Michael Bichard, Permanent Secretary at the Department for Education and Employment, has been asked to get a report to the Prime Minister in mid-May. The review of post-16 education and training will take a "fundamental look at the funding and organisation of the structures that we currently have in place", according to documents seen by The TES.
With the ink barely dry on Labour's post-budget announcement of a "wider assessment" of the role of TECs - with a consultation deadline of the end of April - the Government is going ahead with a much bigger remit.
Senior officials from three departments, plus the Treasury, the Social Exclusion Unit and the Training Standards Council, will all be involved in the biggest change since the incorporation of colleges in 1993.
Under consideration is a single body, likely to be an executive agency, which would subsume the Further Education Funding Council, the training arm of the TECs, and the careers service.
The model will be Wales. The Welsh Office announced this week (see right) that there should be a new National Council for Education and Training to break down "the Berlin Wall" between education and training, and academic and vocational qualifications.
Significantly, the quinquennial review of the FEFC, while giving it a good report, concluded: "In the longer term the Government should consider the merits of creating an integrated system of funding in order to rationalise present arrangements."
The independent review, carried out according to guidelines on non-departmental public bodies, also says the Government should consider strengthening the funding council's powers of intervention into individual colleges.
It should also be able to make changes to the governing bodies of colleges. Regional committees should be given executive powers to deliver more effectively programmes aimed at meeting local needs. The council should also be able to allocate part of its non-core funding for regional purposes.
The review has been well received by ministers. All the suggested changes could be taken on board if a single body were to take over FEFC functions.
The Government is keen to give the regions more power and certainly finds the council's role too narrow. This is to some degree due to the legislation which brought the FEFC into existence.
The shake-up of the sector is designed to prevent duplication of services and eliminate waste, as well as to give the Government a firmer hold. The FEFC is seen as cheap to run, handling a budget of some pound;3 billion at an annual cost of around pound;22 million. On the other hand, TECs cost about pound;120 million to run, and hand out some pound;1 billion.