Newham College of FE has high numbers of students from disadvantaged backgrounds. Martin Tolhurst, its principal, said: "We would welcome any recognition that the costs of providing education and training in disadvantaged areas are not currently being met in full.
"There are significant additional costs. We have to widen participation and social inclusion and the funding made in the past has not matched that.
"The costs are higher right across the board in every sphere of college activity - in marking, admissions, and in basic skills cover," he said. "Every single aspect is more expensive for students from disadvantaged backgrounds. In some cases students have not reached minimum age-related attainment and sometimes they do not have any prior attainment whatsoever."
Colin Hindmarch, vice-principal of City of Sunderland College, welcomed the recommendation of additional money for colleges in disadvantaged areas. Last year the college attracted students from disadvantaged areas to its IT courses by taking laptop computers to venues near their homes.
"We have found that to widen participation the college has had to design provision that is fundamentally different from that traditionally offered, and that can be quite expensive."
But he was concerned about the possibility of cuts to current levels of funding for some programmes, such as IT.
"The worst scenario would be a reduction in terms of equipment and teaching time available," he said. "If that reduction is significant then we as a college may have to see if we still want to do these courses. It could have a significant impact on these curriculum areas."
For colleges struggling in locations with high local property prices and associated costs, changes in the funding system to recognise this are much needed.
Ian Lennox, director of finance at Oaklands College, St Albans, Hertfordshire, said: "The current levels of uplift are inadequate. The extremely high cost of housing in this area is causing problems recruiting staff," he said. "Anything is better but whether it will go far enough is another matter."
"The 3 per cent extra we get now because of the local area costs is not enough. If you have a lecturer on pound;20,000 a year, another pound;600 before tax is laughable.
"Lots of staff have to travel some distance to work because they cannot afford to live in the area."
But one Midlands principal disagreed with changes to the area weighting system. "The LSC would be opening up a can of worms with this," he said. "Once you acknowledge that there are different circumstances for different colleges you are only a step away from acknowledging that every college has different circumstances.
"I welcome any additional funding that I can get for this college but I don't want to see millions of pounds being diverted into an administrative system."
Extra money for its specialisation is currently worth pound;232,000 a year to Plymouth College of Art and Design. Lynne Staley-Brookes, its principal, said: "What the Government and the LSC need to ask is do they want specialist colleges? You can't have modular funding if you are going to have specialist centres of vocational excellence.
Specialist colleges have already had to find 25 per cent higher efficiency savings than FE colleges, she said.
"A one-glove-fits-all approach will be detrimental to provision."