The Education and Employment Secretary used the occasion to applaud John Major’s creation of one body to oversee training, curriculum and qualifications for 16 to 19-year-olds, which would “ensure better co-ordination of policies for education and training for the post-16s in further and higher education”.

The new department will, she said, “help our young people to make the right choice as they move through education and training towards work. I want it to help the growing numbers of young people staying on beyond 16 to cope with the bewildering range of academic and vocational options”.

The DFEE is to be structured around: key school issues, including organisation and funding; policies on employment, adult training and measures to help the long-term unemployed to find work; relations with the regions, including contracting arrangements with TECs, and the co-ordination of policies for education and training post-16.

“The merger of the two departments gives us a once-in-a-lifetime chance to harness the strengths of Britain’s deregulated, innovative industrial sector to the strengths of our education system. We now have the opportunity to offer young people education, training and jobs that fit together in a single seamless, progression,” she said.

Mrs Shephard suggested that in the past, the DFE had tended to ignore the ultimate job needs of most young people as they progressed through education, whereas the Department of Employment had been more interested in output than the means by which it was achieved. “Having one department, one Secretary of State and one strategy will enable us to make rapid progress,” she said.

James Paice, the new minister responsible for co-ordinating post-16 education and training, told the conference that TECs had overcome their teething troubles and were now well placed to take on their new responsibilities under the DFEE.

“Thankfully, many local authorities who initially viewed the development of TECs with scepticism are now beginning to recognise the great contribution that TECs are making,” he said.

Mrs Shephard has written to the TEC national council and other education bodies, outlining her plans and inviting their comments. Her claim that the departmental merger had received a “warm and widespread welcome” was borne out by the response of Chris Humphries, director of policy at the TEC national council.

He said: “We want to ensure that work is done to bring down the artificial barriers between vocational training and education. We have been keen for some years to see vocational training and education brought closer together. Everything depends on how they are integrated.”

But he was concerned about the structure of DFEE, which he described as “looking a little like two departments bolted together” and called for greater clarity about its objectives.

Ngaio Crequer, of the Association for Colleges, was more sceptical. “I don’t think they know where they are going at the moment. In principle, we are in favour of all post-16 education and training being brought together under one roof.

“But I’m concerned at the break-up between FE and HE - that seems a very unwise and unhelpful move. She (Mrs Shephard) has always told us that she puts further education high on the agenda but we will have to wait and see.”

The conference laid out plans for a long-term strategy to improve skills, with a target of lifting Britain from its current position of 18th to the top of the Organisation for Economic Co-operation and Development’s workforce skills league table within 25 years.

It also saw the publication of the TECs’ framework for local accountability, which will be submitted to the Nolan Committee, which is investigating standards in public life, and a report on successful strategies for manufacturing industry.