John Harwood, Chief Executive of the Learning and Skills Council, commented: "We welcome the Chancellor's statement today and the importance it places upon the role of further education and vocational learning. The news of a 1% real terms growth in unit funding for further education colleges committed to stretching performance targets and raising standards is particularly encouraging.

"The Chancellor has rightly placed an emphasis upon extending the basic skills of 1.5 million adults by 2007 and reducing by 40% the number of adults in the workforce lacking NVQ level 2 or equivalent skills. Expanding Modern Apprenticeships and other work related qualifications to one quarter of young people will help us address the low levels of qualified adults in the workplace.

"Extending Education Maintenance Allowances will also play an important part in encouraging the number of young people staying in learning at 16 - currently one of the lowest staying-on rates among developed nations."