When Bryan Sanderson became chairman of the Learning and Skills Council in 2000 there were a “nightmare” 42 different funding streams for colleges from the Government.

“It was a hanging crime to overspend on any one of these accounts. Nor could you transfer money from one to another.” With such a complex business - that no private company would tolerate - “you were guaranteed to underspend”, he says.

“It became an apple barrel with ministers half way through the year asking what has underspent and what can we pick out of it for other initiatives? It was very frustrating.

“There are now about half a dozen funding streams,” he says, reflecting on the changes over his four years in office. “That has to be an improvement.”

Mr Sanderson, 64, is obviously delighted too with the recent three-year pound;130million boost to budgets, announced by Charles Clarke, the Education Secretary, last week.

“It has taken away much of the residual flexibility of the Department (for Education and Skills) in order to support learning and skills and you have to give them credit,” says Mr Sanderson It also taken away the scope for all those bright ideas from central government, a change that many in colleges will greet with relief.

“Ministers will be hard-pressed to find money for new initiatives now,” he says.

Cynics will say that these cash pressures - rather than generosity of spirit - have prompted Mr Clarke to reduce accountability and planning requirements, levels of scrutiny and the number of initiatives. Whether this is the case or not, Mr Sanderson buys into the radical agenda and into Mr Clarke’s call for employers to stump-up a bigger proportion of cash for skills and adult learning.

The Secretary of State, announcing his plans at the Learning and Skills Development Agency summer conference, described it as “a historic shift in expectations in who pays for what”.

However, Mr Sanderson insists business will only pay-up if - and it is a big if - the Government puts its house in order. As reported in FE Focus last week he sees the civil service as “over-staffed, over-resourced and under-efficient”. He has called for a cull of 110,000 staff, with the cash ploughed back into front-line services.

“I have trouble as a businessman with this state of affairs,” he says.

“They have added 60,000 posts since Labour came to power but hardly anyone has gone.” Thousands of jobs remain which could be done using IT, he insists. Tens of thousands of lower-grade jobs could go, with commensurate cuts at all levels.

Why is this such a crunch issue? “Because civil servants do not have enough work so they invent things.” Much of the bureaucratic burden on colleges arose because the civil service was over-staffed.

Despite the unions crying foul and threatening action over cuts already agreed, and to be phased in over three years, Mr Sanderson says these do not go far or fast enough. They would simply create uncertainty, which is “the enemy of efficiency”.

So, as he steps down as LSC chairman, what does the entrepreneur who helped turn the oil giant BP from failure to success think was achieved over the past four years and where does the LSC go from here?

He believes the LSC is emerging as a highly effective machine. “The top team is pretty good, there are excellent executives around the country, we have top-rate managers and a first-class national council.”

But what has been the impact on the wider public? “If I am honest, we have not raised the profile of learning and skills sufficiently. There is some movement but we are not moving fast enough in some areas, adult education for example. I still have a problem explaining FE to nine out of ten businessmen.

“But we have created a very efficient organisation under two chief executives - both with particularly difficult challenges. Remember that the LSC started on the back foot, having been blamed for scrapping the TECs (training and enterprise councils) when that was actually done by the Government.

“They should not have got rid of the TECs but absorbed them. After all, they were a way of getting business people on board.”

For the LSC and sector as a whole to perform effectively, he says, government has to get off its back. “There is a case for a measured view of the LSC and its future, a close and detailed look by a cross-party parliamentary body. But it would be disastrous if it went on the party-political agenda.”

Mr Sanderson insists that for the sake of stability and progress there is an urgent need to remove key decision-making from the political arena.

“There is a need for a public service delivery mechanism that is not democratic. A lot of the skills agenda has a five to ten-year time span.

This work is not aided by people who are up for re-election every five years or junior ministers who last only 18 months. There is a need for someone who has respect across the political spectrum. The LSC is the model for achieving that.”

With so many irons in the fire - chair of BUPA, vice chair of governors at the London School of Economics and chair of Sunderland Football Club - will he bow out of FE and leave this agenda to others?

“I intend to do something in FE. I have had some approaches but have not yet decided what to do,” he says.

There are several possibilities: the employer engagement, promoting the role of the voluntary sector and charities. “I have hugely enjoyed my work with the LSC, it has been immensely worthwhile.”