The new emphasis on progression and achieving pre-set goals was felt by many in the more than 200 colleges surveyed by the Joseph Rowntree Foundation to be against the interests of people with learning difficulties. It confirms widespread fears that splitting courses into "vocational" and "non-vocational", achieved under the 1993 Further and Higher Education Act, would hit this group hardest.
Only vocational courses which are accredited can receive Further Education Funding Council cash. But these must measure up to rigorous tests and prepare students for higher-level courses. Such courses are often inappropriate for students with learning difficulties and disabilities, the research shows.
The study shows that the FHE Act has brought mixed fortunes for adults with learning difficulties. Colleges and many local education authorities say it has put funding on a more secure footing. The majority say they have maintained or improved spending.
Opportunities have increased for students with moderate learning difficulties in six out of 10 colleges. One in eight has achieved effective policies integrating special needs students into mainstream courses. Many colleges say there is now "more clarity of purpose" and the status of the work has been raised.
But, the research shows an alarming downside. Opportunities for people with more profound and complex difficulties have been cut. Help with transport and care needs has been reduced and less emphasis is now put on courses such as music, the arts and drama - those with a proven track record of success for the most disabled.
Instead, the focus is on literacy, numeracy, vocational courses and skills for independence - all those eligible for FEFC funding. "There was a concern that the funding mechanism rather than the needs of learners have started to drive the curriculum," say the researchers who carried out the survey.
In many areas, strategic planning was lost through fragmentation in local authority and further education services under the Act. It has also created a new mountain of bureaucracy with new FEFC demands for administration and paperwork.
One college manager said he did not have time to organise other things now as his day was so taken up with administration and dealing with the part of the FHE Act on claims for Government funding.
The researchers noted that: "Rather than responding to the needs of disabled learners, there is a fear that a few places are developing provision purely because it brings money into their colleges."
In some cases, this has led to more segregation of students with special needs. Staff at one college with a tradition for integration said they were under pressure to set up a segregated course because "the colleges can't afford not to".
Many college principals said there were ways of overcoming the barriers created by the Act, but only with a policy of further education and local authority co-operation. Even so, the problems of overwhelming bureaucracy remained.
Chris Hughes, principal of Gateshead College, said that only by bringing in the social services and having accreditation on a regional basis through something like the Open College Network could real progress be made.
A scheme called the Tyneside Open College Federation has been launched with the backing of social services. More than 150 students are on the scheme.
Each adult who has learning difficulties is paired with another without special needs. "All students have more curriculum choice and develop their confidence to learn far quicker than under the traditional approach," Mr Hughes said.