Almost a third of colleges in the UK have slashed back expansion plans to concentrate on stemming student drop-out and failure.

However, a substantial minority have gone the other way, offering courses free or at giveaway prices to fill classrooms while driving down costs per head, the autumn recruitment survey by The TES revealed this week.

Most colleges are taking a far more cautious approach to the student numbers game than in previous years. Many have heeded the advice of former Further Education Funding Council chief executive, Sir William Stubbs, to fight harder on the retention front and ease the recruitment wars.

Student stay-on rates is one of the performance indicators to be introduced in FE within the next few weeks. These will have a direct impact on the cash paid by the FEFC.

But the cautious approach to recruitment also reflects the dire financial state of many colleges where staff have been told there will be no pay rise unless recruitment targets are hit.

Colleges nationally are expected to hit the 3 per cent growth targets set by the FEFC for England this year. Wales and Scotland look set to reach 5 per cent.

Almost half of all colleges in England, Wales and Scotland expect no overall increase in numbers of 16 to 19-year-olds this year. Slightly more than this expect little or no change in the numbers of adults. Within this group, more than one in four say there will be little or no growth at all.

But the survey of more than one-in-eight (75) FE colleges in the UK - to which two-thirds responded - shows a wider disparity than ever between the minority going for massive growth and those with low and often zero growth targets.

Those recruiting most school-leavers are sixth-form colleges, including Eccles (15.5 per cent), Regent College, Leicester (15 per cent) Cardinal Newman College, Preston (11) and Solihull (10). Sixth-form colleges are making big in-roads into adult recruitment.

FE and tertiary colleges made the biggest gains here, Eccles SFC was second top with 33 per cent growth in part-time adult numbers. However, sixth-form college heads say adult percentages may mislead, as they start from a lower figure.

Top recruiters of part-time adults in the survey sample include Derby Wilmorton Tertiary (61 per cent), Barnsley FHE (20) and Harrogate FE (15 per cent).

Top recruiters of full-time adults in the sample were Wilmorton (31 per cent), Regent (25 per cent), Royal Forest of Dean (12) and Enfield and Palmers College, Essex, both with 10 per cent.

Gimmicks and freebies such as trips to Disneyworld appear to have been dropped. Virtually all colleges have sharpened their promotional tactics, spending more than ever on marketing and early recruitment.

Six out of 10 colleges have introduced measures to cut costs to the customer. Gateshead College offers three courses for the price of two. Enfield has scrapped fees for full-time adults and benefits receivers. Many have abolished fees altogether.

Matthew Boulton College has a support scheme for adults in hardship who study more than 15 hours a week. It offers free stationery packs after three weeks to students who meet performance criteria.

Cash available for incentives, however, is disappearing fast as Government efficiency drives leave less flexibility. The strain is felt particularly as local government subsidies for free travel are cut.

Mick Brown, principal of South East Derbyshire College, said: “We inherited 15 bus routes for the dispersed population of the Erewash Valley. We spend Pounds 200,000 a year and this will go up as the local authority subsidy disappears. ”

Colleges are hitting their targets despite stiffer than ever competition from schools. But principals see the limits to growth looming. Giles Pepler, principal of Regent College, said: “Retention is now the key issue, and with funding heavily squeezed, quality is at serious risk. It’s no longer a matter of squeezing quarts into pint pots but gallons into liqueur glasses.”

There is little hope now of escaping the squeeze by expanding higher education as universities are suffering financially. Moreover, access courses have been hit as universities are dropping their support in favour of their own “year zero” courses for adults without the required entry qualifications.

Only five colleges in the sample said there would be any significant growth in higher national diploma and degree courses, 22 reported no change, seven reported a sharp decline. The rest offered no HE.

Recruitment to access courses is patchy. While some areas have seen considerable growth, there is a sharp decline.