Politicians and senior officers across the country failed to rate the service and spent allocated central government money on other aspects of education. This was the "fundamental problem".
Mr Peacock, who trained in community education and worked in the voluntary sector for 12 years, said that local politicians believed community education and informal learning were suffering from a lack of precision about outcomes, a lack of definition of targets and a lack of clear statements about levels of achievement.
He added: "One clear message is that we have to tackle that or we are never going to be able to argue for more resources." Community education staff had to narrow their agenda and appreciate that they could not do everything they would like.
But he offered no comfort that a substantial injection of cash would be forthcoming in this week's government spending review. Community learning - as it is now being styled - was "an approach - not a sector or department and not limited to the old community education agendas". Funds would be spread across a range of services and organisations.
Earlier, Charlie McConnell, chief executive of Community Learning Scotland - formerly the Scottish Community Education Council - warned that the Executive's social inclusion aims would fail unless core funding was increased. "There is less public money going into mainstream provision in real terms than under the former goverment by a factor of pound;20 million."
Mr McConnell added: "What will turn quality aspirations and rhetoric into practical, effective outcomes is a supply side quantity of professional community education workers, youth workers and community workers. Here we have a problem."
The number of professional staff was less now than it was in the early 1990s and levels of "disinvestment" would be difficult to turn around quickly. Unless community-based learning was given a substantial financial lift, the Government's aims for lifelong learning and active communities would not be realised.
Jim Rooney, an officer in Clackmannan, said that 80 per cent of young people's time was spent at home and in the community but for every 100 teachers employed there was only one youth worker. This was an imbalance that had to be corrected.
The national conference was the first since publication of the Osler report almost two years ago on refocusing community education. Mr McConnell said he was delighted that community-based learning was "now out of the shadows" and given a higher focus in Government policies.
Mr Peacock urged councils to emphasise adult literacy and numeracy, social justice and work with the elderly within local community learning plans. Youth work also needed to be re-established as a priority, possibly with a fresh impetus from a specialist national youth agency.
"We are committed within the Executive to an action programme for youth but no final decisions have yet been taken about taking that forward," Mr Peacock said. Peacock spells out 'fundamental problem' that put councils in the cold