Adult education providers in England's most deprived areas say the cuts to college provision have harmed efforts to help their communities improve.
An Ofsted review of community education projects in the poorest parts of the country found that a third believed that cuts to adult learning in FE colleges were a significant barrier to people continuing their studies.
The findings support critics of the cuts - which resulted in 1.5 million places disappearing in adult education - in their claim that many people in the greatest need of improving skills wanted a gentle reintroduction to learning rather than formal qualifications.
Inspectors looking at neighbourhood learning in deprived communities visited 21 providers, which are mostly local authorities, and 30 of their community group subcontractors.
The project was launched in 2002 to build a network of voluntary and community organisations that would provide education opportunities for the poorest areas. It has a budget from the Learning and Skills Council of pound;20 million, with an extra pound;10 million for capital projects. A change in funding priorities in 2007 meant the provision is now targeted more towards acquiring skills for employment.
The inspectors found that, with most of the providers surveyed, students were gaining qualifications, moving on to other courses, improving their communication skills and becoming involved in community projects.
Providers were usually good at engaging specific groups such as disabled people, single parents, young offenders, and ethnic minority groups, inspectors said.
But although three-quarters of providers had success in the short term, only one in 10 became permanently established. Too few providers were concerned about sustainability at the bidding stage, inspectors said, although in some cases, the projects had gone on to become eligible for mainstream LSC funding.
Christine Gilbert, Ofsted's chief inspector, said: "Neighbourhood learning in deprived communities funded projects can be instrumental in engaging hard to reach learners. It's encouraging to see that most providers are using the funding well, and establishing strong partnerships with local organisations to contribute to community regeneration and better prepare residents with skills for employment."