The report, drawn up by group a group of officials chaired by the City of London’s education officer and including Wandsworth’s chief inspector, says that even the Further Education Funding Council now accepts that the market approach has failed as it is pursuing ends determined by itself. “In the run-up to the 1992 Further and Higher Education Act the LEAs’ role in further education was demonised. Some would argue that the FEFC has taken on in reality many of the attributes of these mythical phantoms,” the officers said.

The Act assumed that colleges would compete for market share, with the efficient and customer-oriented ones gaining at the expense of those which did not provide efficiently for customer needs. The officers said the market experiment had failed because colleges are often not competing in the same market because of differences in the curriculum areas they cover; difficulty in deciding whether the customer is the student, industry, or the community; the insistence of college boards and managements of basing decisions on the good of the local community rather than solely on the financial interests of the college; and that neither the colleges nor consumer demand can influence the “market price” since the overall funding is determined by the FEFC reacting to political imperatives.

The market is further distorted, points out the report, by lower funding for college students than for sixth formers, which pushes schools and colleges towards competing only in the courses which are cheapest to provide.

The report points out that while FE has to some extent achieved the high profile predicted from incorporation, with “some spectacular successes and some well-publicised difficulties”, this has not prevented financial cuts while other parts of the education system are sustained.

What is needed, it says, is “a new regional planning paradigm” that brings together all the interests involved in post-16 provision and ensures that decisions are made at the right level, whether it is regional, local authority area, or individual schools and colleges.

The key role in the new framework should be entrusted to LEAs, says the group, partly because they are best placed to assemble information on the demand for education and training and to build up a picture of existing and planned courses. But they can also seek to match 16-19 education and training to provision for the 14-16s and the over-19s, and to ensure that it meets the requirements of pupils and students with special needs, “troubled and troublesome students, the disabled and returners”.

The group suggests that a model for the proposed regional system should be developed in the London region through the ALG “and thereafter, through a greater London authority”.