Funding rates increase by 3 per cent per training place as an incentive to double the intake to nearly one million
Cash incentives are being used to create almost one million places a year on the Train to Gain programme from 2010.
The budget is set to increase from pound;350 million to pound;1 billion in 2010-11, taking the number of people on the programme from 420,000 to 950,000 a year.
Colleges are looking forward to an influx of students as they try to win contracts to provide places under the scheme, which provides employers with Government-subsidised training for their staff.
Colleges are to be given a 3 per cent increase in funding per training place for the next three years in an attempt to encourage them to do more Train to Gain work.
While this means individual places will be more generously funded, colleges fear they will still have to subsidise the programme from existing budgets to make it work. However, the changes have been broadly welcomed.
Martin Doel, the new chief executive of the Association of Colleges (AoC), said: "We welcome these changes, which will help colleges deliver the Government's ambitious growth plans. The extension of the programme and the introduction of longer-term contracts will be particularly helpful.
"While the 3 per cent increase in funding rates is a positive step, we are still not fully convinced that the economics of the programme have been properly thought through.
"The AoC is working with the Learning and Skills Council on this issue and we will continue to press for further changes to funding rates to ensure that colleges aren't forced to subsidise the programme from their other activities.
"We will also continue to press for more flexibility to use Train to Gain for jobseekers."
A further boost for vocational skills came this week with the announcement of an extra pound;133 million over three years for training in the construction industry - to include cash for 6,500 new apprenticeship places.
The Train to Gain scheme will increasingly focus on level 3 (A-level equivalent) and level 4 (first year degree equivalent) training, in line with the recommendations of the Leitch Review of Skills in 2006.
Commissioned by Gordon Brown - then Chancellor - Lord Sandy Leitch identified the need for skills at level 3 and higher to optimise the UK's economic performance and place it in the top quarter of the 30 Organisation for Economic Co-operation and Development countries for workforce skills.
There will also be an increased emphasis on developing the management skills of those in companies with up to 250 employees. This training will not have to lead to qualifications to get funding.
As well as structured courses, business people will be able to develop their management skills through mentoring, with funding from Train to Gain.
The expansion of Train to Gain comes as other areas of college activity continue to grow.
While teenage participation levels are still increasing year-on-year, with 73 per cent of 17-year-olds now in education or training, colleges are doing better than planned at attracting adults to basic skills classes.
The number of adults who have gained their first basic qualification in numeracy or literacy has passed the 2.25 million mark - the target which ministers had set for 2010. The Department for Innovation, Universities and Skills says 2.28 million people have now reached this level.
John Denham, the Innovation, Universities and Skills Secretary, said: "These qualifications give people so much more than just a certificate. Gaining basic skills such as reading and writing is a vital step towards getting a better job and life."
A report published last month by the National Research and Development Centre for Adult Literacy and Numeracy found that children whose parents have good literacy levels perform 65 per cent better in cognitive tests.
Leading article, page 4.