By Hannah Richardson
BBC News education reporter
Colleges have asked for time to make the required savings
Apprenticeship and college budgets face public spending cuts, as the government publishes its skills strategy.
Ministers have argued boosting skills is critical to the recovery of the UK economy, but are reducing spending by £433m next year.
Although more apprenticeships will be offered, the rate at which they are funded is being cut by as much as 10%.
The Association of Colleges chief, Martin Doel, says the plans will require "significant savings".
Savings of 7% are being made to adult learner budgets, hitting some courses designed to boost basic skills.
Alongside this, savings of 3% are being required of all publicly-funded adult learning courses, many of which are provided by further education colleges.
The funding changes appear in the Skills Investment Strategy, published by the Department for Business, Innovation and Skills as FE college providers meet for their annual conference in Birmingham.
In the document the government says it is spending 3% more on training places in England overall compared with last year.
But this includes three recently-introduced employment programmes which are either being frozen or reduced next year.
It also comes against the backdrop of a promised 8% increase in spending which was part of the government's pledge to boost productivity under the Leitch Review of Skills.
Speaking from the Association of Colleges conference, its chief executive Martin Doel said it was misleading to call the paper an "investment strategy" as it embodied "significant savings" and that colleges would need time to adapt.
"You can't make these type of changes overnight.
"These savings do represent cuts - particularly to the rates of funding for certain courses - at a time when the services of colleges have never been more in demand.
"We are therefore looking to work closely with government and its agencies to ensure that students, communities and businesses that colleges support are protected, as far as is possible, from the consequences of funding changes," he said.
The strategy itself says: "There is a clear expectation that FE colleges and training institutions will be required to deliver better value for money and realise efficiencies in order to continue to deliver high quality training to meet the needs of learners and employers at a time when public finances are under pressure".
General secretary of the University College Union Sally Hunt said: "We were given assurances that planned efficiency savings would not impact on front-line services but the Skills Investment Strategy will see a reduction in places for the most disadvantaged groups when it comes to studying.
"It will also prevent colleges from putting on courses that lead to qualifications and fundamentally restrict choice in further education."
The National Institute of Adult Continuing Education said it was concerned that the budget for developmental learning would reduce from £330,769m this year to £186,696 million in 2010-11.
The number of funded learners aged 19 and over supported by these monies would fall from 703,000 in the last financial year to 213,000 in 2010-11, it added.
NIACE principal advocacy officer Alastair Thomson said: "We accept that savings may have to be made but we expect the government to be true to its word in protecting the most vulnerable who may have left the labour-market or be some distance from it."
Other savings include asking employers that benefit from in-work training under the Train to Gain initiative to co-fund places.
Alongside the efficiency savings, ministers are warning colleges and training providers that poor quality provision that does not meet minimum levels of performance could be cut.
The strategy says that those that fall below these levels would be required to produce an action plan and would be offered support to help recovery.
But a leaked BIS document urges ministers to reset these at such a level as to ensure that cost pressures are met.
Conversely, extra resources and freedoms are being are promised for colleges that are deemed to be outstanding.
Skills Minister Kevin Brennan said the overall apprenticeship budget for next year was higher than ever before.
"The 10% reduction in the unit cost of an apprenticeship will only affect apprenticeships for adults over 25. We are confident that we will be able to maintain the number of apprenticeship starts in this age range."
And the National Apprenticeship Service (NAS) said the recent figures only applied to learners over the age of 19 and said the overall the budget for apprenticeships had increased 2%.
NAS chief executive Simon Waugh said this rise would enable an extra 35,000 Level 3 apprenticeship places to be made available over the next two years.
"The number of people taking an Apprenticeship has trebled in the past ten years," he said.