But will state cash be wasted on courses businesses would have bought anyway?
College fees for adults will jump 50 per cent over the next two years under new funding arrangements to be unveiled today by Bill Rammell, minister for further and higher education.
He will also give colleges which take 16 to 19-year-olds the same minimum funding guarantees announced for schools in the summer. This is likely to bring an extra 4 per cent and is an attempt to halt the growing funding gap between schools and colleges.
The fees hike is planned to free more cash for the rollout of the National Employer Training Programme, which will provide companies with free level 2 (GCSE-equivalent) training for their staff.
Mr Rammell said the Government was also committed to funding a further 46,000 post-16 students and trainees in schools, colleges and apprenticeships - with more finishing their courses and gaining qualifications.
The measures, he said, were part of new funding arrangements reached after discussion with the Association of Colleges. He said: "I want to get the information out to the colleges much earlier than we have in the past and give them time to make this strategy work."
The package is good news for colleges with trainees on employment courses and 16-19 students. But it presents a tough challenge for those with many adults on "other" courses outside the Government's skills priorities.
Ministers set a target for colleges to increase fee income from 25 to 27.5 per cent this year. This increases to 32.5 next year and 37.5 in 2007-08.
John Brennan, chief executive of the AoC, has challenged the idea that colleges can increase fee income to 27.5 per cent.
Concern over the fees rise is also expressed in the report of an independent inquiry into adult learning in colleges published today. The report, for the National Institute of Adult Continuing Education, follows a six-month study of adult education. But Mr Rammell said evidence from MORI polls and consultations revealed a willingness of people to pay.
While it backs the Government's skills initiative, the inquiry points to adverse side effects. In particular, it warns that too rapid a rise in fees will lead to the closure of essential courses that fall outside government priorities.
The report also warns that companies are using the National Employer Training Programme to fund courses they would have paid for themselves, diverting public money from other adult education. It says: "The evidence that between 60 and 90 per cent of Employer Training Pilot provision has funded employers for work they would otherwise have had to pay for themselves suggests that current strategies will not secure the balance (of funds) that is needed."
Chris Hughes, chairman of the inquiry, said the national roll-out of the scheme could still produce great benefits if employers were forced to invest more in training.
He said: "Instead of complaining about a dead weight effect ministers should be saying if we support level 2, they should spend the cash saved on level 3 (A-level-equivalent). They must not simply bank the cash."
Mr Rammell stood by the decision to introduce NETP as a main part of the skills initiative and said he expected more investment from employers. "We will be monitoring what actually happens. If down the road it does not work, we will have to look at it again."
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