Will Cinderella get to the ball?

Further education is feeling unloved, unappreciated and underfunded. Tory policies mean cuts of pounds 115m later this year. Perhaps Labour will be a fairy godmother - or will Cinders miss out again? By Lucy Ward

Further education, the Cinderella sector of the education world, is in a quandary. Do funding cuts biting next year mean the party is over for colleges, or does the election of a lifelong learning-friendly Labour government herald - at last - an invitation to the education ball?

Colleges could be forgiven for remaining sceptical of a fairy-tale ending. While Tony Blair took to the campaign trail stressing his passion for "education, education, education", principals were confronting the prospect of a budget cut of pounds 115m for the next academic year. As primary schools were promised more cash to reduce class sizes, colleges were trawling the accounts to find scope for "efficiency gains" of an average of 7.6 per cent in 1997-8. A report being considered by the Further Education Funding Council today, before being passed to ministers, is expected to confirm that at least a fifth of all colleges are in poor financial health.

After almost 20 years of continued growth, the cuts mean colleges' rolls are set to shrink in September, despite the fact that would-be students are knocking on their doors in greater numbers than ever. And, despite the sector's success in meeting tough expansion targets while driving down costs, colleges feel that their role in providing job training, adult education and more A-levels than schools is widely unrecognised and misunderstood.

Amid the gloom over funding, the legacy of the previous government, the Cinderella sector is anxious to know whether the Labour fairy godmother can spirit it from the hearth to the ballroom. The party's manifesto, much to principals' disappointment, never mentioned further education by name and referred to colleges only in the context of schools. In an age of mission statements, colleges want guidance on what their mission will be, and what tools they will be given to fulfil it.

The ministerial team whose brief includes further education does not hesitate to make encouraging noises. Baroness Blackstone, Minister for Education and Employment, outlines a vision of a sector "full of ideas, vibrant, innovative, totally committed to outreach and to helping people who in the past have not really had access to it." Failure in FE, she says, would not only hit opportunities for those seeking qualifications, but will also damage Britain's economy and skills base.

Colleges seeking hard cash to fulfil ministers' dreams will have to turn to the government's flagship New Deal for getting 250,000 jobless 18- to 24-year-olds off benefits. The sector is being advised behind the scenes to act swiftly if it wants a share of the windfall tax bounty, some of which will be used to offer the option of training to unemployed young people. Colleges might also expect some gains under Target 2000, the Government's reshaped youth training programme for 16- to 17-year-olds.

However, there will be no easy windfalls for further education - colleges will have to fight it out with training and enterprise councils for the New Deal cash, which is likely to be distributed via the Employment Service. Baroness Blackstone says: "Colleges should be thinking very hard about how they can help in the enormous task of getting people back to work."

Colleges, with their track record of delivering rapid and cost-effective training, will make the most of any windfall cash available, according to David Melville, chief executive of the Further Education Funding Council. The problem for further education is that nothing else in Labour's programme - tied by Gordon Brown's spending constraints - appears to offer the sector the money it says it needs to meet existing demand.

Professor Melville, meeting his new paymasters next week, will draw their attention to a shortfall in FE funding estimated to total at least pounds 100m annually. Colleges claimed that amount this year in extra cash from a pot of money for expansion established by the last government and hastily withdrawn when the cost of the recruitment boom emerged.

With no hope of the pot being restored by Labour, the first of 250,000 would-be students that the Association of Colleges claims will be denied a college place next year are already being turned away.

The ceiling on further education funding, imposed for the first time since colleges left local authority control in 1993, will add to the pressure on the sector to establish its mission. With limited resources, the emphasis will fall on identifying priorities, rather than continuing to expand in all directions - from scuba-diving training to media studies degrees.

DfEE sources suggest that colleges will be encouraged to put provision for 16- to 18-year-olds and for the unemployed at the top of their priority list. A report due in July from a committee led by the barrister Helena Kennedy will encourage colleges to widen access to further education among adults who have dropped out of learning. To stay within their budgets, colleges may have to move away from subsidising employee training, despite their success in encouraging employers to introduce vocational qualifications.

Publication of the Dearing report on higher education, also out in July, should help to clarify another aspect of colleges' mission. Early indications suggest that FE colleges, which already deliver an eighth of higher education courses, will have a major role to play, possibly in providing the first two years of degree courses while universities provide the third.

Dr Kim Howells, formerly a trade and industry spokesman and now the minister responsible for lifelong learning, takes a robust approach to colleges' concerns over mission and funding. Substantial savings could be made, he says, if colleges - and universities - swapped competition for collaboration. That way, they could keep open costly but high-quality departments offering training in areas vital to industry, such as engineering and science, even at the expense of less valuable areas. He says: "There has to be judgement, and if the only judgement is to be that you have to stuff as many students as you can into colleges regardless of the course or qualification, that seems to me a nonsense."

As the new ministers set out on college fact-finding visits, further education leaders are preparing to ensure that their voices are heard. A new parliamentary group of principals, organised by the Association of Colleges to lobby the Government on key issues, met for the first time this week. One member of the group, Mike Austin, principal of Accrington and Rossendale College, believes that the Government still needs to explain exactly what it wants from FE. He says: "There are questions over funding and structure, but we could really do with a clear policy on what post- compulsory education actually means".