A widespread outcry after the Department for Education attempted to conclude its review of the National Youth Agency with a consultation period of less than two months on a highly controversial report appear to have led to a softening of attitudes.

The report - widely read as an attempt by the DFE to rid itself of an uncomfortably outspoken quango - recommended an almost complete dismembering of the organisation.

It suggested that the NYA should lose its quango status with the DFE continuing to directly fund only its widely-praised publications and information service. Training functions 10 would disappear no later than next March, while the two options for the future of the rest of the agency were to fund it through Grants for Education and Training or a top-slicing of the total local authority pot. Neither option was particularly palatable to the local authorities.

At a meeting with representatives of the local authority associations last week, junior education minister Tim Boswell agreed that training functions should not be stripped from the NYA as swiftly as had been planned, and that no changes would be made until anew accreditation system was in place.

He suggested that Pounds 600,000-700,000 might be available for local authorities to run the rump of the NYA through a top-sliced total budget, and appeared to accept their refusal to countenance funding any future NYA through GEST, which would have required them to find 40 per cent of running costs at a time of financial hardship.

The speed of the consultation exercise had been blamed on the necessity to fit in with the GEST timetable. With that option apparently set aside, the local authorities are hoping that the review will now be conducted at a more considered pace, allowing careful discussion of all the options.

Saxon Spence, chairman of the Council of Local Education Authorities, said there would be a great deal of consultation and discussion to be done, but added: “It could be a reasonable way forward.”

Graham Lane, education chairman of the Association of Metropolitan Authorities, said the DFE’s proposals were “fascinating” but believed that a new status for the NYA might free it for more of an advocacy role.

An initial response to Mr Boswell before the end of next week from the four local authority associations is likely to restate their basic position that the NYA has only been in operation for three years and should be given more time to develop. It may also reiterate opposition to GEST funding and reservations about the DFE’s desire to introduce National Vocational Qualifications as a route for training for all youth workers, regardless of seniority.

At present training schemes are accredited and professionally endorsed by a system of national and local bodies which include representatives of both the employers and the unions.

Although it is possible that the local authority associations may be persuaded that the top-slicing option is one they could live with, it could prove difficult to sell that idea to individual councils, particularly at a time when unitary authorities are being introduced. At the very least, they would be likely to press for a promise that the Pounds 600,000-Pounds 700,000 indicated by Mr Boswell would be provided by the Department of the Environment for the foreseeable future and that the money might be ring-fenced.

There is also some cynicism within the local authorities over Mr Boswell’s rationale for the review: that floating off the NYA will increase its freedom of speech. The intention to retain the publications and information arm could stifle any such advantages, they say.