The redundancy bill for the previous 800 jobs which were cut 18 months ago was around pound;50m. There have also been numerous warnings about tight spending over the next three years. And apprenticeships - the Government's flagship vocational scheme - must be funded.
The success of the apprenticeships has proved to be an embarrassment for LSC managers and ministers who failed to predict their popularity and ran out of cash, leaving the training provider pound;100m in the red. After some manoeuvring and borrowing from future budgets, this dropped to around Pounds 25m. However, as we report on page 3, the Association of Learning Providers is seething over suggestions that its members foot the bill and is suing the LSC.
Fortunately, these are one-off problems. The long-term savings from LSC job cuts will, or at least should, feed through to meet the needs of students and apprentices.
Some doubt whether this will happen. Trade unions defending jobs say this is a cut too far, and some LSC leaders remain unconvinced that the senior management team has thought through the business demands. If not, then the ubiquitous consultant will have to be wheeled in to fill the gaps. As numerous quangos of old have found, they come at a price.
Nevertheless, the blueprint for LSC reform is right. There is too much bureaucracy generated by an over-complicated, multi-layered organisation.
But it was the Government's complex targets and quality controls that created much of the workload.
Unfortunately, as the LSC pulls back from detailed management, there are other organisations hoping to keep a keen eye on quality. At what price?
The department for Education and Skills Post-16 Standards Unit grew alongside the LSC. The new Quality Improvement Agency and Learning and Skills Network were born from the Learning and Skills Development Agency.
Will this really be a bargain, two for the price of one?
A lesson about keeping such costs down must be learned. The alternative - as two rounds of council staff cuts have shown - is ever higher costs and redundancy bills.