Mr Blunkett, speaking at the annual conference of the Association for Colleges, in Harrogate announced a boost of #163;725 million over the next two years for the sector where about half of colleges are operating deficits.
The figures include #163;255m for 1999-2000 which was announced in July in the Government's comprehensive spending review. The cash was welcomed as an indication that the Government was prepared to keep to its pledges to invest in FE. But in addition, Mr Blunkett said there would be an extra Pounds 470m in 2000-2001 to improve standards, widen participation and modernise equipment and buildings.
Although AOC delegates had been promised all week by speakers - including Baroness Kennedy - that Mr Blunkett would have some good news for them, nobody expected it would be on quite such a scale.
But there was an explicit warning to the colleges. He warned governors and principals that he would be as tough on low spenders and under performance in colleges as in schools.
He said: "The FE sector provides four million young people and adults with the opportunity to gain qualifications and skills which are vital to their future and to our future. Colleges play a crucial role in ensuring education and training is available to people, irrespective of background or income. This announcement will significantly improve funding for further education - with the biggest increase ever.
"But FE is too important to our economy and society for us to tolerate poor standards or a lack of accountability. Too many students drop out and too many fail to get their qualifications. The extra money I am announcing comes with a warning to colleges; we will be as tough on failing colleges as we have been on failing schools.
"We now have a robust system in our schools, where nobody is in any doubt about the need to improve standards. We must develop the same approach in FE - where there is much good practice which we will want to spread, but there is also too much poor or inadequate teaching. We expect every further education lecturer in future to have a proper teaching qualification - and where the inspectorate finds an FE college to be failing, I will expect to see a decisive response."
The Education Secretary also said that he would be providing Pounds 69m in 1999-2000 and Pounds 114m in 2000-2001 for FE students and those in school sixth forms to support transport, childcare and other costs. This would extend access funds to students in need. It includes the new education maintenance allowance pilots for low income 16 to 19-year-olds.
Part of the overall package is the new Standards Fund of Pounds 35m in 1999-2000 and Pounds 80m in 2000-2001, again modelled on schools. The money will be used to target intervention in failing colleges. For example,it could help to turn round colleges in financial difficulty, aid mergers where desirable or simply help colleges to spread their good practice point.
Also in the package is money to widen participation by adults and support more young people gaining qualifications. The Government plans to expand FE by 700,000 students in 20012002. Capital funding also gets a boost with Pounds 40m in 19992000 and Pounds 55m in 20002001 to be spent on information technology and access to colleges for disabled people.