They face a pound;100 m loss despite extra funds , reports Martin Whittaker
Vocational courses for schoolchildren are leaving FE colleges an estimated pound;100 million a year out of pocket.
Most colleges report that the money they receive for the increased flexibility programme for 14 to 16-year-olds does not cover their costs.
In most cases, colleges are left picking up two thirds of the total bill, effectively raiding their post-16 budgets to subsidise vocational training on behalf of schools.
The findings, from a survey of colleges by the Learning and Skills Development Agency, could have implications for the Government's attempt to create seamless provision for 14 to 19-year-olds. The increased flexibility programme, which gives under-16 year-olds a taste of vocational education in colleges, has been hailed a success in some quarters because of the benefits to those pupils who take part.
An evaluation by the National Foundation for Educational Research last year found the scheme had boosted exam results, improved pupils' attitudes to education and persuaded more to stay on.
The cost of this success, it has been revealed, is further pressure on college finances which has already resulted in cuts to adult education and has made it hard for colleges to address lecturers' demand for pay parity with school teachers.
The Association of Colleges says schools could find the doors to the further education experience start to close if the scheme continues to make demands which are not being backed up with cash.
John Brennan, AoC chief executive, said: "I think you'll find that colleges are increasingly reluctant to carry on with these schemes if they have to subsidise them because their room for manoeuvre is increasingly being cut back.
"So I think the future of the 14 to 16 programmes is now going to get very difficult unless the Government comes up fairly quickly with some mechanisms for ensuring that colleges are properly funded for their share of the activity."
The research into the cost of the increased flexibility programme was based on a postal survey of colleges. The total cost of the scheme for the 72 colleges which returned complete data was estimated at pound;33 million, suggesting a pound;100 million cost across England.
Income from schools, local education authorities, the Learning and Skills Council and other sources covered a third of this bill. The LSDA says the current funding arrangements for increased flexibility appear to be unsustainable.
It also showed some colleges fear the presence of children is undermining their "adult ethos", and that schools are dumping difficult pupils on them.
Mick Fletcher, the LSDA's research manager and co-author of the report, said its findings are "disturbing". He said: "It is clear that offering young people the flexibility to take vocational subjects and experience a college education is proving highly beneficial to schools, colleges and young people.
"Given the finite resources, we need to look at cost-effective ways of funding the scheme that don't put colleges out of pocket."
City of Bristol college works with around 30 schools running vocational programmes for 800 pupils each year, with a further 100 excluded pupils on full-time courses. Vice-principal Judy Stradling says its income from schools and increased flexibility funding covers teaching and management but not the extra hidden costs.
She said: "It makes no contribution towards the running costs of the college."