In the "age of austerity", educational institutions in many countries are under pressure from a variety of sources to work more closely, reduce costs and raise educational performance. There are a number of possible outcomes that follow on from developing closer institutional ties: sharing of professional expertise through best practice networks, developing greater coherence within the local curriculum and opportunity for students' progression within the education system, and of course, ultimately merger and take-over. The environment within which institutions operate is in a state of flux but is moving clearly towards meeting the challenges presented by Central Government. There has been a shift in British Government policy during the past three decades which has been influenced by ideas drawn from economic instrumentalism, New Public Management and Public Choice theory. Colleges are increasingly viewed by Central Government as a convenient vehicle for local, economic and social regeneration, as they are able to act both independently or as part of a local hub of diverse educational providers. This research project investigated the nature of change, focusing on four case studies of new organisational forms. The findings are contextualised within a wider discussion of organisation theory. Is there a future for British colleges beyond their once traditional educational remit, and what is the future balance between state and private sector providers, are questions at the heart of this investigation. Although there was some opportunity for targeted interviews, the research was primarily desk-based and involved the analysis of documentary material. (Contains 2 figures and 2 tables.)