THERE have always been concerns about the way colleges are funded, and the mere fact that it takes a book (How to Apply for Funding) and more than 100 pages of additional guidance to explain incompletely how it works demonstrates why.

Perhaps the chair of Aylesbury College was going to the other extreme when he remarked (on the suspension of his principal) that if you can’t explain a funding system on one side of A4, it isn’t worth having.

It is, however, possible to argue that some of the management catastrophes in the sector were disasters waiting to happen because of the arcane nature of the funding regime. You need only read the account of the fall of Halton College.

What went wrong at Halton and elsewhere is, in part, the product of a funding system open to misinterpretation and exploitation, where the complexity of the approach can lead to a mistaken or misunderstood result.

The Further Education Funding Council’s methodology is analogous to our taxation system - a complex set of rules and arrangements that postively invites people to work the system. Franchising was one loophole through which a coach and horses has been driven.

The improper use of franchise arrangements is precisely what two of this summer’s FEFC circulars seek to restrain. However, also in my post last week was a letter from a Cornish training group. They offer help with finding a way round the new regulations to principals who may be forfeiting sleep at the prospect of losing income from franchises.

The FEFC has yet to publish what the average level of funding in the sector would be without franchising. Until it does, we cannot have a picture of how franchise activity has, or has not, distorted the financial base of the sector.

Meanwhile, many colleges (particularly those that have spent the past five years making cuts) believe that franchising may have forced the sector to converge to an average level of funding which is artificially low.

The predecessor to the FEFC system was transparently unfair, but the current arrangement has the transparency of the Emperor’s New Clothes. What is clear now is that, in the interests of equity, we have created a machine of Byzantine complexity that very few people really understand. And, before the machine collapses under its own weight, there is money to be made by those who can work it.

Person X (name on request) is available for pound;1,000+ a day and worth every penny. He has trained hundreds of curriculum managers in how to plan the curriculum in such a way as to maximise the units earned, an art known as “unit farming”.

Also available to colleges are “unit hunters”. Y and his team are run off their feet rushing from college to college hunting through individual student records looking for units that managers have missed through miscoding. They charge pound;2 + VAT for every unit found and are so confident that they can find extra hidden units that they work on a “no find, no feel” basis.

The people advising on farming and hunting are in the main from the large accountancy firms, the same sector as the company that audited the accounts for Bilston, Wirral and Halton colleges and managed to miss their problems.

These companies now understand fully the complexity of managing the business of colleges. This was one reason given by our auditors for their increase in fees from pound;300 a day to pound;500.

The brunt of the funding methodology falls on curriculum managers. It consumes their time and energy, time that would be better put into improving the quality of teaching and learning. We are all obsessed with counting and sorting units - an activity that brings no benefit whatsoever and is a poor measure of management accountability. FEFC inspection reports make it clear that our skill at counting and sorting has now become the major test of management performance.

Over the past five years, the funding methodology has become more arcane and more expensive to sustain. The White Paper, Learning to Succeed, brings a glimmer of hope that the Government might be brave enough to introduce one funding system for all post-16 work.

The recent circulars on “Franchise and Local Provision” exhort colleges to play together nicely and guide us towards a new era of collaboration. However, the best of these intentions could well be undermined by the sheer complexity of the funding formula. There must be a simpler solution.

Annette Zera is principal of Tower Hamlets College