DAVID BLUNKETT could release pound;100 million cash for post-school education and training by slashing unnecessary bureaucracy, college leaders insist.
The Education and Employment Secretary has already pledged to cut administrative costs by pound;50m when he creates the new Learning and Skills Council for England in 2001. But the Association of Colleges says he should be tougher.
The cash will come from the abolition of the Further Education Funding Council and the training and enterprise councils. Their work will be taken over by the new body, with much lower running costs.
Last year, FEFC running costs were pound;24m - 1 per cent of its budget. TECs spent pound;135m on administration - between 6 and 35 per cent of budgets.
Mr Blunkett attacked the costly TEC bureaucracy when he launched the post-16 White Paper, Learning to Succeed, in June. He described it as: "A Soviet-style wholesale distribution network where contractors take a cut at each stage before learners actually get the resources to do the job."
Colleges will be expecting Mr Blunkett to spell out how the cash can be spent more efficiently when he addresses the AOC annual conference in Harrogate next month.
John Brennan, the association's director of development, says that if pound;50m was cut from the total pound;159m administration bill, it would still leave more than pound;100m, or around 2 per cent of turnover.
"We would be sceptical over any claim that you need to spend three or four times as much on administering a budget which is only going to be at most about 50 per cent higher," he says.
The association is concerned that the effect of high spending would be to create massive bureaucracies nationally and locally. Up to 50 local learning and skills councils are planned.
"This (bureaucracy) would just stifle the system and generate more impetus for control and less freedom for institutions to respond to their local markets and meet community needs," says Dr Brennan.
There is also concern in colleges about the relationship between the new council and the different kinds of public and private-sector bodies - from colleges to industry training bodies - that it will be funding.
If the council picks up the work of to ensuring " adequate and sufficient educational and training provision", what powers would it have to ensure that private providers do their fair share, asks the AOC.
Industry does not have the same mechanisms for keeping a record of student progress and achievement as the colleges with their Individual Student Records (ISRs).
One answer is to have funding incentives and common planning frameworks to ensure that all courses are provided in the same rational manner. But that would not solve all the problems, Dr Brennan insists.
"The council's sanction will probably be to withdraw contracts if it does not like the way any organisation is run. It is easy to say that the new council must deal even-handedly with all the bodies it funds, but it's harder to put it into practice."
Dr Brennan believes there should be a common audit and funding regime for both sectors. It should have common management information systems, regulatory frameworks and checks on probity. Agreed standards of governance and minimum standards of quality must also be guaranteed.
The White Paper also calls for a "national tariff" to set the price for all courses that the council funds. Colleges are keen on the idea, since it would replace the existing complex funding schemes.
But they are less enthusiastic about plans to delegate discretionary funding powers to the 50 local skills councils.
"We would want that power very strictly controlled and the funding rules to be totally transparent," says Dr Brennan.
"Colleges have come from a local authority background where they saw councils manipulate funding to individual institutions in all sorts of ways that were unpredictable and totally opaque."
There is also some nervousness in colleges as to what kind of regulatory framework the Government intends to create for the new post-16 education and training sector. While colleges are waiting for the legislation, civil servants are busy devising plans which would claw back much of their independence and autonomy.
The colleges want more room for manoeuvre in the new structure. While nothing has been done to change their formal status as independent incorporated bodies, the framework can clearly limit their independence, he said.
The White Paper says little about what powers the new super-quango will have. "There are fears that it might end up dictating everything and re-creating the old LEA-type system where colleges were totally controlled in every aspect of what they did."
Reform should not be about increasing central control, he says."It is about striking the right balance between the freedom to set your own mission against a framework which exemplifies national priorities and sets standards for accountability and probity."
The Government is to set up two statutory committees - one on young people and one on adult learning - to influence council policies on these areas of education and training.
Dr Brennan has concerns here, too. To what extent will these be just advisory bodies? How much real power will they actually have?
It would also be all too easy to create two completely different systems, one for 16 to 19-year-olds and the other for adult learners. Were this to happen, it would lead to all sorts of anomalies because colleges have students from both categories under the same roof.
"For the vast majority of FE colleges whose student cohort spans that age divide," he says, "it is very important that you have a system that is coherent and consistent."