Just two years ago, as Labour was limbering up for its landslide election victory, pundits were predicting a far from rosy future for training and enterprise councils. Speculation was rife: the employer-led bodies, created by the Conservatives, would be marginalised, recast or even shut down once Labour swept to power.

But councils had been talking to the government-in-waiting. And the day after Labour came to power, they submitted what looks like a prescient document on the New Deal to get the young unemployed off benefits and back to work. Joint partnerships at local level would be crucial to delivering the Government’s flagship programme.

They are now subject to a six-month review, their future is being reconsidered in the light of plans for regional development agencies and their activities in the schools sector may be more limited in future. But this does not worry the national officers.

Chris Humphries, chief executive of the TEC national council, soon to move to the chambers of commerce, says the councils have positioned themselves as “true partners in local economic development”. The obituaries proved wide of the mark. “If TECs had not been in place, I think the Government would have looked at inventing them,” says Chris Humphries. As overseer of national policy for the 79 councils in England and Wales, he should know.

To get results, the councils told the new Government, New Deal would have to engage directly with local employers. Employers work more comfortably with organisations which derive from the same background. Training and enterprise councils are well placed to act as broker between the public and private sector - a key role for helping deliver not just New Deal, but many of Labour’s manifesto priorities. The Employment Service, with its responsibility for Job Seekers Allowance and benefits, may well be the lead agency but it clearly could not deliver the programme alone.

Chris Humphries is in buoyant mood, relieved that those in power are taking a strategic approach to beefing up the nation’s skills base. He gives enthusiastic backing to the priorities Labour highlighted in its manifesto: reaching those in work as well as those not ready for work, focusing on workforce and management development in small firms and ensuring company initiatives such as Investors In People are taken seriously.

The Green Paper on Lifelong Learning maps out radical changes to the way learning is delivered - Chris Humphries is quick to point out that his councils first put forward the model for Individual Learning Accounts way back in 1994. The national council has voiced support for what could be the logical outcome of ILAs if they take off: learner choice driving the post-16 education system, putting cash in the hands of the consumer rather than giving it straight to institutions. Other concepts developed by the councils - Modern Apprenticeships, Investors In People - have been enthusiastically embraced by the Labour in power.

The councils are “very pro” the Government’s plans for regional development agencies, says Chris Humphries, and have no problem with their establishing regional strategies. The training councils are grouped in 10 regions - policy is framed nationally but collaboration and joint projects tend to be worked out at regional level.

But the councils do not want to get caught in the crossfire if there is a conflict between national policy and the priorities of the regions. They want the Government to be clear about how this can be avoided. The councils, with their thorough knowledge of local labour markets - the regional agencies will benefit from their expertise - will not easily relinquish their position as key players at local level.

“Our concern is that just as arguing you can do more at regional than at national level, subsidiarity goes further down the chain,” says Chris Humphries. “You can do more at local level too. We would be worried if the regions started to override the need for local discretion and flexibility rather than taking it into account when shaping policy. ” Partnerships between education and industry promoted by the councils are playing a vital role in helping the drive to equip young people for the world of work. But, says Mr Humphries, much remains to be done. “One of the things we hear all the time from employers is a lack of work preparedness, from 16-year-olds with or without GCSEs to graduates.

“TECs fought hard to keep teacher placement schemes where 10 per cent of teachers spend a short stint in the workplace each year. It was about to disappear because its funding had expired but the Department for Education and Employment has now picked up the pound;2 million tab.”

Although training councils seem pleased that the Government is taking a strategic overview and shaping radical policies such as the learning accounts and the University for Industry, which will spread access to training, there are issues to resolve.

The councils have argued that the Government could insist companies which sign up for the subsidised employer option on New Deal, picking up the pound;60 a week payment, should pay young people a reasonable training wage. But although the Government is encouraging employers to do this, there is no stipulation.

The councils’ advice to ministers on this matter has been consistent. Chris Humphries explains: “Our experience shows it is possible to insist on paying a real training wage but the Government thought it was too risky a strategy. We believe it is all about raising expectation.

“Birmingham and Manchester have higher than average unemployment and higher than average deprivation. They are offering young people on New Deal the rate for the job. The jury has to be out but if they are doing it, and manage to sign up enough employers to meet demand, the question could well be asked in 12 months’ time, why are we allowing other areas not to?” With the minimum wage set at pound;3.60 for over-21s, Chris Humphries believes pound;3 an hour could be a rate that quality employers would be prepared to pay people under 21. Data from pilot pathfinder areas for the New Deal, three months before its national launch in April, showed a high level of employers willing to take on young people without a government subsidy. The data showed that 64 per cent of young people on the New Deal schemes had found unsubsidised jobs. The Government’s assumption when it planned the schemes was that only 40 per cent would do so. It appears that employers are prepared to pay at least some people on New Deal a fair wage.

The training councils are well placed to know what employers want and to play a crucial role in galvanising interest in important initiatives such as the University for Industry. Together with the learning accounts, it promises to transform employee learning and could well prompt some hard thinking from those supplying traditional day release courses.

“We need the UFI to build demand in the workplace,” says Mr Humphries. “It’s all about reaching people where they are, and not expecting them to turn out to traditional places at appointed times. If all we do is stick another label on existing college and university provision we will be transforming nothing.”

And training and enterprise, which appear to be flourishing under New Labour, are all for new ways of boosting skills, drawing on their track record as partners and brokers. The Government has not been slow to acknowledge this.