BUT DESPITE the plight of underpaid university staff outlined above, distinguished professors on Pounds 30,000 a year and manual staff paid less than the Council of Europe decency threshold may not be the big problem. This week's funding allocations to further education colleges in England (page 8) show that they have been poleaxed by losing over Pounds 100 million of demand-led money which they used to earn by bringing in new students. One college is getting less than half what it asked for, and will respond by taking on over 5,000 fewer students. The signs are those of a sector in crisis.

The expansion of further education has been less visible but no less striking than that of the university sector. It has cost money, but universities are still a dearer option for educating young adults, a fact that the Government is likely to regard as important in the coming budget and beyond. The imminent report on further education from Helena Kennedy, a member of the Blair circle, may well make the point that money spent on further education is an effective way of expanding education for the soon-to-be-abolished underclass by involving people who have abandoned formal learning.

This means that the sales pitch for the further education sector in the coming budget is a strong one. But the money needed to restore further education to financial health would use up a sizeable part of the proposed windfall tax.

This argument may not work equally well for all further education colleges. Agricultural colleges, for example, may suffer from the general decline of farm employment, and only three of the 30 are getting more money under the current FEFC dispositions. Look out for more such colleges remodelling themselves as centres for general further education in rural areas which have too little post-compulsory provision. However, even this is expansion, and would need investment for which at the moment there are no funds.

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If new money is found for further education, there will be an almost infinite number of valid claims on it, especially from inner-city colleges which are often in areas of high social need. Many need cash for essential running repairs, let alone expansion. Worse, they stand to be disadvantaged by the benign-sounding practice of convergence, which means the disappearance of weightings to reflect the higher costs of operating in the inner city.

In the longer term, much may flow from an increased realisation of how much ÖйúAƬ goes on in further education colleges. At the moment, this work is funded by the ÖйúAƬ Funding Council for England in more than 70 colleges, and is a major source of income for the further education sector. If Dearing recommends that further education colleges do more such work, he may want to make things more systematic by putting the money through the FEFC.

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In addition, the poor funding outcome seen this week will mean more pressure for college mergers, although it is all too easy to overstate the savings that this might produce. Even the savings on management that ought to emerge can be eaten into by the need to pay the people who get the bigger and better jobs that mergers create. Even so, further education colleges swallowing each other or merging into universities look likely to be an increasing pattern. But mergers cost money before they start to save it, especially in redundancy costs.

Further education is the poor relation of the education family, sitting Cinderella-like between schools and universities. Yet it is colleges which harbour the greatest potential. If Britain wants to build a truly seamless learning society then further education must surely be ideally placed to supply the stitching. Additionally, it is the only sector to furnish society with the highly skilled, vocationally orientated people it so desperately needs to improve international competitiveness.