The funding of the FE (Further Education) sector in England and Wales has undergone a major transformation since the Further and Higher Education Act of 1992. Newly incorporated colleges are now funded on a national basis through the FEFC using a common formula. This article explores the explicit, if not always articulated, aims of the originators of the methodology. It discusses the many unintended consequences which have resulted. It concludes that many colleges, faced with a business-orientated culture purveyed through the new funding methodology, are finding themselves unable to make the required adjustments.
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