National Training Organisations are being seen as key players in ensuring the UK identifies and meets its skills needs.
The NTOs oversee training for the nation's crucial manufacturing and service industries, and set occupational standards. They will give advice to the local learning and skills councils, the regional development agencies and the Small Business Service.
But lifelong learning minister Malcolm Wicks has made it clear that the NTOs must improve and do more to promote the needs of the employers they represent.
He told the NTO national conference in London: "I do not believe that the improvement in skills which the nation needs can be achieved with an NTO network of the curent size.
"Nor do I believe that NTOs with limited resources and low levels of employer support are sustainable or can make an impact on skills. We all need to engage in some creative thinking about NTOs to see if the NTO network should become smaller and better focued, if we are to have employees equipped with necessary skills for the knowledge economy."
He said there would be a major consultation to produce a new blueprint for the network. "We must be honest about NTOs and honest with each other."
Mergers will be inevitable.
The organisations vary enormously in size, with 29 having fewer than 29 staff, and others more than 1,000.
It is a patchy stucture but government is still committed to it. There will be a "substantial" increase in funding in the near future, said Mr Wicks. But it will depend on the production of a new strategic framework for NTO network development.
David Blunkett, the Secretary of State for Education and Employment, has appointed three independent members to an advisory group to make recommendations on the future size of NTOs.
They are Llew Aviss, a former member of the National Skills Task Force, Jill Wilson, managing director of a group of small construction companies, and Jeannie Drake, a senior trade union official. They will look at the impact each NTO has made over the past three years.