The Foster Report analysed the state of FE colleges in November 2005, and detailed 60 recommendations for raising the profile of the sector, including the need for a clear purpose and role.

On Monday, George Osborne used his first official speech as chancellor to outline where a £6bn funding axe will fall to help plug the UK's deficit. Extra university places and schools services previously planned by Labour were cut.

However, Mr Osborne revealed FE will benefit from reinvestment, notably £150 million for 50,000 new Apprenticeship places and £50m for colleges, particularly building programmes.

This announcement represents a significant shift in government strategy towards employability and skills.

The 157 Group, a partnership of 28 influential colleges, took its name from paragraph 157 of the Foster Report, which recommended greater involvement of college principals in flying the flag for FE and explaining the significant contribution that colleges make.

Lynne Sedgmore, chief executive of 157 Group, believes a lot has changed since Sir Andrew raised concerns about FE's focus, "partly because it did three things [in 2005] – employability and skills; a lot of academic progression through A-levels; and adult learning and leisure learning – and partly because there was not the same level of ownership as there was for universities and schools".

Ms Sedgmore said: "There has been significant change since then. The neglected child has blossomed, and the FE and skills sector is now finally being recognised for the extremely valuable contribution it makes to our economy, to our society and to local communities.

"This has come about not by accident but through the concerted efforts of organisations like the 157 Group to enhance the national reputation of Further Education. 157 Group colleges have an important role to play in the strategic leadership of reputation building, and we have put considerable effort into publicising their successes, to help ensure that colleges are recognised for their vital contribution to the economy and respected in their communities.

"The worst recession in decades has served to highlight the importance of FE's employability and skills mission, and it is not just fitting but essential that the sector should be singled out for reinvestment at this difficult time. If this is a sign of the esteem in which FE is held by our new ministers, then I am filled with hope for the future of our wonderful sector and the learners whose life chances will be enriched."

Toni Fazaeli, chief executive of the Institute for Learning (IfL), representing more than 200,000 teachers, trainers, tutors and student teachers across FE and skills, agrees the sector should take stock of the "radical shift" that has taken place since Sir Andrew's critical report.

"Further Education has a higher national profile; a more professional teaching and training workforce; and a more professional leadership. And, just as night follows day, the quality of provision in our sector has improved," said Ms Fazaeli.

She adds: "An acid test for IfL and our members is whether learners and teachers are more centre stage now. We observe and applaud that in 2010, despite our very straitened times, the FE zeitgeist sees protecting its frontline professional teachers and teaching and learning as paramount. A relatively lowly position for teachers and trainers has been consigned to the past.

"Over the last few years, IfL has worked to promote teachers and trainers to their proper post-Foster 'adult' and professional status. Just as accountants, lawyers and midwives have their respected professional bodies, so teachers and trainers have their own professional body in IfL. And the joy is that raising the status of professional teachers and trainers and the standards of their work, helps raise the standing of the sector as a whole, making it more attractive to learners and employers alike."

Despite these advances, uncertainty still plagues FE. The recently published Coalition Agreement fails to address significant concerns for the sector, such as Conservative and Liberal Democrat opposition to funding agencies YPLA and SFA, which were brought in by Labour in April to replace the Learning and Skills Council.

The new government still has many questions to answer, argues Jim Clifford, head of charity and education advisory services at accountants Baker Tilly.

Mr Clifford said: "Train to gain funding is on the way out, but uncertainty remains about what comes next: Will the Local Authorities keep 16-19? Will the 14-19 agenda continue? What happens to FE-based sixth form provision with the shackles coming off schools? With the review of curriculum requirements, and the growing moves towards reducing State control over what is taught, will A Levels, IB, or other qualifications come out on top? The Sector Skills Councils, with their impact reconfirmed, are set to take a role in what happens next.

"There is also emerging a strong sense of 'sink or swim' about the environment for educational establishments. If this is arguably a harsher world in which to work, will it lead to a greater reluctance for stronger colleges to come to the rescue of weaker ones? Perhaps, as we are beginning to see in a change in discussion with some colleges, it will turn those stronger providers towards a more predatory growth model in seeking acquisitions with which to develop their remit.

"This is probably a fair reaction to the new funding environment, and reflects a positive response to funding pressures as conveying opportunities as much as risks.

As the UK battles to reinvigorate its economy following the recession, it is natural for greater emphasis to be placed on skills, employability and work-based learning. However, the pressures that have brought the sector to the forefront of government strategy are also hampering its full potential.

As David Collins, chief executive of the Learning and Skills Improvement Service, tells FE News: "The middle child has enjoyed an unprecedented period of favourable attention over the past few years and is now seen as a having a key role to play in the education and training family. Unfortunately this success has come at a time when budgetary constraints mean that the rewards for such an achievement are likely to be far less than those deserved."

Jason Rainbow