Colleges could cut assessment costs by at least pound;500 million, and slash the time students take to complete vocational courses by two-thirds, using a new electronic assessment scheme.
Evidence from a Learning and Skills Council pilot study of computerised assessment shows that as much as pound;1 billion a year is being wasted on duplicated effort and paperwork associated with NVQs and related vocational courses.
The new, faster assessment methods used in the pilot are also reported to have resulted in a sharp increase in student staying-on and achievement rates.
Recording evidence on computers instead of bulky paper portfolios meant that assessors avoided time-wasting duplication and trainees were freed up to spend more time on the job.
While the full results of the study will not be available until August, it has already prompted Ken Boston, chief executive of the Qualifications and Curriculum Authority, to encourage wider uptake of "eportfolios".
"QCA sees itself as vigorously driving forward towards early achievement of this vision of electronic assessment," he said.
The pilot study has focused on NVQ trainees in health and social care, where the assessment burden is considerable. Instead of compiling paper portfolios, tutors, assessors and trainees were told to record everything electronically. They found they could record evidence of skills more accurately in the "eportfolios", which alerted them if they made duplicate or unnecessary entries.
Trainees in the trials took just seven instead of 18 to 24 months to complete their courses. The study also suggests this approach could be used for a wide range of training, from car maintenance to hairdressing.
Ian Collier, a care sector employee who took a management qualification in 2004 at Bournemouth Poole college, completed it in 10 months instead of the expected 18. "Going through this course at such a pace really helped me consolidate things I was learning as a new manager on the site," he said.
Shailja O'Leary, Mr Collier's tutor, said: "We have had managers who have gone through in record time. I had one who finished in four months, as opposed to nobody achieving in two years." Many students, she said, were now choosing the college because of its eportfolio system.
Bev George, a former assessor for Shropshire Social Services, achieved staying-on rates among care students of 90 per cent, compared with 60 per cent nationally, when she introduced the Paper-free eportfolios system.
"If you ask for a written testimony from a manager, you could be waiting till Christmas. Put a digital recorder under a manager's nose and say 'Can you explain what Madge did in her practice last week?' they can do it in five minutes," she said.
Only one in 10, or 200,000, FE students currently uses eportfolios, said Mike Dawe, senior online assessment manager at City Guilds. The awarding body wants to encourage more colleges to use electronic systems and is offering "a stamp of approval" to eportfolio providers such as QuickStep, Learning Assistant and OneFile.