FE minister John Hayes promised to lobby for equal funding for teenagers in schools and colleges as he announced a single funding body for FE.
The Skills Funding Agency will provide all the money to colleges for 16-19 education as well as adult skills, delivering on the Conservatives' pre- election pledge to create one funding agency in FE.
Colleges said they had been assured that a common funding rate would continue to be set by the Young People's Learning Agency, or a future Education Funding Agency, to ensure that funding in colleges kept pace with schools.
Mr Hayes said: "In future you will deal with one agency, the Skills Funding Agency. We are not only simplifying the funding system, making it more straightforward. We are simplifying the organisation."
He told the Association of Colleges conference on Wednesday (17 November) that he was due to meet education secretary Michael Gove to discuss eliminating the long-standing funding gap between schools and colleges - expected to involve reducing schools' funding.
Peter Lauener, YPLA chief executive, said the funding gap "needs to be justified" if it is to continue.
Richard Atkins, principal of Exeter College, said that historically the funding gap tended to close when cash for education was in short supply. "Last time we had a downturn, we had convergence," he said.
Julian Gravatt, assistant chief executive of the AoC, said: "We do have a Conservative government that believes in markets, and in a market you don't pay more than you have to." The increasing emphasis on competition would make it hard to justify the extra cost of school sixth-forms, he said.
Colleges hope the reduced bureaucracy in dealing with just one agency will allow them to make savings.
The skills investment strategy, announced at the conference, revealed that only pound;100 million of Train to Gain's billion-pound budget would remain for a work-based training scheme for small businesses.
A cut to the entitlements of benefit claimants for free training was also announced, restricting it to jobseekers. The AoC calculated it would affect 48,000 people now in education, ranging from asylum seekers to the dependants of people on jobseeker's allowance.
Gordon Marsden, shadow FE and skills minister, said: "It's a massive blow to many people getting back into the job market. They've taken a very narrow view about how to encourage people to reskill: unless you're actively on jobseeker's allowance or employment support allowance, you're not going to be supported."