An end to all circulars was the optimistic cry of the Learning and Skills Council this week as it announced a new, slimmed-down funding and planning regime.

As the pound;8 billion quango celebrated its third birthday, it rolled out plans for a single, simple annual framework to replace separate systems for planning, funding and raising standards.

The aim is to provide a better match of available courses to students; a demand-led system that says to employers “what do you need?” rather than “what you can have”, less bureaucracy for colleges with more time for teaching and better value for money for the taxpayer.

According to Rob Wye, former executive director for the East Midlands but now director of the LSC’s chief executive’s division: “I used to compare it with being in the trenches in the first World War, with bombs being thrown by ministers or the national office, but no pattern.”

The new business cycle will begin with an autumn strategic review; key partners, providers, sector skills councils, regional development agencies will work together to produce a statement of national and regional priorities.

At the beginning of the year local LSCs will review the past performance of providers and current forecasts. Colleges were previously put into one of five categories, ranging from excellent to serious concern. In future there will only be a top, middle and bottom.

“We spent ages deciding on the boundaries in the past,” said Mr Wye.

“Categorisation is not the point. We want a proper dialogue to agree with them a funding allocation.”

In January or February colleges and providers will tell their local LSC how they are going to use their allocations. And if things are not working out they will be asked to return money.

“It is not in a college’s interest to buck the system,” said Mr Hughes.

“And over-performance means extra money.”

“What is important is that there is dialogue and negotiation about re-direction, if necessary,” said Mr Wye.

There would be a three-year rolling plan. “But it is not Stalinist, it is not manpower planning. We are not telling them what to deliver.” Though he added that in the “worst cases, with some work-based learners, it will be ‘on your bike’”.

In March, local plans will be negotiated with regional directors and presented to the national council. This happened for the first time last week. David Hughes, regional director for the East Midlands, is piloting the new framework.

“We told the national council what our plans looked like, what challenges there were in our particular area. We had to show we were on top of what is going on.”

The national council will hear presentations from the nine regions, instead of looking at plans from the 47 local LSCs, “which it was impossible for the council to cope with,” said Mr Hughes.

“There is a challenge in all of this, it is called management,” he said.

The new cycle will start throughout the country in autumn 2004.