New evidence of colleges being squeezed in a closing cash trap has prompted renewed calls for a review of further education funding.
As the FE chief inspector warns that some colleges face a slide into a "downward funding spiral" after missing growth targets, fears are being raised of the "invisible" sector losing out on funding to more voter-friendly areas of education.
Concerns raised in the forthcoming annual report by chief inspector Terry Melia - leaked to The TES - have led Opposition politicians and college heads alike to highlight continuing tensions arising from the pressure on colleges to expand while cutting costs.
Labour further and higher education spokesman Bryan Davies has painted a stark picture of some colleges "running to stand still" in the face of heavy competition, with the sector as a whole appearing an ominously "soft target" for Government spending cuts.
Mr Davies drew attention to a warning against "stopping the growth of the dynamic FE sector" contained in the leaked draft presentation from Education and Employment Secretary Gillian Shephard's office to the Chequers strategy Cabinet.
He said: "FE is an invisible sector where votes don't count and is a soft target which is why it is forced to accept 5 per cent efficiency savings each year.
"At a time when FE should be expanding to meet the stringent targets it is in fact being put in jeopardy and it is obvious now that the stresses are telling."
Liberal Democrat education spokesman Don Foster cited questions raised in the report over colleges' quality control mechanisms, franchising schemes and drop-out rates as further evidence of the strains on the sector under the present free-market funding system. He wants a more regional emphasis with greater attention to individual colleges' needs.
College principals echoed the concerns raised by Dr Melia. The Association For Colleges has already approached the Government for more funding. AFC chairman Mike Austin suggested that Mrs Shephard's warning against stopping FE growth might betray a recognition that cuts would lead to the Government missing its national training targets. At Lewisham College, concerned managers have devised an alternative funding structure for submission to Mrs Shephard, weighted in favour of colleges in low-income areas.