A standard unit of funding and tight controls on funded growth have been introduced in Welsh further education to save some colleges from financial collapse.
The Further Education Funding Council for Wales said this week that only three FE institutions receive units of funding above a target standard level, after a three-year convergence exercise. It announced recurrent grants totalling more than Pounds 150 million for 1996/97, a real terms cut of 1.5 per cent.
The council said fully-funded growth had been set at 4.7 per cent. It was hoped this would help prevent the sector from "overheating" through expansion and eroding the unit of resource. Growth beyond 4.7 per cent would only attract about 40 per cent of the full rate of funding.
About Pounds 2 million has been saved by the council through its programme of pushing college units of funding down to a common level. Of this, Pounds 1 million has been released to help pay for growth in rapidly expanding colleges.
John Andrews, the funding council's chief executive, said that even with the tight controls, it was expected the sector would exceed the Welsh Office target of 200,000 enrolments by 1999. The danger of some colleges experiencing financial problems as a result was heightened by the fact that most of the growth was taking place in expensive areas of provision such as adult literacy and training for industry.
"We have to prevent the sector from overheating because if it does some institutions could go to the wall. We have to maintain control not just to protect slow growers but to give them time to adapt to changes in the sector," he said.
Up to 10 per cent extra grant is also being provided by the council to support colleges recruiting students from areas of socio-economic disadvantage. Recruitment in this area grew by 29 per cent over the past year.