Further education leaders and politicians have warned that the proposed new Learning and Skills Councils regime may amount to a "reinvention" of expensive Training and Enterprise Councils.
Plans for 47 regional councils and one central body to fund and plan further education and training are likely to quadruple the current running costs of the Further Education Funding Council for England - wiping out the Pounds 50 million saving ministers expected to make by abolishing the TECs - according to an analysis by the Association of Colleges.
Calculations by the AoC, which has been monitoring the government's plans as they unfold with the passage of the Learning and Skills Bill through Parliament, indicate that the councils could cost Pounds 120 million a year to run - almost as much as the TECs.
With an expected 5,500 staff, compared with the FEFCE's 350, the councils are likely to spend about Pounds 105 million more than is spent on administration, the AoC said. Their running costs would then amount to 2 per cent of the funding they allocate, compared with 0.5 per cent under the FEFCE.
John Brennan, the AoC's director of FE development, said: "Although we acknowledge that there are some things the councils will have to do that the funding council does not, this seems to us a very high level of staffing and administration costs."
Tim Boswell, Conservative FE spokesman, said: "I do not believe the government's claim that it is going to save Pounds 50 million with this new system. Every time you look at it it gets more complicated."
The AoC is concerned about the transfer of TEC staff under employment protection law to the councils. It fears that many TEC managers may also secure senior positions.
The government published details today of how it proposes to fund colleges and other training providers under the LSCs.
Two consultation papers recommend that 47 local councils should make most of the decisions about allocations to providers, and should have the power to vary national rates where market conditions demand it.
However, up to 90 per cent of funding will be distributed according to a national formula, which will include:
A programme weighting element to reflect the size and complexity of provision
An achievement element, varying according to the nature of the programme
A geographical element - initially applying only to London
A "disadvantage" element, based on postcodes and other indicators - aimed at widening participation.
The papers reiterate the government's commitment to free tuition for 16 to 19-year-olds and disadvantaged people. Fees for adults will be capped at 25 per cent of course costs. Those with special needs or learning difficulties will get additional support.
But there is no indication that the government plans to even out funding levels between FE colleges and school sixth forms. Malcolm Wicks, the lifelong learning minister, said sixth forms, which will not come under the new regime until 2002, will have their funding levels maintained.
Specialist colleges in art and agriculture are to get a 5 per cent increase in funding in 2000-01.