Are the SFA mad?

I ask this because just a few weeks ago, I saw a senior manager of SFA accept in open forum that Functional Skills (compared to Adult Basic Skills) were:
More rigorous 
and therefore
Needed more teaching time
Yet FE Week reports today that funding guidelines will cut the funding available by 40% and a good piece by Roger Francis of Mindleaders confirms this view.
I'm sorry, but this is just plain crazy and it will mean that providers will do all they can to avoid Functional Skills.