A Pounds 30 million fund intended to help colleges build capacity for Train to Gain could be used to help meet the sudden demand for extra places on the employer-based programme.

The money was part of a package of measures to try to prevent a third consecutive underspend of the Train to Gain budget. But before any of it had been allocated, demand for places surged, prompting the Learning and Skills Council to ask colleges and training providers to stop recruiting if they had met their Train to Gain targets.

Julian Gravatt, assistant chief executive of the Association of Colleges, said reallocating the money risked being unfair on institutions who had applied for the funding in good faith.

“Three and a half months on, there’s no word as to whether any money will be coming. Clearly the LSC has pressures on its budget, but so do colleges,” he said.

A spokeswoman for the funding body said it was working with the Department for Innovation, Universities and Skills to decide how best to use the money in the light of increased demand for Train to Gain.

“The capacity-building funding was earmarked as one of the measures within the stimulus package to build the infrastructure of providers,” she said. “The developments in Train to Gain have already increased the demands for the service, and providers have been extremely successful in responding to employer demand. This is a credit to the responsiveness of the FE system and is another success story for colleges and providers known for their excellent track record.”