A study investigated how a sample of British further education (FE) colleges used the first round of Competitiveness Funding and how it affected the development of collaboration between colleges, Technical Education Councils (TECs), industry, and government agencies. A key ingredient in successful fund bids was matching the project's activity and outcomes to the needs of the regional economy by colleges' and TECS' sharing of each other's labor market information. Few colleges reported active industrial support for their fund project at the bid-preparation stage. Regional partner agencies were infrequently involved publicly in "launching" the fund, but appeared distant from the bidding, approval, and implementation processes. The likelihood of successful outcomes was enhanced through evident compatibility between fund project activity and existing college planning. Ways in which colleges developed the local training market included targeting small and medium sized enterprises, funding capital development, and breaking down barriers to access. Project innovations were also enhancing colleges' offer to existing students and opening up new markets through the deployment of flexible learning opportunities. Potential benefits from collaborative work with other colleges included the following: sharing good practices, accessing staff expertise and cooperation from the higher education sector, dividing jobs according to strengths of partner colleges, and enhancing purchasing power. (YLB)