Degree awarding powers come in three flavours - taught degrees (TDAP), research degrees (RDAP) and Foundation Degrees (FDAP - in effect, a subset of taught degrees). The Higher reports that two colleges have now been awarded FDAP.
I have limited direct experience of the FE sector, having worked in HE institutions that received LSC funding in previous roles. From my perspective there seem to be two broad classes of FE Colleges which want to develop and grow major HE operations. Of these, the clearest and most straightforward are the specialist institutions - primarily in Art & Design. A steady trickle of specialist FE Colleges makes the transition into the HE sector by growing their HE activity until it is more than half the total. At least one of these, the Surrey Institute of Art & Design, is now a university in its own right. The reasons for growing the HE activity are not hard to seek - HE is better funded than FE - and the additional step into the HE sector also makes very clear sense - HEFCE, with its tradition of hands-off respect for institutional management and (at least up to now) its block grant funding principle, is clearly a much better body to work for than ever the LSC was. Reading the HEFCE Board papers will show you that these transitions are still continuing.
The two institutions gaining FDAP are quite different, as they are large (in the case of NCG very large) generalist FE colleges. Other Colleges seeking FDAP that I know of, such as Havering, also fit this mould. Here there seems little chance that HE can ever be the majority activity: at Havering it is about 1,000 students out of 7,000, at NCG 3,500 out of 40,000 (and NCG is growing at the FE end), and at New College Durham it is 16% (about 1,800 out of 11,500 learners). Havering primarily has validation through the Open University, New College Durham (I think) through Leeds and Sunderland, and NCP don't seem too keen to publish their partner names, but do mention UCLan in their annual report. Newcastle College (a subsidiary of NCG) has £11,089,410 of direct HEFCE funding in 2011-12, Havering £4,351,560 and Durham £3,725,762 (which, incidentally, is just outside the top ten for HEFCE funding of FE colleges). In other words none of them is in any sense in a 'Feudal' relationship with a local university, at least as far as I can see.
Whilst Framwellgate Moor lacks a pre-existing vocational HE provider, you could hardly say the same for either Newcastle or east London. So seeking FDAP can't necessarily be taken to be either an attempt to fill a market gap or part of a strategy of institutional transformation (as in the case of the specialist colleges). I understand it as part of a strategy to protect an established revenue stream in a relatively small group of FE Colleges.