Colleges will be hit by a controversial funding rate cut for 18-year-olds far worse than school sixth forms, a much-anticipated government impact assessment has revealed.

The report on plans to reduce the full-time funding rate for 18-year-old learners to 17.5 per cent less than 16 and 17-year-olds was published by the Department for Education today — nearly a month after it was promised by Education Secretary Michael Gove.

It reveals that general FE colleges will be among the worst-hit of all institutions — with an average reduction in funding of 3 per cent. For land-based colleges it’s 2.5 per cent, for commercial and charitable providers it’s 1.5 per cent, and for sixth form colleges it’s 1.2 per cent.

But for school sixth forms it’s just 0.4 per cent. However, the report does not say how much the funding rate cut is expected to save.

Nevertheless, it does also reveal that four options for a cut were considered. Firstly, a reduction in funding across the board for 16 to 19-year-olds, secondly a reduction in funding for disadvantaged learners, and thirdly a reduction in funding for apprenticeships — but it was considered that the fourth option of cutting for 18-year-olds would be the “least detrimental” option.

It was further revealed that no decision to reduce the impact of the policy could be made until the end of next month at the earliest.

In an open letter to Education Select Committee chair Graham Stuart, Mr Gove said: “As we discussed, the department’s budget has been cut; this means that we are in the unfortunate position of having to make tough decisions about 16 to 19 funding.

“I looked at the options available, and came to the conclusion that reducing funding for full-time 18-year-olds was the least detrimental option, though certainly regrettable.

“I offered to share with the committee the impact assessment of the reduction in funding for 18-year-olds.”

He added: “I told the committee that I would consider options to mitigate the impact of the decision.

“I will do this, but I need to look at it in the context of the 2014/15 academic year demand on the 16 to 19 budget, and because this is based on lagged student numbers we will not have firm figures until the end of February.”

The report highlighted the fact the biggest impact would be in London, the South East and North West, which have the highest percentage of learners over the age of 18.

One of the main concerns raised about the proposal was that black and minority ethnic (BME) students would be disproportionately affected.

And although the report accepts that there is a higher proportion of BME learners among full-time 18-year-old learners than the total 16 to 18-year-old student population, it does not say how adversely they will be affected.

The plans have been condemned by sector groups such as the Association of Colleges (AoC), the 157 Group, the National Union of Students, the Sixth Form Colleges Association and the Association of School and College Leaders.

A letter originally sent out by the Education Funding Agency last year said the decision had been made as those who were 18 years old at the start of the academic year “will already have benefited from two years of post-16 education and will not therefore need as much non-qualification provision within their study programmes as 16 and 17-year-olds”.