Tough new minimum standards for FE institutions have been "plucked out of thin air" and will force them to scrap priority courses, colleges have warned.
The Skills Funding Agency (SFA) and the Young People's Learning Agency are to increase the minimum levels of performance (MLPs) that colleges need to achieve to receive Government funding.
The baseline success rates for FE qualifications are being increased by 3 per cent for 201112 after remaining unchanged for the past two years. Weaker colleges could struggle to meet next year's new targets at short notice.
Colleges which fail to meet the standards could face an Ofsted inspection, be issued with a notice to improve and, if no subsequent improvement is recorded, lose their funding for that type of qualification.
The Association of Colleges (AoC) has claimed the figures were drawn up following limited consultation with the sector, and warned that colleges could decide to scrap the Government's key vocational qualifications, such as apprenticeships, if they believe they may be at risk of losing out on vital funding.
MLPs for A-levels will not be increased, prompting the AoC to call for a level playing field for all 16-19 provision.
Joy Mercer, the AoC's director of education policy, said: "One of the knock-on effects is that some colleges will have problems meeting the benchmarks.
"We would like these minimum levels to be more closely aligned with how the sector is performing. At the moment, they have been plucked out of thin air.
"This is about the Government raising the bar. We think the minimum levels of performance should be based on national benchmarks, rather than Government aspirations.
"If you are a struggling or newly merged college and are working towards one level, you are now finding the bar has been raised. It could be discouraging the very areas that need to be grown.
"These minimum levels don't impact on school sixth-forms, so they are rather unfair floor targets for colleges."
Ms Mercer said there had been "very little consultation" on the new thresholds, and called for a single measure for evaluating performance.
"All these different methodologies need to be pulled together - MLPs, the Framework for Excellence and Ofsted," she said.
"There is very much less funding coming into the sector and this would be an obvious way of saving money."
Lorna Fitzjohn, Ofsted's divisional manager for learning and skills, said the new levels were still below the national averages, but were part of a "drive to improve" performance.
"As we conduct risk assessments, we may see some more (colleges) appear as causing concern," she said. "That will flag up in the risk assessment process, and we will look in a bit more detail at that college and see whether an inspection is necessary."
An SFA spokeswoman said the new thresholds - agreed with the Department for Business, Innovation and Skills and the Department for Education - represent "the absolute minimum success rate performance, and providers are expected to exceed them".