The government has laid out its spending plans and targets for the new Learning and Skills Council, which takes control of post-16 education and training from April.
The LSC's £5.5 billion grant for next year has been divided by the Department for Education and Employment into four blocks, with goals set for: educating and training young people; raising skill levels for adults and involving employers; infrastructure, local initiatives and improving standards; and administration.
In his grant letter, education secretary David Blunkett says he will expect the LSC to set out its medium-term strategy and targets, and to produce an operational plan setting out how it will use the money allocated to it.
The biggest block of money, more than £2.5 billion, will go towards increasing demand for learning by adults and employers.
Mr Blunkett wants an extra 625,000 adult learners to enter further education next year, compared with the 1997-98 base year for these targets.
The LSC will be expected to drive forward a national strategy for improving adult basic skills, set out in a paper, Skills for Life, launched last week. Mr Blunkett wants 500,000 adults to be taking courses to improve their literacy and numeracy skills by 2002, with the aim of reducing the number of adults with weak basic skills by 750,000 by 2004.
The DFEE has also allocated more than £2.3 billion to support objectives for improving participation and achievement levels among 16 to 19-year-olds. This includes support for a new statutory entitlement to education and training for this age group.
The adult funding was welcomed by college heads. But the Association of Colleges has warned that government plans to carry out basic skills screening for adults applying for benefit could backfire.
Judith Norrington, the AoC's director of curriculum and quality, said there was a danger this approach would fail to meet learners' needs and would put people in the classroom against their will.