The Association of Colleges (AoC) is calling for a radical shake-up of the post-16 sector that would make it considerably harder for schools to open sixth forms and could also lead to the closure of "uneconomic" small institutions such as free schools.
In a submission to chancellor George Osborne ahead of the Autumn Statement, the AoC said that a different approach to the organisation of 16-19 education was needed in the face of further cuts. This should include higher quality thresholds for new school sixth forms, an end to large capital grants for what it calls "boutique institutions" such as free schools and a clear process to close institutions that are not economically viable.
Julian Gravatt, deputy chief executive of the AoC, told TES that funding for post-16 provision was "a bit of a mess" and said that money should be directed where it was most needed.
"There's a genuine anger in colleges when they see Treasury money piled into new, small institutions," he said.
"I can see that the Department for Education wants to fund innovation but it sometimes looks like waste. We have had 10 years of opening new sixth forms in schools.There are now more than 1,000 with less than 100 pupils.
"On top of that, there have been lots of new free schools, studio schools and university technical colleges [UTCs]. There are genuine issues about their viability and the breadth and quality of what they are offering. There's always space for small institutions but we are about to hit a really cold climate for post-16 funding."
Mr Gravatt said several colleges that were economically unviable had been forced to merge, although new institutions offering 16-19 education had received capital funding and additional money for start-up and support in their first couple of years.
In 2014-15, the Education Funding Agency will be funding 12,643 young people aged 16-18, fewer than 1 per cent of the 16-18 student population, in 93 UTCs, free schools and studio schools.
Mr Gravatt said that a more considered approach to planning was needed, with an analysis of the whole sector. "We need to make sure that capital funds aren't going into just one type of institution," he said.
The Sixth Form Colleges' Association said it supported the AoC's position. David Igoe, its chief executive, said there was no ideological opposition to institutions like free schools or UTCs, but the economics of the situation were "strange".
"Investment in these favoured organisational types is both unfair and not achieving what the government hopes to achieve in terms of choice and driving up standards; it is taking resources away from mainstream education," he told TES.
"They can only survive in the short term thanks to this pump-priming money. It is difficult to see how they can survive when they have to rely on the same level of funding as everyone else."
He said the unequal distribution of funds meant that some sixth-form colleges were struggling to make ends meet.
The AoC's 20-page submission also restates its opposition to further cuts to FE budgets. As reported in TES earlier this month, the AoC is campaigning for a "once-in-a-generation" review of education funding to introduce "rational" financing for post-16 learners.
"There is no scope for further reductions in funding for the education of 16- to 18-year-olds, in addition to those made in recent years, without causing significant damage to the quality of education," the submission warns.
A spokeswoman for the Treasury said that the government would not comment on submissions ahead of the Autumn Statement, which is due to be delivered by the chancellor on 3 December.
However, skills minister Nick Boles has already warned colleges not to expect any more cash despite acknowledging their "tough" situation.