DFEE permanent secretary Sir Michael Bichard, who is stepping down this month, told the Commons select committee that it was important to “optimise” links between education and employment.

“The departments of education and employment were somewhat marginalised before, but they are now centre-stage, and if you have a restructuring, you need to give it time for the changes to bed in,” said Sir Michael.

“There has been a strong synergy between the two departments, but you wouldn’t necessarily lose that if they were de-merged.”

He was responding to committee chaiman Barry Sheerman’s concern that there were rumours of a major restructuring of the DFEE. Mr Sheerman said he found the rumour unsettling in the light of the possible departure of all the “main actors” in the department. On top of Mr Bichard’s imminent departure, Education Secretary David Blunkett has made it clear he does not want to continue if Labour secures another term.

The creation of a new agency combining the employment service and the benefits agency, has led to speculation that employment would move to a new ministry. However, government sources say the creation of the Learning and Skills Council puts training and lifelong learning firmly within an education secretary’s remit.

Paul Dinsdale