He declared: “We need a concerted drive to raise standards - just as in schools” and warned that “too often retention and achievement rates are unacceptably low”.

Mr Blunkett echoed Labour’s “zero tolerance” policy towards schools, ordering mergers, more co-operation and better staff training within further education.

In a letter to Further Education Funding Council chairman Sir Robert Gunn,Mr Blunkett said: “I also want to see a more pro-active approach to mergers so that the sector will be better placed to live within what will always be limited resources.

“Rationalisation would also contribute to the improvement and extension of FE provision by helping to reduce duplication of the more popular offerings which can occur at the expense of ‘minority interest’ courses.

“I therefore look to the council for advice on how to promote more college mergers and collaboration over the next two to three years.”

He announced that part of the FE competitiveness fund - which has been restored after a #163;10 million cut earlier this year - would be used as a cash pool to push forward the “rationalis ation and collaboration agenda”.

The FEFC has already started work nudging colleges towards merger. FEFC chief executive David Melville said this week that as many mergers were being discussed this year than had taken place since colleges won their independence in 1993.

Mr Blunkett’s letter, sent to the FEFC after he announced an #163;83m package for colleges, came after chief inspector of colleges Jim Donaldson identified drop-out and retention rates as a key problem in colleges - a message reinforced by FE standards watchdog Sir Bob Reid at the FEFC annual general meeting this week.

Sir Bob warned that achievement rates “vary between courses, programme areas and institutions . . . it is the scale of this drop-out within the sector which is of the most concern.

“The need for governors and senior managers to focus on and ameliorate low retention is a key area. ”

Target-setting is an integral part of the new college inspection regime introduced this year. But Mr Blunkett’s orders to principals and governors show that ministers will demand results.

FEFC officials are understood to be considering a national targets regime as a possible answer to the Secretary of State’s concerns.

The best colleges already use internal targets to raise students’ achievement. But many do not have systematic target-setting policies.

Mr Blunkett said priority should be given to widening participation among the over-19 age group, as well as meeting targets for achievement among 16 to 19-year-olds.

Mr Blunkett said: “FE has a vital contribution to make to the national agenda. It is a crucial platform for lifelong learning to which we as a nation must commit ourselves if people are to lead prosperous and fulfilled lives.”

Judith Norrington, curriculum chief of the Association of Colleges, said target-setting was “something we need to turn the agenda towards in the sector”.

* Colleges this week repeated their calls for more comprehensive league tables. AOC officials say the leagues ignore the vast majority of courses run by the FE sector.

Text of David Blunkett’s letter to colleges:

12 November 1997

Sir Robert Gunn Chairman FEFC Cheylesmore House Coventry

Dear Bob

At today’s AOC conference I am setting out the Government’s vision for further education. I am writing now to indicate how the Government would wish the Council to work with it, the sector and other partners to realise that vision.

FE has a vital contribution to make to the national agenda. It is a crucial platform for lifelong learning to which as a nation we must commit ourselves, if people are to lead prosperous and fulfilled lives. By reaching out to the community FE can help to reduce social exclusion, increase employability and raise the nation’s economic strength and morale.But if colleges are to realise their potential, there needs to be a resumption of growth in student numbers, particularly geared to widening participation, on a financially sound basis.

The additional funds I have announced today, including a #163;60m addition to the FrFC baseline in 1998-99, provide for a growth of some 20,000 FTEs (which could equate to 70- 80,000 actual students) in the next teaching year, particularly to take forward the Kennedy agenda in relation to 16 - 19 year olds and adults, while restricting the squeeze on unit costs to no more than the rate of inflation. My officials will shortly be in touch with the Council about the details of the financial settlement for next year. We are also looking at funding issues for 1999-2000 and beyond, in the context of the Prime Minister’s pledge of an extra 500,000 students in further and higher education by 2002.

We need to ensure that the resources available to FE, including those I am announcing today, are used to best effect. The priorities I would wish to see reflected in your funding arrangements are:

- Widening participation among those aged 19 and over to take forward the agenda set out in Helena Kennedy’s report ‘Learning Works’ so that more of thosewho have not traditionally taken advantage of the opportunities are brought back into learning. I look to you to advise on the mechanisms for securing this priority within the overall growth of student numbers; as well as to secure changes in the funding methodology to reflect more fairly the costs of providing for the groups concerned. The additional #163;3 million I have announced to boost, by 50 per cent, the FE Access Fund will help to encourage into learning more students who would otherwise have been deterred.

- Provision for the 16 - 19 group. This priority arises in the first place from the statutory duty placed upon you to secure sufficiency of provision for those in this age group who want full-time education.

In addition, our Target 2000 commitment underlines the vital importance of raising participation rates among 16 - 19 year olds, precisely because continuing in education at 16 can be a vital underpinning to future lifelong learning. FE has a critical role to play in stimulating and providing for widening participation in this group. I shall be making a separate announcement and consulting you about further measures in this area.

In the context of the funding priorities outlined above, I am looking to make progress on securing a fairer balance between state and employer contributions to employer-led provision in FE against the principle that employers should be meeting at least half of the costs.

I have asked my officials to work with yours to secure arrangements in 1998-99 for an extra #163;20m in employer contributions to the costs of such provision.

The priority tasks on widening participation and on the 16 - 19 group which I have outlined above are vital to the nation. We must ensure that FE is in the best possible shape to undertake them. First, the sector must be organised as cost-effectively as is practicable. To some extent this may be secured by a greater degree of collaboration both within and between sectors - particularly in respect of 16 - 19 Annex H provision, where my colleagues and I have been encouraging the constructive dialogue between the Council and the LGA.

But I also want to see a more pro-active approach to mergers so that the sector will be better placed to live within what will always be limited resources. Rationalisation would also contribute to the improvement and extension of FE provision by helping to reduce duplication of the more popular offerings, which can occur at the expense of ‘minority interest’ courses. I therefore look to the Council for advice on how to promote more college mergers and collaboration over the next two to three years, in the context of the funds I am making available for the rationalisation and collaboration agenda through the refocus Ed FE Competitiveness and Development Fund.

As in all other areas of education, quality must be a central issue for FE. There is a great deal of good practice in FE, and some colleges achieve outstanding results - often against the social and economic odds. But across the sector, and within individual colleges, too often retention and achievement rates are unacceptably low. The rationalisation and collaboration agenda I have set out above will, I believe, help to improve quality. But it will not, by itself, be sufficient. We need a concerted drive to raise standards - just as in schools. I shall be pursuing with the Council, FEDA, the AoC and others the implementation of a series of measures which I expect all colleges to adopt: systematic initial assessment, including - where necessary - delivery of basic skills; a systematic approach to target-setting for retention and achievement; and a greater emphasis on staff development. I would also like to see the Council with FEDA and the AoC doing more to promote and spread good practice throughout the sector.

This is a challenging agenda. There are, of course, other issues which I shall wish to discuss with the Council in due course. In the meantime I look forward to receiving your advice on the key issues in this letter and I shall be seeking an early opportunity to discuss these with the Council.In the meantime let me assure you of my commitment to a successful and effective further education sector as a key part of our drive to raise education standards and to promote lifelong learning for all.

I am copying this letter to Terry Melia (FEDA) and Howard Phelps (AoC). I should be happy for you to make it available to colleges.

With all best wishes,

DAVID BLUNKETT