BILLIONS OF pounds in funding for colleges is due to be taken from the Learning and Skills Council and put under the control of local authorities. The handover of about pound;7 billion of the LSC's pound;11bn-a-year budget will be the culmination of Gordon Brown's reorganisation of education.
On Monday, two new Government departments were created as the new Prime Minister reshuffled his cabinet. All education for under-19s, except for apprentices, will be overseen by the Department for Children, Schools and Families, run by Mr Brown's former aide Ed Balls. The reform of the curriculum for 14- to 19-year-olds will be led by this department, which will also be responsible for increasing the number of teenagers staying in education.
Adult education and work-based learning, including all apprenticeships, will be under the remit of the Department for Innovation, Universities and Skills, headed by John Denham. This provision will continue to be funded by the LSC.
"The important thing is the departments are going to work very closely together," a Dius spokesman said.
The efforts of the Dius to improve the nation's skills will be scrutinised by a new Business Council for Britain, consisting of business leaders such as Sir Richard Branson and Sir Alan Sugar.
As part of Mr Brown's efforts to create a "government of the talents", the former skills envoy Sir Digby Jones will be made a member of the House of Lords and appointed to a ministerial role with a remit across business and the foreign office.
Rob Wye, the LSC's director of strategy and communications, said the transfer of its budget for 16- to 19-year-olds would require new legislation and could only be completed by 2009 at the earliest. He rejected suggestions that slashing the budget by nearly two thirds amounted to a criticism of the FE funding body.
He said: "It's just saying we have got these challenges for the future, and we need a different way of achieving them. If you think about it, the opportunity for education and skills to have two seats at the cabinet table is great."
The LSC has already undergone several reorganisations and the loss of about 2,300 staff since it was formed in 2001.
It is not clear what will happen to proposals to give the council new powers to tackle failing or coasting colleges in the further education bill currently passing through Parliament. But Mr Wye said these proposals could still be enacted, because the Dius will have overall responsibility for FE, even if it does not fund all of it. "If they continue to use the LSC as their vehicle, it makes sense for these powers to be given to the LSC," he said.
John Brennan, the chief executive of the Association of Colleges, said it would be an uncertain time for some colleges which would find their work being overseen by two separate departments.
But he said he did not foresee any problems in the association having its attention split between two departments, as in the past they have had to deal with the Department of Trade and Industry and the Home Office as well as the education department.
He said creating a unified system for under- 19s made sense, especially as the Government was proposing to raise the age limit of compulsory education and training. "It sees everything up to 19 as a complete entity," he said.
Reorganisation, TES pages 16-17