Figures from its new survey, launched on Monday to coincide with Adult Learners' Week, show courses facing cuts in more than half the local authorities in England and Wales, while enrolments are down in one-third.
Serious concern has also been expressed by shadow education secretary David Blunkett, who this week warned that the "decimation" of adult education threatens to deepen the plight of the poorest in society. Speaking at the NIACE conference for Adult Learners' Week, he said that employers should contribute more to education and training.
The week was officially launched by higher education minister Tim Boswell, who insisted that the Government values further education and training.
"Let's be frank," he said. "The UK is facing a skills shortage. That is why all forms of education for adults now feature prominently in our priorities. "
Adult education services around the country have been expressing doubt, however. Pam Gibson, head of the service in Kent, for example, is facing a cut of Pounds 700,000 - around 20 per cent of the budget.
"At a time when the value of lifelong learning is being recognised by everyone, it seems that the finance doesn't match the rhetoric," she said.
Norfolk's adult education budget has been reduced by 25 per cent in the past three years. Sue Carer, head of the service, said: "We're under pressure to generate income, not to run a service." But raising fees was counter-productive, she said. Many students dropped out last year when fees rose steeply. "Politicians say if people value classes they will afford them; but it doesn't work like that."
Cambridgeshire and Somerset are restructuring their services - which means job losses. Somerset has had one-third of its community education budget cut. Cambridgeshire has cut Pounds 2 million from its community education budget and is working towards an overall Pounds 4 million reduction.
The Government's financial curbs have forced Doncaster to completely suspend its service this year. The NIACE survey showed that nearly a third of shire counties had an expenditure reduction of between 6 and 10 per cent, as did nearly a quarter of the boroughs.
Alan Tuckett, the director, said: "There is a tremendous amount to celebrate in the expansion of adults participating in further and higher education. The real worry is that the funding of local government leaves community-based adult learning in crisis. More then ever, whether you can take the first step back to learning depends on where you live.
"The danger is that we don't recognise what our grandparents understood; that learning benefits the whole person not just their work. Employers like Ford understand that, we have to convince the Treasury."
Mr Blunkett, himself a product of night school, told the conference that adult education as he knew it "has been decimated".
"To the highly-skilled and highly-paid, the world of tomorrow is brimming with opportunity. But to those who bump along in and out of low-skilled, low-paid, part-time work, it represents an altogether different story.
"For these people, the information revolution promises not to enhance but to erode their prospects. In a world of information and communication technology, the danger of a deepening economic and social divide is greater than ever, " he said.
He envisaged three-way funding between employers, the Government and individuals. The Government had an obligation to produce a society at the cutting edge of technology. Employers faced an economic imperative to contribute, while employees had a moral obligation to put something back into the education system.