise" the development of links to improve access to higher education under the government's Excellence Challenge initiative, and "provide students with richer education provision - visiting lectures from university teachers, and increased support and expertise".
The first such models have already surfaced, brought about by three area inspections in London. Mr Blunkett announced that three new sixth-form colleges would be created, each with strong links to prestigious universities. Higher education would also be expected to play a part in creating new centres of vocational excellence.
Responses to this news were mixed. Most college heads saw the sense in strengthening links with schools and universities, but many were wary of getting too close.
Gary Bate, chief executive of the Calderdale Colleges Corporation, said it would be hard for colleges to collaborate more when they were still operating under the current system, which was designed to encourage competition.
He said: "It's up to the secretary of state to create the organisational structures that will allow it to happen. It has to be a win-win situation. If it's win-lose for anyone, it's just not going to happen."
Ann Limb, principal of Cambridge Regional College, said local LSCs would have an important leadership role to play in helping bring about the cultural change needed for collaboration in the sector. The emphasis on closer working relationships between further and higher education was "crucial". She added: "That is the area you have to confront, because that is not usually what goes on."
Stephen Bristow, principal of Radbrook College, said he was concerned that a move to create more specialist institutions could cause problems for some students, particularly in rural areas.
"The worry is that it will lead to a withdrawal rather than an extension of opportunities and increase the amount of resources going into overheads by encouraging more smaller providers in specialist areas," he said.
Ruth Silver, principal of Lewisham College, was enthusiastic about a return to local strategic planning, but added: "There is a risk that the move to specialism could be a big turn-off for students like ours. There must be a layer of comprehensive intake so that colleges are not seen to be turning their backs on the community."
A similar point was made by Conservative further and higher education spokesman Tim Boswell, who drew an analogy with health service patients finding their local hospital with no accident and emergency services.
"Students might turn up at their local college to find a sign that says 'no basic skills taught here'," he said.
Phil Willis, the Liberal Democrat further and higher education spokesman, said Mr Blunkett seemed set on telling the sector how to spend its money even before the LSC was in operation. This displayed centralist thinking that posed a threat to colleges' autonomy.
"Colleges have had to develop an entrepreneurial, flexible and responsive style to survive - and these are probably their greatest assets as they move forward. It would be disastrous to push back the tide," he said.
Scots applaud huge cash boost for FE
Alasdair Morrison, Scotland's deputy minister for enterprise and lifelong learning, has hailed a 50 per cent funding increase for further education over five years as a "huge vote of confidence" in the sector, writes Olga Wojtas.
Speaking at the Scottish Further Education Unit's annual conference in Edinburgh, Mr Morrison said: "I cannot stress how important the role of the further education sector is in helping to deliver our economic and social inclusion agendas. The colleges suffered greatly from chronic underfunding in the 1980s and most of the 1990s. We are now tackling that head on."
But Mr Morrison said the Scottish Executive would be demanding a great deal of colleges in the next few years and beyond. College funding would rise in cash terms from £290 million in 1998-99 to £436 million by 2003-04. Colleges have complained about the volume of consultation documents from the Scottish Further Education Funding Council, which began its funding duties last year.