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Alan Johnson, the further and higher education minister, could bring little more than warm words to the Association of Colleges' annual conference in Birmingham this week. With immediate future funding plans wrapped up and the Government's next spending review in the melting pot, there were no crocks of gold yet cool enough to offer. And, if Treasury forecasts are right, there will be none.

As expected, Mr Johnson's keynote speech to the biggest gathering on the education calendar contained a recitation of already oft-repeated statistics of success. He reiterated the fact that there had been a 10 per cent increase in exam success rates last year. He echoed inspectors' praise as the number of lessons judged at least satisfactory topped 90 per cent.

And he reminded colleges that the learning and skills budget would reach pound;10.2 billion in two years.

But the colleges wanted to know where were the rewards? Education Secretary Charles Clarke stole the thunder at last year's conference by announcing "record-breaking" new money. But as the AoC's analysis shows, so much of the cash was tied up that many colleges were worse off - a fact that Mr Johnson refused to accept. Moreover, it is now clear that the skills training priorites for 2005 will not be met without extra cash.

While college leaders may not yet be speaking of betrayal, they are close.

Everyone at the conference knew Mr Johnson's real priority is higher education top-up fees. He is a Blairite bruiser from the centre-left, drafted in to do the deed. His predecessor Margaret Hodge could not be trusted with the loose cannons.

If cash is to be limited, other sources must be found. Ministers have called for closer partnerships between colleges and employers. But where is the pressure on industry to comply? The latest AoC survey shows a number of employers are saying "oblige us to spend more money on training".

As John Brennan said this week: "The government spends millions on the high-profile Gremlins campaign. Considerably more is needed to promote further education and skills training." Only one in six employers spends serious money on training. More would be pressured to do so if schemes such as A License to Practice was demanded for all trades. There are numerous ways to improve training links without a return to levy or other unworkable schemes. Colleges and employers are looking for more inventive solutions from ministers.

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