New Labour came to power almost 10 years ago promising radical reform in education based on greater choice, specialisation and collaboration. Funds would be targeted where they were most needed.

But new research suggests that the result of the education experiment post-16 has led to anything but radical change. Instead, it looks as if segregation is growing on lines of attainment, social class and race. The poor are getting the smallest share of the bigger cake.

Work by Geoff Stanton, of the University of Greenwich, and Mick Fletcher, a consultant and former researcher for the Learning and Skills Development Agency, paints a disturbing picture. Specialisation is not working, they say. The greater the choice of institution, the less the choice of subject for individuals.

They warn that with the weakly collaborative arrangements shaping tertiary education, there is little hope of guaranteeing access to the full range of 14 to 19 diplomas that come on stream in 2008. Worse, even if the full range were on offer, the existence of elitist A-levels alongside the diplomas will create a two-tier system akin to grammar schools and secondary moderns.

Stanton and Fletcher have carried out a detailed re-analysis of existing data and new research by the National Foundation for Educational Research.

They looked at the impact different types of institution - school sixth form, sixth-form college and general FE - have on student achievement.

They found little evidence that different types of institution had any significant impact on staying-on rates. “On the other hand, there is worrying evidence that they produce social segregation and inequality,”

they say.

Specialisation failed to achieve any economies of scale and the obsession with A-levels and exams diverted limited cash from the least able and lowest attaining students. Education reflects the wider economy in that everyone is doing better and getting more, but the gulf between the rich and poor is growing at an alarming rate.

Other research referred to in Stanton and Fletcher’s report 14-19 Institutional Arrangements in England shows how the middle classes work the system to their advantage. They point to a forthcoming report from University College London which warns, “by giving schools more independence and creating a market, you run the serious risk of polarising pupils along class lines”.

This will not be news to the Government. A little-aired recent Department for Education and Skills report on social mobility pointed to the fact that gains made through early intervention programmes fade rapidly when support is removed. It concluded that greater investment was needed, targeted to narrow the gap.

Stanton and Fletcher also concluded, “almost all the apparent difference in the performance of different learners in different institutions can be explained in terms of their prior attainment and social class”.

Social class also determined which type of institution students chose.

School sixth-form participation was heavily skewed in favour of the best GCSE scores and higher social classes, leaving colleges to take the rest.

The Government’s failure to close the funding gap between schools and colleges has reinforced the social divide in favour of the middle classes.

Over two successive years, statisticians at the Learning and Skills Development Agency showed that full-time A-level-equivalent studies received higher funds than level 2 (GCSE-equivalent) programmes, which in turn received more than level 1. Analysts at the Learning and Skills Council confirmed these findings.

Further evidence of the system working against the most disadvantaged comes from an analysis of teaching hours: A-level students get 10 per cent more time than level 2 students who get 6 per cent more than those on level 1 courses.

A major cause of this discrepancy appears to be the curriculum, say Stanton and Fletcher. Lower level programmes have fewer taught hours “and the nature of A-levels, combined with a funding system that funds qualifications, means that the most able students, who can undertake the biggest programmes, attract the most resources.”

Ironically, it was the drive for greater efficiency at all costs though the early 1990s that shifted the emphasis in colleges, but not in schools, to more guided self-study and less teaching. But the cash saved was not reinvested - instead itt was cut from budgets.

“It looks as if there is a clear correlation not just between levels of funding and prior attainment but also between social class and levels of funding”, with those with least political clout segregated into a “ghetto”, they say.

This bodes ill for the new diplomas, they add.

Independent schools say they are unlikely to offer the diplomas alongside A-levels, and Stanton and Fletcher say it is difficult to see what would motivate school sixth forms to do so unless they had appropriate facilities and staff.

Then there is the question of what status the diplomas will confer. The present position is that academic qualifications attract much better salaries.

As for diplomas at levels 1 and 2, school sixth forms and sixth-form colleges do not cater for students who failed to get at least five good GCSEs. Colleges do provide them, thus reinforcing two distinct classes of 16 to 18 provider.

Some of the arguments used by Government to justify a choice relate to the apparently poor performance of general FE colleges compared with alternatives, the added value of smaller institutions and advantages of specialisation. But Stanton and Fletcher argue that these claims do not stand up to close scrutiny.

First, after looking again at the raw data, they say variations in performance can be explained by the nature of qualifications taken and what students have achieved before they arrive.

Second there are important economies of scale. Their analysis suggests the cost of providing for 200 learners is 59 per cent higher than for 1,000. A sixth form with 100 A-level students costs 94 per cent more than one with 300. But the Government persists in supporting small sixth forms to maintain choice despite overwhelming evidence of the damage done to the majority of students.

Third, specialisation will only be an advantage if every student can take their diploma of choice. They say: “The only practicable way of reducing the size of the consortium to a manageable level and still offer the full entitlement would be to run the less popular elements at a substantial loss and cross-subsidise them.”

They conclude: “Taken together with the emerging evidence on the benefits of scale, it suggests that a managed tertiary system offers the best prospect of both quality and equity in 14 to 19 provision.”