Its latest performance report notes that the targets to improve adult basic skills have been exceeded more than two years early, with 2.8 million adults having achieved literacy and numeracy qualifications for the first time.

And it says that it is on course to reduce the number of adults in the workforce without a level 2 qualification or five good GCSEs. However, it will mean an extra 1.2 million adults need to have qualified between 2008 and the end of next year. The department said it is also on target for 130,000 apprenticeship completions in 201011, and may exceed it, having achieved 126,000 last year.

Business, innovation and skills secretary Lord Peter Mandelson said the progress proved creating the new department had been a success. “In creating BIS, we have formed a single department committed to leading the fight against the recession and fostering the conditions for future prosperity and growth, building on the work of the predecessor departments,” he said.

There is an even faster rate of progress in degree-level skills. The proportion of adults with level 4 qualifications could hit its target of 34 per cent in 2010 - a year early - if progress is maintained. And the higher education participation rate is running a year ahead of schedule at 43 per cent in 200708.

FE Focus revealed last week that the funding gap between universities and colleges is widening, with FE falling back to its 2005 level while universities enjoy increases. This raises fears that progress on lower- level skills might stall.

BIS also said it had made strong progress in strengthening the capacity, quality and reputation of the FE system, despite a series of funding crises this year.

A capability review of the former Department for Innovation, Universities and Skills found that it was not distracted by setting up a new department. But the internal reorganisation was later blamed for an apparent lack of oversight of the Learning and Skills Council’s capital spending.