Plans for a single further education funding body have not been abandoned, FE minister John Hayes promised as he launched a pair of consultations on FE funding and the future of skills.
Despite announcing that the Young People's Learning Agency (YPLA) would take direct control of funding 16-19 education, Mr Hayes said that pre- election plans to revive the Further Education Funding Council, scrapped by Labour in 2001, were still being pursued.
He explained that the delay in fulfilling the plans is owing to the fact that merging the YPLA with the Skills Funding Agency (SFA) would require new legislation.
Mr Hayes said: "It hasn't been kicked into the long grass, but we need to move forward in a way that's practical, with what we can do without legislation. We want to create a simple funding mechanism. It's a continuing discussion."
Mr Hayes unveiled the consultations while speaking at the College of Enfield, Haringey and North East London.
The consultation on funding contains a number of proposals, such as scrapping Labour's entitlements to a free first Level 2 and 3 qualification, instead mooting reductions in fees for priority courses or a "learner premium" to boost funding for needy groups such as the unemployed.
Adult safeguarded learning could also be under threat. The scheme guarantees over pound;200 million a year for courses that are not deemed to be a priority, but which many argue attract people back into education.
The funding consultation raises the possibility of adopting the "co- funding" model, proposed by the former Learning and Skills Council chairman Chris Banks, where public funding would follow individual and employer investment.
Martin Doel, chief executive of the Association of Colleges, said: "We share the ambition to increase private and employer investment in skills and vocational education."
The review also seeks to reduce the administrative burden by limiting contracts with the SFA to larger organisations. Today, about 550 providers are responsible for 92 per cent of learners, while more than 700 small providers carry out the rest.
Under the proposals, providers would be restricted to subcontracting from larger providers - although the department concedes that this can lead to money being siphoned off in administrative fees.
Providers would gain greater freedom in their budgets, receiving a single fund for all adult learning that they could spend as they saw fit, rather than multiple budget lines for different programmes. In return, the Government intends to demand greater transparency.
The review of skills restates the coalition's emphasis on apprenticeships, adding that addressing concerns about progression routes is a priority. It is looking for ways for Level 3 apprentices to progress to degree-level courses.
Mr Hayes said: "Since the election, I've noticed two contrasting attitudes to the future of further education - indeed, the future of public services in general.
"On one side are those who wring their hands and wait for the axe to fall. But other people, and I count myself among them, see not impending disaster, but a once in a generation chance for radical reform.
"The important thing is not that further education should become ever richer, but that it should become ever better. Spending more isn't essential if you are prepared to spend more wisely."