Most government departments can assume they will receive no more than inflation increases, while "some departments may receive less", he warned.
This is very bad news for colleges who thought Charles Clarke, the Education Secretary, had announced a record rise in spending last year, with more to come. He did, apparently, but as the Association of Colleges analysis shows (page 3) it was swallowed up by non-educational costs such as national insurance and pensions.
With the continuing crisis facing schools - identified in last week's TESSecondary Heads Association staffing survey - there must be some pretty astute politicking or arm-twisting for colleges to be given preferential treatment in next summer's spending review. This will test the mettle of the new lifelong learning minister Alan Johnson.
But it also calls for government departments to co-ordinate efforts. Labour promised it would back in 1997. However, this week a highly authoritative report from the Learning and Skills Development Agency suggests that the government departments for education and employment are on anything but convergent paths.
The "work first" policies of the Department of Work and Pensions, to get the unemployed rapidly back into jobs, conflict with the Department for Education and Skills priority to improve skills at level 2 (GCSE-equivalent).
Ministers must stop shaping welfare benefits policies on the assumption that the unemployed who seek financial help to study are workshy.
The LSDA report shows clearly that those who gain the skills stay in work longer, to the benefit of the exchequer. A "work not welfare" policy of adult learning grants is long overdue.