England has a two-sector system of higher education and further education. Shaped by legislation in 1988 and 1992, the architecture of this system was intended to concentrate each type of education in separate institutions and separate sectors. In recognition of these different missions, each territory came under different funding and regulatory regimes, with little or no movement of institutions anticipated between sectors. These arrangements continue, although Government policy is now to support and expand higher education in further education colleges. This policy turnaround is part of a larger strategy or experiment to change the future pattern of demand for, and supply of, undergraduate education. However, the college contribution to this new higher education is neither co-ordinated nor protected. Rather, further education colleges compete as well as collaborate with institutions in the higher education sector, under conditions of complexity, uncertainty and dependency.