Exciting but worrying times lie ahead for colleges, John Brennan says.

Qualifications for 14 to 19-year-olds will be withdrawn in 2014, as proposed by Mike Tomlinson in his report, and the new diploma system will begin. Aligned with this will be work-based learning through the apprenticeship framework, and both will connect with the adult vocational framework scheduled for completion in 2010.

So far so welcome, but will higher education be in step with these developments? Will those learners beginning their diplomas in 2014 progress smoothly to higher education? Will the adult credit framework mesh with the credit achieved in higher education so people can progress seamlessly to higher level qualifications? Can we create a post-qualification admission system to ensure applicants are judged on achievement, as recommended by in Steven Schwartz in his report?

This is what we must strive for, but it will require a carefully managed programme over the next ten years, with implications not only for curriculum change but also for funding, governance and performance management.

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Alongside this is the prospect of great instability - at least in the short term. The introduction of variable fees from 2006 will exacerbate competition between institutions offering higher education. Colleges expect to feel the brunt of this. Many of those delivering higher education are highly reliant on universities for validation and funding. This makes college-delivered higher education vulnerable. There is a danger that fees could reduce access to locally available higher education that is crucial to government plans to increase and widen participation. The seamless local progression from the Tomlinson diploma, apprenticeships and adult framework that colleges want to put in train could be sidelined by the need to protect what is already in place.

There are worrying examples of universities contemplating defensive action to protect their brand, to the detriment of partnership arrangements with colleges. Already there are reports of some withdrawing from validation arrangements, particularly for foundation degrees, and others are validating only programmes they also fund.

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This latter development has considerable repercussions for colleges getting their money directly from the ³ÉÈËVRÊÓƵ Funding Council for England, particularly where they believe their local market may be better served by foundation degrees rather than by the higher nationals they offer now.

And in the middle of all this colleges are developing their fee policy for 2006. When most universities will be aiming to levy the maximum ?3,000, will charging less provide a market advantage? Or will college-based degrees just be perceived as being of lower quality?

Where colleges deliver franchised programmes, the franchising university will set the fee without necessarily considering the market in which the college operates. At some colleges, students come from deprived and debt-averse backgrounds; any rise in fees, albeit deferred, could harm their recruitment.

Colleges need to feel part of strategic planning if they are to meet the demands of 2014. They require access to the programmes that will meet local needs, access to funding to deliver those programmes and power to set an appropriate fee.

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There is some cause for optimism with the validating programmes developed to meet local need: Foundation Degree Forward's Validation and Quality Assurance Service, the Open University validation service and the emerging University Vocational Awards Council consortium approach for vocational progression routes. But funding remains an issue. In particular, Hefce needs to reconsider its drive to shift colleges towards indirect funding.

While some colleges value their arrangements with their partner university, others find the relationship constraining. A protocol for franchise relationships between higher education institutions and colleges is urgently required to underpin working and generate the necessary trust for collaborative curriculum development. To protect what is on offer locally, Hefce also needs mechanisms to transfer funding in cases where universities withdraw from franchises without good reason.

It is no secret that many colleges prefer direct funding: it frees them to manage provision and set fees. But it does not provide access to capital funding for buildings, an issue Hefce and the Learning and Skills Council have been considering for far too long without resolution.

The recommendations in the Foundation Degree Taskforce report for an increase in the proportion of foundation degree numbers being directly funded in colleges is therefore timely and welcome. Equally welcome is the recommendation that Hefce and the LSC publish a code of practice on how institutions should deal with issues arising from the distribution of income between colleges and their higher education partners.

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The vision for 2014 beckons. But we need a programme of action with a clear timetable to ensure that unsynchronised changes do not undermine the benefits.

John Brennan is chief executive of the Association of Colleges.

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