Almost two-thirds of college principals are predicting cash cuts and significant staff redundancies over the next three years, according to an Association of Teachers and Lecturers' survey.
Four in five expect financial troubles to worsen. And almost three quarters of the 104 principals who responded to the survey said the Further Education Funding Council had created an "unnecessary" or "unreasonable" burden on the colleges.
About one-third - 36 per cent -said the FEFC was "damaging the effectiveness of the sector". The majority blamed the Government for making over-tough demands for savings.
The ATL survey coincides with a Labour party report which shows that 45 FE and sixth-form colleges were "technically insolvent" in July. This is a slight improvement on FEFC figures leaked to The TES (September 29 1995) which showed that 58 were technically insolvent in the spring.
But the Labour party warned of worse to come if further unrealistic savings were demanded. Its report, Colleges in Crisis, was published to put pressure on the Government in the run-up to Chancellor Kenneth Clarke's autumn budget next week.
Bryan Davies, Labour's further and higher education spokesman, said that cash crises were looming even in the most successful colleges. "Further education cannot be seen as a soft option for cuts if high standards and improved access are to be upheld," he added.
The report shows colleges spent 11 per cent less for each full-time equivalent student between 1990 and 1993.