Scottish further education colleges are being asked to "shoot blind" in consultation on a new funding formula in the absence of information on the sector's budget, the Association of Scottish Colleges has warned.
Scottish education minister Brian Wilson this week published the report of the Scottish Office's funding methodology review group, whose task was to find a funding formula that promotes "stability and predictability" but still allows for growth. Its remit did not include considering the sector's recurrent funding.
But Tom Kelly, ASC chief officer, said: "The tricky issue is can this methodology be made to work when funding has failed to reflect past growth, much less any future growth? The question of whether the methodology works depends not just on the detail but the amount of funds available."
Since incorporation, colleges have been moving gradually from a historical funding formula to one intended to reflect their success in attracting and retaining students. This does not distinguish between further and higher education courses or between full- and part-time work. Nor does it take account of quality assessment.
The new report suggests setting up three funding streams: core funding to support what each college sees as its core provision; strategic funding for new developments; and "student unit achievement funds" to create a more direct link between funding and quality.
Mr Kelly said: "The problem is that before you can get down to core funding, you have to decide how much you are setting aside for other elements. There are so many unknown variables."
Mr Wilson said that when funding arrangements were first introduced after incorporation, the priorities were to raise student numbers and to encourage efficiency and innovation in colleges. But expansion had been accompanied by an "unhealthy degree" of wasteful competition and duplication.
"This runs counter to the government's stated aim of promoting coordination between colleges, maximising access to courses and ending needless competition."
Mr Wilson said he was prepared to change funding arrangements if it would give a boost to a high-quality, efficient further education sector.
Colleges and other interested bodies should reply to the report by the end of December.