Adults needing help with literacy and numeracy are being turned away from colleges because the Government’s basic skills drive is running out of cash.

Colleges have called on ministers to loosen the funding rules so that they can help more adults who struggle to read a bus timetable or cope with household finances.

John Brennan, chief executive of the Association of Colleges, said increasing numbers of principals have told him they have been forced to axe the kind of basic skills courses which attract reluctant adult learners - including taster courses which do not lead to qualifications.

These include courses which combine literacy and numeracy with other vocational areas - such as using computers.

Other basic skills courses, while qualifying for cash, are nevertheless a drain on budgets, he said, because they do not contribute to level 2 (GCSE A to C-equivalent) targets which have a higher funding priority. As a result, they are vulnerable as colleges are forced by local learning and skills councils to prioritise.

The AoC argues even level 2 targets are at stake if colleges are unable to get enough adults literate and numerate enough to cope with everyday life.

The Government needs to grasp the relationship between basic skills and level 2 achievement if its strategy is to succeed, Mr Brennan says.

The AoC says any confusion about basic skills will not have been helped by Tony Blair, the Prime Minister, when he spoke at Goldman Sachs, the US investment bank, this week.

Mr Blair said: “Poor schooling in the past has left us with a legacy of many millions without adequate basic skills - seven million without the level 2 qualifications needed as the foundation for many jobs.”

In fact, the often-quoted seven million figure actually refers to people who are functionally illiterate or innumerate. The number without level 2 qualifications is far higher.

The AoC says the aim of getting more adults qualified in basic skills and to level 2 will be missed without a more relaxed funding regime and more cash.

At level 2, even vocational work-based courses, integral to the skills strategy, are being cut due to lack of funds.

Mr Brennan said: “Colleges are squeezed between trying to meet the demand for training and their obligations to balance the books.

“The AoC has been pointing out to Government for some time the disparity between its ambition to drive up skills levels and the resources being made available,” he said.

“The Chancellor is guaranteeing skills to level 2 for adults but even some of these courses are being cut. In addition, if the guarantee means the withdrawal of opportunities for other adults, and this appears to be the case, the Government’s skills strategy will have failed.”

Joanna Tate, principal of Bishop Auckland college, County Durham, has cut some basic skills courses, leaving adults with nowhere to go.

She said: “People with basic skills needs tend to be poor, if not very poor, and they don’t have a car to enable them to go elsewhere. For many, the local college is the only provider. There is a strangulation process brought on by the funding rules. We need more trust. The LSC is trying to do that but we are not there yet.”