Training providers say they are on the verge of turning teenagers away from courses that are designed to help the most vulnerable into work because of another 16-19 funding shortfall.
Entry to Employment (e2e) courses, which are seen as the last hope in preventing teenagers dropping out of education, are the latest part of the system to be hit by an underestimate of student numbers.
While colleges have taken on thousands of extra unfunded full-time students this year, the training providers responsible for most of the 16- 18 Entry to Employment courses include charities that say they cannot afford deficits.
The funding shortfalls that were expected to take effect in colleges and schools in September are already taking their toll among these training providers, some of whom say they may have to turn away students as early as next week.
A budget of pound;185 million this year was intended to fund 70,000 teenagers on Entry to Employment programmes, which cover basic skills and vocational development for those who are not yet ready for an apprenticeship or work. Several providers have reported exceeding their budget for the year, with four months still to go, and some say they have been told to stop recruiting by their local learning and skills councils. Summer is normally a busy recruiting time for Entry to Employment, providers say, since it helps for students to start the programme as soon as they leave school.
Debra Woodruff, deputy chief executive of Manchester Solutions, which trains about 450 teenagers at a time on the courses, said the shortfall had been fuelled by an influx of students who had not been able to find apprenticeship places.
She said: "It was pretty clear not long after last summer that we were heading into a recession and so demand would be greater. If there are fewer apprenticeships, more go into Entry to Employment.
"You don't want to allow this group of young people to do nothing. You need to get them doing something positive as quickly as possible."
Work-based learning providers say apprenticeships are about 17 per cent under their pound;637m budget this year because of the difficulty in finding employers who will take on trainees in the recession. That means large sums could be available to cover greater demand for education and training elsewhere. But Ms Woodruff said that encouraging signs from Learning and Skills Council officials in February that they might pursue this solution had given way to a more uncertain picture in recent weeks.
Unspent apprenticeship finance is also being eyed by colleges to cover the demand for full-time places by 16 to 19-year-olds. As FE Focus reported last month, colleges face a Pounds 65m shortfall next year, or 2 per cent of the total budget, because of the surge in enrolments.
Jim Knight, the schools minister, said officials were working across government to find money to provide for the extra students.
"Colleges and schools have done an outstanding job of recruiting and encouraging young people to stay in education or training until they are 18 and are to be congratulated for this," he said.
"We are now seeing an even greater surge in demand for places than we have budgeted for."
A spokeswoman for the Learning and Skills Council said the funding body was looking for ways to support additional Entry to Employment students. "We are exploring with the Department for Children, Schools and Families how best to find extra financial support for new learners coming forward," she said.