Further education colleges could be presented with a multimillion pound bill by the new Learning and Skills Council next year.
Those that have been allowed to carry forward a recruitment deficit for the past two years may find themselves being asked by the LSC to settle up either in April next year or the year after, the Further Education Funding Council said this week.
In the case of some colleges, the "tolerance" margin of 2 per cent below recruitment target brought in by the FEFC in 1998-99, and carried over to this year, would translate into a bill for hundreds of thousands of £. The FEFC said about a quarter of the sector's colleges were carrying a 2 per cent deficit, while up to half owed some money because of under-recruitment.
This could mean a bumpy ride for LSC chief executive John Harwood when he addresses the Association of Colleges' annual conference in Harrogate next week.
Mr Harwood told delegates at the FEFC's farewell annual general meeting two weeks ago that he hoped to effect a smooth transition to the new regime, continuing with the FEFC's current funding system for a further year.
But the FEFC said a decision was yet to be made on whether the tolerance margin would also be carried forward by the LSC.
John Brennan, the AoC's director of FE development, said he thought it was unlikely that the LSC would write off the deficit, even though some college heads had mistakenly thought of the 2 per cent margin as notional credit that did not have to be repaid.
"If they wrote it off, they would be subject to criticism since, effectively, they would have presented the sector with a gift," he said.