Sir Ron (now Lord) Dearing recommended in his 1997 higher education report, that higher education should be funded directly by the Higher Education Funding Councils wherever it is provided.

* From 1999-2000 sub-degree and degree courses run by further education colleges in England will be funded by the HEFCE.

* The FEFCE transferred Pounds 40 million to the HEFCE to help cover the cost.

* The HEFCE added Pounds 6.5million to this because higher education in colleges has always been funded at a lower rate. The HEFCE plans tocontinue to converge higher education funding.

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* The HEFCE already funds higher education courses at around 70 further education colleges. These had been funded by the Polytechnics and Colleges Funding Council, which merged with the Universities Funding Council in 1992 to form the HEFCE.

* The bulk of the furthereducation colleges werefunded through localeducation authorities untilcolleges were incorporatedin 1992.

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* Colleges also provide degrees and sub-degreequalifications on a franchised basis. These continue to be funded by HEFCE, but the funding goes to the "parent" university rather than to thecolleges concerned.

* Unemployment for holders of HNDs runs at about 6 per cent; for degree holders it is about 9 per cent.

* Half of HND holders goon to complete degrees.

* HNDs command a wage premium of between 11and 12 per cent, while degree holders can expect 15 per cent.