Mr Canavan, who secured a rare chance for the House of Commons to debate Scottish FE last week, said 28 out of the 43 colleges had suffered real cuts in their Scottish Office grant this year. Twelve colleges had the maximum 5 per cent reduction, which rose to 8 per cent after inflation.

The Scottish Office envisages a reduction in FE funding from Pounds 241 million in 1994-95 to Pounds 211m by 1998-99 - a cut of 12.5 per cent. Mr Canavan pointed out that full-time student numbers had increased by 23 per cent since colleges became self-governing.

The MP said jobs were increasingly likely to be threatened as colleges ran out of other ways of making cuts. He said Falkirk College in his constituency had no more volunteers for early retirement and the Scottish Office pension scheme is limited to employees aged over 50. Falkirk has shed 100 teaching and support staff since incorporation, he added.

Mr Canavan also criticised the “volatile” way the Scottish Office funding formula operated, particularly the failure to take account of the diversity of colleges and the discrimination against large colleges who run a greater proportion of higher education courses.

He called for a contractual funding relationship between colleges and local authorities to retain the benefits of incorporation and allow the local character of each college to be reflected. He also believed the funding of HE courses in colleges should be taken from the Scottish Office and given to the Scottish Higher Education Funding Council.

Mr Canavan warned that if the pressures on colleges were not eased Government education and training targets would not be reached - 70 per cent of young people are supposed to be qualified to at least Scottish vocational qualification level 3 (or the Higher grade equivalent) by the year 2000. Only 51 per cent had reached that standard last year, a smaller proportion than in 1993.

In his reply Raymond Robertson, the Education Minister, stressed his personal commitment to FE:he said that he had visited nine colleges in the past year. He refuted Mr Canavan’s charges on funding and said the grant mechanism was intended to stimulate student activity in FE, which grew by 6 per cent in 1994-95.

The Minister accepted that the efficiency targets of 4 per cent each year were “challenging” but he added the colleges were achieving that and he saw no reason why that should not continue.

Recurrent funding had increased by 14 per cent since incorporation in 1993, but he said: “I make no apologies for the new funding formula requiring high-cost colleges to find efficiencies to bring them closer to the average. The wide variation in the cost efficiencies of colleges could not continue. ” A Pounds 4m restructuring fund was available last year to help colleges retrain or shed staff.

Mr Robertson stressed once again the Government’s commitment to the Private Finance Initiative, despite the problems which have hit the effort to build a new FE centre in Stirling (TESS last week). He confirmed that the intention was for privately-funded developments to replace Government grants for capital building projects.