The leader of Britain's Further Education Colleges is calling on the Government to introduce radical changes in policy when it launches its Skills Strategy in June.

David Gibson, CEO of the Association of Colleges, believes that millions of people across the country are missing out on training because of over-regulation of the college sector and cuts in funding for adult learning by the Learning and Skills Council, the Government quango responsible for FE funding.

The AoC is putting forward a blueprint for change as part of its campaign, "Colleges at the Heart of Business". It follows sharp criticism by Education Secretary Charles Clarke, who has accused the sector of not listening to what students or employers want.

This has sparked a strong rebuttal from the AoC, which maintains the fault lies with red tape preventing Further Education colleges from offering short industry and job-specific training and qualifications. The Learning and Skills Council has also cut the number of adults that colleges can help.

David Gibson said: "Currently the Government only funds traditional college courses, preventing people taking courses on subjects just relevant to their job. Despite this three million adults do gain new skills and qualifications at their local college every year - if colleges were given greater freedom to design their own courses then millions more people could be taking advantage of training."

Colleges already provide over half of all work-related training in Britain, however 1 in 3 workers still lack basic reading, writing and maths qualifications. The AoC now wants Government to offer workers and businesses financial incentives to make taking up training opportunities more attractive following the collapse of individual learning accounts.

David Gibson said: "We need to see a real mind shift in the way that both employers and the public see the culture of education in Britain. It needs to be about giving people opportunities and encouragement to improve their skills and job opportunities and letting colleges work with business and industry to tailor-make training courses to suit their needs. Colleges are already at the heart of business and have partnerships with many of Britain's biggest businesses. Every college provides training for an average of 200 local small firms. Colleges provide three times as many training days a year (200 million) than industry itself. While 31% of workers received training from their organisations in 2002, the average amount of on-the-job training per employee was only 1.8 days."

AoC believes both employers and learners should be given tax and other incentives to encourage people to improve their learning and better their skills, but we also need to campaign to change the culture - so that lifelong learning is recognised and valued - both in industry and society.

The Government has declared that its Skills Strategy will push for local colleges to provide more training for businesses to develop the employment-ready population so badly needed if the UK is to prosper in the global marketplace. One of the key issues the Government will look at in June will be whether training is flexible enough to meet the needs of business - both in terms of its content and delivery.

The Association of Colleges represents more than 400 general Further Education colleges, sixth form colleges and specialist colleges in England, Wales and Northern Ireland. Colleges have more 16-18 year olds students than all schools, (666,000 compared with 440,000), and over twice as many adults as universities (3.5 million adult learners in FE).