Proposals for £6.2bn in spending cuts were outlined today by George Osborne, the chancellor, and David Laws, Chief Secretary to the Treasury.

The announcement includes a £836m reduction for the Department of Business, Innovation and Skills.

However, of the cuts identified, which include culling quangos and slashing Higher Education, Mr Osborne said £200 million will be reinvested in Further Education colleges and Apprenticeships.

The reinvestment sees £150 million being used to create 50,000 new Apprenticeship places.

Graham Hoyle, chief executive of the Association of Learning Providers, said it was encouraging to see support for the Apprenticeship programme while tough decisions were being taken elsewhere.

"Learning providers, including those from the Third Sector, will also be pleased that funding for 16-19 year olds' training will be protected for the time being because the NEET issue has become far more serious over the past twelve months," said Mr Hoyle.

Martin Doel, chief executive of the Association of Colleges, heralds the coalition's decision to support Further Education as recognition of the important role the sector plays in driving the UK economy.

"This no doubt reflects the importance of the provision, as do the various references to colleges and Further Education made by George Osborne and David Laws today," said Mr Doel.

"New funding for college capital projects and for adult Apprenticeships is very welcome, as is the protection afforded to education for 16- to 19-year-olds. Two thirds of students of this age choose a college education."

He also praises the government's decision to cut quangos, such as the schools technology agency Becta, to save frontline services, but warns of possible wider repercussions.

"We are pleased that savings in relation to education quangos are being identified which won't immediately impact frontline delivery and the high quality, socially and economically vital courses that colleges deliver," he said.

"However, all government agencies have some functions that are essential, as well as some that duplicate other work. In the case of essential functions, we will be interested to see how these will continue to be discharged and how the funding to keep these going is preserved."

The government's emergency Budget, which will be announced on 22 June, will give more details on funding cuts and reinvestment plans.

Jason Rainbow

(Pictured: Chancellor George Osborne)