The man behind the creation of England’s biggest-spending quango says it has failed some of the country’s most needy teenagers.

Sir Michael Bichard, who was permanent secretary at the Department for Education and Skills when the Learning and Skills Council was set up, said the quango’s priorities were making social inequalities worse.

“As someone who played a central part in the establishment of the LSC, this is personally very disappointing,” he said, “because the simple fact is that the council is not treating seriously or equitably this most vulnerable group.”

As chairman of Rathbone, a training charity dedicated to helping disadvantaged teenagers who have failed at school, he said he could see how LSC policies are squeezing out opportunities to take NVQs, apprenticeships or entry to employment courses.

He was speaking at the City of York Annual education lecture, where he said Treasury targets had put the few opportunities open to low-achieving school leavers under threat.

Free-standing NVQs in work-based learning are no longer being funded, removing one option for low-achieving students.

Many of these teenagers have already failed at college or have poor behaviour which discourages colleges from taking them on, he said.

He said the LSC has put pressure on training firms which makes it less likely that they will take on those who have struggled at school as apprentices.

Training providers are becoming more selective because they are under pressure to improve the numbers of apprentices completing their course.

The LSC is also encouraging training companies to increase the numbers of apprentices who are already in work.

He said the LSC was increasingly putting a 22-week cap on funding for entry-to-employment courses, which is not enough for those with serious literacy and numeracy problems.

Sir Michael said the effect of all these policies together was to shut a group of students out of the education system. He said: “I am one of those who has cause to be grateful for the English education system.

“I never want to close behind me that gateway of opportunity to motivated, gifted children, whatever their family background or social class.”

Stephen Gardner, director of work-based learning at the LSC, said Sir Michael had misunderstood the funding priorities.

He defended the pressure to improve apprenticeship completion rates. “I most certainly would not be happy to send a son or daughter of mine on a programme where 4 out of 5 learners fail to achieve their main aim,” he said.

“To say that focusing on achievement will restrict access for the least able is true and would be damaging if there were not a range of programmes onto which learners not yet ready to start an apprenticeship could enrol. But this is not the case.”

David Bell, the current Permanent Secretary, declined to comment, but Bill Rammell, minister for further education, said: “As well as offering young people employment-based training as the best possible opportunity for long term employability, we are giving the necessary support for those who need extra help.”