Funding for adult further education may be cut by as much as 10 per cent next year, according to an initial analysis of the Government's FE spending strategy.
The Skills Investment Strategy announced a 3 per cent reduction in the national funding rate across the board for colleges and an additional 3 per cent cut on top of this for Train to Gain provision.
But there is concern that the investment strategy may be hiding a far greater cut to college budgets.
Julian Gravatt, assistant chief executive of the Association of Colleges (AoC), said: "The key question for colleges on 19-plus funding is how much money they will have in the 201011 academic year (August to July).
"The Skills Investment Strategy does not make this clear because it reports budgets in government financial years (April to March). We're crunching the numbers, but estimate the total adult budget - not including Train to Gain or apprenticeships - is cut by 8 to 10 per cent."
Mr Gravatt said the department for Business, Innovation and Skills needed to be honest with colleges as they budget for next year.
"If not, then the first conversations providers will be having with the new Skills Funding Agency next April will be about lots of cuts to their provision that they do not understand," he said.
Initial analysis by the AoC also reveals a growing gap between the funding colleges have and the money available to universities.
The gap between an adult full-time equivalent (FTE) student in further education and an FTE in higher education could reach more than pound;2,000 in 201011, according to the AoC.
Figures are tentative at this stage as the latest funding settlement for HE is yet to be announced and colleges await further detail following the publication of the strategy.
But, based on the projections for higher education income, including student tuition fees paid upfront to universities by the state, the AoC figures show a rapid fall in FE funding relative to HE (see graph).
In 200304, funding per full-time HE student was pound;882 higher on average than in FE. By 200607 it was pound;762 higher. But in 200708 the gap leapt to pound;1,045. And in 2008-09 it jumped again to pound;1,686, climbing to pound;1,719 this year. The AoC projects the gap to be pound;2,054 next year.
Mr Gravatt said three elements were responsible for the widening gap. First, he said, is the effect of the fee subsidy, which means the state pays the maximum pound;3,225 student tuition fee upfront to universities, with students repaying the Government over a 15-year period.
Second is the Government's commitment in 2004 not to cut the unit of funding in higher education.
The third major impact on FE funding was the decision in May this year to seek pound;180 million in efficiency gains in higher education and pound;340 million in FE, despite the former budget being larger - a decision reflected in the spending levels proposed in the Skills Investment Strategy.
Nick Linford, special adviser on funding and performance for Edexcel and author of The Hands-on Guide to Post-16 Funding, said that while it was difficult to compare FE to HE, it was clear the unit rate for adults had declined significantly in FE over a number of years and was due to fall again by a minimum of 3 per cent across the board next year.
Mr Linford said the biggest difference between FE and HE learners was the amount of support the former receive. While full-time students in higher education can borrow a maximum of pound;6,928, a full-time adult student in FE is eligible for the means-tested Adult Learning Grants, which are limited to pound;1,500 a year.