The Treasury’s refusal to fund the 2.7 per cent teachers’ pay award, coupled with the toughest-ever public spending round, has led to massive cuts in discretionary grants and adult and community education, seriously reducing student choice and threatening the Government’s own targets for college expansion. Without grants for support or transport, large numbers of students targeted by the colleges may find it impossible to get on a course of their choice or even afford to continue their studies at all.

As the deadline for county councils to set their budgets passed this week, it emerged that further education and sixth-form colleges in just under half of the authorities would be hit by a triple blow of cuts in discretionary awards, in transport grants, and in adult or community education. A third of the counties reduced spending in at least two of these areas.

The imposition of such cuts at a time when Whitehall has called for a marked improvement in post-16 provision and recruitment rates, particularly among adult learners, alarmed the sector which has become increasingly competitive since leaving local authority control.

Earlier this year the management consultancy KPMG Peat Marwick claimed one in five FE colleges could close or merge in the next three years as a result of market forces. Survival will be particularly difficult for smaller colleges, with inadequate funding blamed for the increasing squeeze.

Just three months ago Gillian Shephard, the Education Secretary, extended from three to four years the deadline for colleges to increase their numbers by 28 per cent after it became apparent that they were failing to hit their targets. Success makes them eligible for much-needed enhanced funding.

Madeleine Craft, principal of Long Road college, Cambridge and secretary of the Association of Sixth Form Colleges, said: “Government cannot expect further education colleges to go on increasing provision, particularly among adult learners, without recognising there is a cost attached. This squeeze on education funding is a short-term policy which fails to take into account the consequences for the future. Students will not have the experiences, choices and opportunities they should have.”

John Bolton, principal of Blackburn college and an executive member of the Association for College Management, said: “The Further Education Funding Council is obviously concerned about widening access to post-16 education but the Government’s funding policies are militating against this.”

The Further Education Funding Council’s finance director, Roger McClure, said a safety net was built into the funding system. “Some colleges got this last year because they could show they fell short of their agreed growth target as a result of something which they could not reasonably have foreseen - because the local authority discretionary award policy was changed, When they provided this justification they were deemed to have met their targets.”

A survey of the 39 English counties this week by The TES revealed that discretionary awards will be the hardest hit of the non-statutory education services.

Eighteen of the 36 counties responding to the survey will cut a total Pounds 7.41 million with the heaviest burden falling in Cheshire (Pounds 2.35 million), Hampshire (Pounds 2 million) and Gloucestershire (Pounds 628, 000).

Nearly half said they would cut adult education. This will radically affect access courses vital for mature students hoping to enter higher education.

Nearly four out of ten counties were introducing or raising home to college transport charges in some cases by as much as two-thirds.

One authority the Isle of Wight is to cut Pounds 234,600 in discretionary awards despite setting a budget below its limit. In future awards will only be given for courses at the island’s FE college, with the exception of arts foundation courses.