To change the collation of a column which is a part of an INDEX, your have to re-create the INDEX(es)

IF ( OBJECT_ID( 'tempdb..#test' ) IS NOT NULL )

DROP TABLE #test

CREATE TABLE #test( SomeCol VARCHAR(10) COLLATE SQL_Latin1_General_CP1_CI_AS )

CREATE INDEX IX_1 ON #test( SomeCol )

DROP INDEX IX_1 ON #test

ALTER TABLE #test ALTER COLUMN SomeCol VARCHAR(10) COLLATE Latin1_General_CI_AS

CREATE INDEX IX_1 ON #test( SomeCol )