The revelation will dismay the further education sector which felt that it finally had a government willing to invest in post-16 education. Many colleges are already struggling to make ends meet. David Davis MP, chairman of the influential parliamentary public accounts committee, last month warned that the National Audit Office may be called in to scrutinise colleges because so many are in financial strife.
Although overall FE funding will increase in real terms this year, it will not keep pace with expected student numbers. Last year, the Government gave colleges an average of pound;3,280 for each full-time equivalent student. To keep pace with inflation this would have to increase to pound;3,360 in 2001-2. Instead, it is set to fall to pound;3,220.
It is the largest cut since Labour came to office. Between 1998 and 2000 funding per student increased by almost 2 per cent in real terms. But it fell back to 1998 levels this year.
The reduction for 2001-2 represents a cut of almost 4 per cent per student. inisters have promised to restrict the efficiency gains colleges are expected to make to an average of 1 per cent per year, but say that applies to the period 1998-2003, not to individual years.
"This is totally contrary to everything that ministers have said about funding to the FE sector," said John Brennan, director of FE development at the Association of Colleges.
"It will cause a tremendous reaction. If you talk to principals they will tell you that many of them are facing financial difficulties. If these figures are true we have a serious issue to take to the Government."
Paul Mackney, general secretary of NATFHE, the lecturers' union, could not hide his anger: "You get all the fine remarks about the fact that FE should no longer be a 'cinderella' service, but funding is not there and the core is crumbling.
"We've been told that Gordon Brown is sitting on a chest of gold. We want him to open it."
A Department for Education and Employment spokesperson said that colleges have to become more efficient:"We expect colleges to spend less per FTE student. We also expect them to recruit more students".