College funding chiefs have sounded the death knell for further education as we know it with a call to scrap the Further Education Funding Council and to establish a single all-embracing lifelong learning agency.
As part of the lifelong learning review, ministers are set to accept the FEFC recommendation to establish a national funding council covering colleges, school sixth-forms, private training providers, employers and adult learners and funded directly, where possible, under a common funding tariff.
The council could also take responsibility for funding the University for Industry.
School sixth-forms, which receive more money per pupil and are seen as uneconomic, would initially be funded via the agency through local education authorities, but directly funded later. The agency would "rationalise" provision and create providers.
The FEFC said the agency would have an "arm's length" relationship with government. A central council would oversee three committees covering full-time 16 to 19-year-old provision, skills and employment, and adult education. It would have a statutory duty to take these committees' advice when setting funding and allocation policies.
Most money would go direct to providers from common core funds, but a proportion could be distributed through local partnership bodies that bring together representatives from employers, deliverers and community organisations.
The local partnerships would have a statutory duty to assess provision. The FEFC has suggested a contractual link between the new agency and Regional Development Agencies to share skills audit information.
A stumbling block is the inspection regime. Ministers are understood to favour a clear separation between inspection and funding and want an independent "single, coherent post-16 inspectorate", as the FEFC is recommending.
But the FEFC is still keen to maintain "strong links between the inspectorate and the national funding body".
Another grey area in the review is the future of Training and Enterprise Councils. Education secretary David Blunkett briefed the TECs last week, saying that they should read little into his recent high-profile condemnation of financial mismanagement at South London TEC (Solotec).
But TECs believe their training role will be taken over by the new funding agency. Ministers at the Department of Trade and Industry are said to want greater centralisation of their business support role. A white paper is expected this summer for implementation in 2002.