The public bodies responsible for funding the further and higher education sectors should be merged, according to adult education body Niace.

In its recommendations for the chancellor’s summer Budget, due on 8 July, Niace says the government should create a single funding agency for all post-19 funding, merging the functions of the Skills Funding Agency (SFA) and the Higher Education Funding Council England (Hefce).

“Partners across the sector recognise that to improve both understanding and take-up of skills training - from employers and individuals alike - we need to strive for greater simplification of the structures, funding streams and qualifications levels underpinning both FE and HE,” it says.

It adds that the remit of Ofsted could be refocused to pre-18 compulsory education, with destinations and earnings playing a greater role in evaluating adult provision.

Niace’s proposals, published today in a document called Raising the Productive Potential of the Economy, set out how rapid progress could be made to “unlock the potential” of five million people it says are stuck in low-paid work.

These include calls to protect funding for English, maths, traineeships and English for speakers of other languages (Esol), which it says should be delivered through a new citizens’ curriculum.

It also calls for a new career advancement service to help low-paid workers, as well as funding for employment programmes for disabled people to cut the disability employment gap.

The report has been launched to mark Adult Learners’ Week, which starts tomorrow.

David Hughes, chief executive of Niace, said: “Unemployed people are currently not supported to gain the skills they need for sustained employment, and 5 million people are stuck in low-paid work because they aren’t getting the opportunities they need to progress.

“The fact that socio-economic class is still the best marker for participation should be a call to reform and action, because it undermines our economic and social development.

“If this government truly wants to raise the productive potential of the nation, then we need to foster a universal culture of lifelong learning. That will require a different approach and bold actions from the government as well as from others; we are ready to support them in that.”

Niace has also published its annual participation in learning survey today.