Both are seeking closer links, more regional strategic planning, a more flexible “pick and mix” system of qualifications for work and progress to higher education, and Government pump-priming for individual learning accounts.

Roger Ward, chief executive of the Association of Colleges, said: “We will spell out a range of demands to the new education and employment ministers including a retention of the franchising schemes which have caused so much controversy. We were instrumental in setting up the franchising working party, and the report to ministers showed that it will continue to be extremely valuable, provided the regulations are tightened up to prevent double funding.” Both industry and colleges want a clearer definition of the circumstances under which state cash should be paid for training in the workplace and where the companies should foot the bill.

In reaching a clearer understanding of who funds what, both the employers and colleges want clear training incentives such as tax relief.

The Institute of Directors has emerged as the harshest critics of all over John Major’s administration. Tim Melville Ross, IoD director general, attacked the present A-level and GCSE system for “lack of rigour”.

Leaders of the CBI (below) say that urgent attention is still needed at the most basic primary level to prevent a litany of under-achievers arriving in FE and the workplace.

Mr Ward said: “The basic building blocks for improvement are in place. We must stick with the Target 2000 programme (the Government-backed initiative to improve standards of education and training throughout the workforce) and ensure that colleges are helped to play their full part.”

A report out this week, suggesting that the last government’s Project Work Programme is hindering training among the jobless, adds weight to the joint demands of industry and colleges for radical reforms of the welfare support system.

The study by the independent Unemployment Unit, says the bureaucratic demands on the unemployed under the Jobseekers Allowance are preventing them from gaining new qualifications. The schemes require claimants to attend interviews and take work offered to them, often in the voluntary sector, depending on the judgment of dole offices.

The report gives firm evidence to support strategic expansion of opportunities for training at college and in the workplace. It paints a damning picture of the reforms under Mr Major.

“The Government accepts that people want to study or train as a way of helping themselves back to work but performance targets provide employment service staff with a perverse incentive to use unpopular vacancies and contradictory rules to push people off courses and off benefit,” says the report.

Inconsistent operations from one area to another “cause frustration” and prevents colleges from being able to make any sensible planning or bids for funds to run courses for the unemployed, Paul Convery, the unit’s director, said.