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This report aims to inform the quality improvement policies of the Learning and Skills Council (LSC) and the Quality Improvement Agency (QIA) and focuses on the role of funding incentives in promoting quality improvement in further education colleges. The data used was gathered from structured interviews with principals and senior managers at 28 further education colleges. The report presents the findings from this research along with the views of a sample of representatives from the LSC and concludes that while funding enables quality improvements, it does not drive them. Three recommendations are given: (1) that colleges should be able to rely on consistent funding as an enabler of, but not a driver for, quality improvement; (2) that resources should be focused on developing capabilities; and (3) that change instruments should be based on flexibility and balance. Show less