The FE sector in Wales has been warned that it must come up with “radical and imaginative” solutions to make the most of public funding in future.

Colleges were stunned earlier this year when the Welsh government announced it would slash funding by 5 per cent in 2014/15.

Ministers had already pulled £2.5 million from college budgets during the current academic year and principals warned they would have no choice but to cut courses.

Yesterday, at ColegauCymru’s annual conference in Cardiff, deputy minister for skills Ken Skates (pictured) said that the financial climate will continue to be “challenging” for FE.

“We are still facing a period of financial austerity,” he said. “Going forward, this may mean more radical and imaginative solutions to make the most of the money we have.”

Although Mr Skates did not set out what this may mean, he did pledge to protect provision for 16- to 18-year-olds.

Funding for post-16 education in Wales will soon see a shift from being based on qualifications to courses, which the minister said would help highlight underperforming courses.

He also said there were still far too many people in Wales who lacked the skills to succeed in modern society, and said the FE sector had a vital role to play in helping them.

Too many people enter FE to study low-level qualifications, he said, and providers must do more to increase access to higher education courses.

Earlier ColegauCymru’s chair Mark Jones, principal of Gower College Swansea, told delegates the last year had not been easy and warned things would be even harder in future.

“The fear is some of the work we have been doing well, we will be doing less of or maybe not [doing it] at all,” he said.

Despite the warnings, Mr Skates congratulated the FE sector for the way it had dealt with recent challenges, including budget cuts, college mergers, the new common contract for staff and new legislation.

“The FE sector in Wales has been instrumental in delivering a range of key policies for the Welsh government and will continue to play a key part in meeting the education and skills needs of the population,” he said.

“Time and again the sector has proved it is signed up for change. It demonstrates to the rest of the UK what the Welsh FE sector can achieve when it puts its mind to something.”