This is a sign of the importance of education in the Government’s reform agenda and the life of the country. However, the focus on two sets of institutions - schools and universities - risks diverting attention from other challenging funding issues.

Take 16-19 education and training. There are long-standing government targets to reduce the numbers who do not participate in education, training or work and to increase the numbers achieving the level 2 standard by 19.

Progress has been made towards these targets but it has been painfully slow. The staying-on rate at 16 has barely increased while the achievement rate at 19 hovers at the 75 per cent mark, some way short of the 85 per cent target set in the 1990s. It is easy to be cynical but this missed target means hundreds of thousands of young adults without basic skills and qualifications.

The odd thing about constant participation rates is that numbers on the ground have increased. There are 118,000 more 16 to 18-year-olds in colleges than there were six years ago, a growth rate of 19 per cent There were more births in the 1980s. There are more teenagers around now.

The education sector, mainly colleges, has risen to the challenge of a growing population of 16 to 18-year-olds. And while it has not increased participation rates, it has increased participation.

This is no small task. More students mean more courses, lecturers and buildings. This has been taken on at a time of great curriculum and funding change.

This expansion will continue. For the next five years, the number of 16 to 18-year-olds will grow by 1 per cent a year. More are likely to stay on in education and training because of improving GCSE scores in school.

Work by the Learning and Skills Research Centre in its Prospects for Growth report analyses these trends. The report anticipates steady growth in 16-18 numbers between now and 2008. Better GCSE results will mean more academic learners, many of whom will be in colleges.

The other push to participation in the next few years will be education maintenance allowances. The national EMA scheme starts in September and will extend to cover more than 30 per cent of the age group by 2006.

The offer of up to pound;30 per week for fulltime education boosted participation in the pilot areas and will do so nationally. The Government will spend as much as pound;500 million on EMAs when they are up and running - a large investment in education.

By their nature, EMAs are targeted at young people from poorer families which means, again, that they will have a large role in colleges. The Government’s Youth Cohort Survey confirms the social class gap between the 16-year-olds in colleges and school sixth forms. Thirty-eight per cent of those enrolling at college come from families working in “routine” jobs, twice the percentage of those staying at school. The difference that EMAs make to participation will be most visible in colleges.

The Department for Education and Skills has anticipated some of this growth in its current plans. Its budget to 2006 assumes year-on-year growth in the numbers of 16-18s in colleges. This growth accounts for a significant part of the pound;1.2 billion increase in the LSC budget between 2003-6.

Further increases will be needed in this summer’s spending review to sustain participation increases beyond 2006. A more pressing problem for many colleges is whether the money they need for 16-18s is here, now.

Some colleges face the financial strains of growth. The LSC is trying hard to plan provision but 16-year-olds do not necessarily follow government plans in their enrolment decisions. There is a funding guarantee for 16 to 19-year-olds but this can only be delivered if local LSCs can provide money at short notice each September.

There is also the unfinished business relating to the 16-19 funding gap.

Colleges have the central role in educating disadvantaged learners, but schools get higher funding rates for the same learning and face slightly fewer costs. The average college gets about 10 per cent less for 16-19 learning than school sixth forms.

Finally, there are the differences between funding and control systems.

Part of the college budget is now linked to exam results and the delivery of a three-year development plan. School sixth-form funding systems are simpler and easier to manage.

The debate on higher education has identified the need for the university sector to widen its intake. The plans for fees, loans and bursaries have some part in making this happen. Investing in colleges so that they can enhance the prospects of the most disadvantaged 16-year-olds may make the real difference.

Julian Gravatt is director of funding and development at the Association of Colleges