The training needs of industry and commerce are not being met by colleges. Instead colleges give higher priority to the preferences of individual students, according to a national inspection report.

The Further Education Funding Council has found that while student demands are generally well catered for, few colleges conduct surveys of local business needs and little attention is paid to skills gaps in the national economy.

The report, published this week, says colleges have not revised arrangements for work training in response to the decline in part-time day release enrolments.

It says: "Few colleges have organised their courses into modules which can be delivered separately and flexibly; marketing policies and plans are often underdeveloped; labour market information is not detailed enough to support specific course planning and most colleges do not publish comprehensive information on student destinations to help those who follow them."

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The report finds that by responding to student demand, colleges have been successful in widening access to further education. Courses offered as part of recreational programmes were now delivered through the national qualifications framework. However colleges had often failed to analyse the reasons for declining student numbers on part-time courses nor had they explored alternative and more flexible ways of delivering training and education to employees. In addition specialised training facilities were not always marketed properly and employers reported to the funding council that college staff rarely visited firms to establish training needs.

Some colleges, however, are striving to meet the needs of employers and earn themselves crucial extra income at the same time. In West Yorkshire, for example, companies stand to benefit from a new Business and Training Services initiative being devised by Leeds-based Thomas Danby College.

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A 200-strong team of professional trainers and advisers at the college will provide customised training to all sectors of regional and national business, everything from consultancy and personal development programmes to NVQ assessment and accreditation. Programmes can be delivered in-house or at the college and clients include Elida Faberge and Bradford textile firm Smith Harrison.

A tailormade project has been devised for Smith Harrison which includes a review of staff structures to reflect change within the company, costing systems, assessment of productivity, and stragetic planning for growth and staffing needs.