The money, being distributed to 395 colleges, can be spent on upgrading computer facilities, improving training equipment, redecorating classrooms and sprucing up old buildings.

Ken Pascoe, the Learning and Skills Council’s operations director, said:

“This is part of the Government’s drive to accelerate the pace of reform in post-16 learning to raise quality, better meet employers’ needs and improve choice for students.”

The money is aimed at 16 to 19-year-old students. Colleges receive pound;10,000 plus pound;33.83 per full-time student in the age group, working out at around pound;50,000 per college.

The money is part of a pound;42m package announced by the Department for Education and Skills in June as part of the strategy outlined in Success for All, aimed at accelerating the pace of reform in post-16 learning.

Mr Pascoe added: “In a new move to lighten the burden of red tape, we will release the money to colleges and other learning providers, asking their external auditors to verify that the funds have been used to improve the facilities and equipment for the benefit of students and other learners in the 16 to 19 age group.

“We have pointed out that the funds are available right away with the minimum of bureaucracy and that they must be used by July 31, 2003 so that institutions can make immediate improvements.”

The Association of Colleges, which has been campaigning for colleges to be given more flexibility over their expenditure, has cited the latest allocations as a further example of relatively small pots of money being unnecessarily ring-fenced by the LSC.

Despite the LSC’s overtures about reducing red tape, the AoC says colleges, some of which will receive as little as pound;25,000, will have to account to the quango for how it is spent, adding to administration.

AoC further education development director John Brennan said: “The money is to be welcomed and the fact it has been distributed on a formula basis rather than having colleges bid for it is to be welcomed.

“But with such small amounts of money the auditing process is disproportionate to the amount of money which is coming in.

“It would be so much nicer with these tiddly bits of funding if they were just plonked into core funding and colleges were left to get on with it. Having said that, I think all colleges will have improvement plans in the areas covered by this and they will have no trouble accounting for how they spend the money.”