Growing success in attracting unemployed young people into training would be jeopardised by rumoured swingeing cuts in funding for the programmes, Training and Enterprise Councils have warned.

Tuesday’s Budget could bring cuts of up to 20 per cent in cash for the Youth Training programme, some TEC chiefs understand.

Education and Employment Secretary Gillian Shephard is said to have been one of the three big winners in the fight for more cash - with health hitting the jackpot. She is said to have won over #163;300 million for her department - much more than anticipated - in the last Budget before the general election.

Grant-maintained schools may be winners and further and higher education could also benefit, but work-based training is unlikely to come off well. TEC leaders insist there is no scope for cutbacks now that figures show take-up of the scheme is on the rise. They have already called for increased investment to underpin the transfer from YT to its replacement, National Traineeships, due to be launched next September.

The new programme, proposed by Sir Ron Dearing in his review of 16-19 qualifications following calls for substantial reform of YT, will be more costly than its predecessor because of extra emphasis on training in key skills, TECs claim.

Training leaders are anxious to promote their increasing success in recruiting school leavers to YT and to the new Modern Apprenticeship - a scheme now entering its second full year offering bright youngsters a work-based alternative to A-levels and university.

Latest figures published by the TECs show 251, 000 YT participants in August this year - an increase of 7 per cent since April 1995.

The Modern Apprenticeship scheme, which attracted almost 27,000 recruits in 1995-96, is expected by TECs to topped 60,000 enrolments by next April.

Chris Humphries, policy director at the TEC National Council, declined to speculate on Budget allocations, but warned that any cuts would damage progress made on YT.

He said: “Given that Youth Training has been up by 5-7 per cent year-on-year and given that the number of young people enrolling last year is substantially up on the previous year it would be a very strange policy that would actually cut the pot of money.”

A budget cut would mean the youth trainees coming forward could not be provided for, while TECs would not be able to meet demand for Modern Apprenticeship places, he said. “I think it would be contrary to the Government’s policy of increasing parity of esteem between vocational and other routes.”

Mr Humphries denied TECs had sufficient reserves to bail themselves out if funding was cut. Figures showing surpluses at approaching #163;250 million in 1995-96 were a distortion, he claimed, since the sum covered all TECs’ assets including buildings. The level of disposable TEC resources nationally was only #163;30m, he claimed.

Birmingham TEC, which emerged in recent league tables as one of the most cost-effective on Youth Training, said any funding cut would cause problems. Chief executive David Cragg said cuts would mean either reducing provision, or paying providers less with a potential loss of quality.