Aromatherapy classes gave Alan Brown more control over the debilitating effects of his schizophrenia than any drug therapy had done.

Pat Hailey, school dropout and single mother of three, was turned on to education through basic needlecraft and macrame classes run by her college in the local church hall.

Alan now wants to start his own aromatherapy business and Pat is keen to do A-levels in the hope of going to university. Their chances are slim. He needs extra aromatherapy classes, which the state will not fund. Pat, having completed a level 2 (GCSE-equivalent) childcare diploma, will get no further support unless she does something vocational like an access course for a nursing degree.

There are thousands of Alans and Pats in the 22 colleges shortlisted for the Association of CollegesTES widening participation beacon award this year. Yet they are lucky compared with many. Evidence from the award suggests a sharp fall in many basic opportunities following the Government’s funding changes.

Colleges are hunting for cash elsewhere. Hull College, through a local learning partnership, is seeking National Lottery support. Others, like Llanelli, have their eye on European Union grants. Blackburn is fortunate in having extra cash as a centre for vocational excellence in childcare, backed by a very supportive local authority. But the Cove cash is about to end.

Sarah Horne, the Cove manager, said: “The problem is that many colleges don’t have the cash to target those identified as most in need. The work needed to reach these people and get them ready for progression to skills training is huge and costly.”

Kirstie Knowles, a childcare student at Blackburn College, said: “I left school at 15 when I had my first baby. I never listened to the teacher and I would never have dreamed of going to college.”

Overcoming her resistance was one thing. There were also big costs like her own childcare not met by “targeted” cash. “Without it, I could not stay on the course.”

Gary Warke, deputy principal of Hull, said: “It’s not just a question of the money. Matching the learning people need with the skills the country needs is very difficult. Government performance targets are not sensitive to our needs.” The Learning and Skills Council recognises the dilemma colleges face, says Chris Banks, its chairman. So radical reform of the council’s operations is planned to give colleges more control. “We need to articulate ourselves in better ways than just targets,” he said.

The white paper on local government last week proposed slashing town hall performance targets from 1,200 to 200. Mr Banks wants similar changes in FE. He added: “Before anything else we will start by reinventing the council, strengthening our links with stakeholders.”

The nine regions and 148 local learning partnerships will gain powers from head office and the 47 local branches.

While this will not change government funding policy which, he argues, is right to be skewed in favour of skills for work, it will give colleges greater control over spending and the ability to put money where they identify need.

The LSC will narrow its role to that of a market-maker and will intervene only where it is not effective. “No market is perfect, I accept, so some people will lose out,” he said.

The role of the 47 local branches will be to give guidance to partnerships and engage with stakeholders - such as colleges, training providers, local authorities, local employers and voluntary organisations - and governance would be done by the regions.

“This is not about abolition of the local councils, but the LSC has to respond to changes in the political landscape. When it was created six years ago, there were no regional skills partnerships.”

Since then, Ken Livingstone, London’s Mayor, has taken control of adult skills in the capital, and other cities and regions have an eye on the same. Local-authority reforms will also bring changes in control over a range of policies.

Mr Banks said: “Regardless of the increasing emphasis on regional control in all parts of government, the focus must be on local partnerships, whether its 14 to 19 or adult education. Local agreements are the best expressions of what people need.”

The Government is likely to put even greater stress on employment-driven policies after the Leitch review of Britain’s skills shortages is published this autumn. There will be even more stress on policies such as Train to Gain, adult basic skills and 14 to 19 education and the new national diploma. But after the LSC reform of regions and local partnerships, said Mr Banks, “fewer people will miss out on opportunities”.