And more than pound;250 million could be saved by reorganising sixth-form studies so that schools are made to run as efficiently as FE colleges, according to a 157 Group policy paper launched at this week's Association of Colleges conference.
The paper, "Protecting services to students by targeting cuts and embracing efficiency", also calls for a rethink of the "elaborate consortium" arrangements for delivering the new 14-19 Diplomas. The group believes Diplomas are best delivered by colleges and that partnerships with schools should only be allowed where they add real value.
Expenditure by the FE intermediary bodies, including quangos, amounts to just over pound;705 million, the paper argues. It says that by reducing the costs of bodies such as Becta, the Government's information technology body, and the Learning and Skills Improvement Agency by 25 per cent would yield a saving of pound;175 million a year.
"It should be emphasised that these reductions are most unlikely to affect the experience of students adversely or reduce the capacity of colleges to respond to the needs of employers," according to the paper, much of which was written by education consultant Mick Fletcher.
"In the longer term, we should aspire to reduce overhead costs towards the level found in HE."
Particular attention is focused on the pound;200 million administrative costs of the Learning and Skills Council (LSC) and its successor bodies, the Skills Funding Agency (SFA) and the Young People's Learning Agency (YPLA). It argues that the administrative spending of the SFA and YPLA could be reduced to the level of the former Further Education Funding Council (FEFC).
Graham Holley, immediate past chairman of the 157 Group who commissioned the paper, said: "The real problem seems to be with the SFA. The argument is that we must put some of the onus and responsibility back down the ladder to allow the sector to manage its affairs in a collaborative fashion. If you do that you get rid of a lot of the complexity of the SFA."
The paper also argues that economies of scale can be delivered by colleges in delivering sixth-form studies.
"The total sum spent on school sixth forms is over pound;2bn per year. To increase efficiency simply by reducing LSC funding rates to the level of FE (a 4 per cent cut) would therefore save around pound;80 million," it says.
"To achieve true parity of funding, however, would mean increasing schools' efficiency by up to 14 per cent, resulting in a saving of well in excess of pound;250 million per year."
It calls for an end to the "anomaly" of pupils being taught in sixth-form classes that are far smaller than those almost anywhere else in education.
Mr Fletcher said: "If you compare the expenditure on higher education overheads, it is about a tenth of the overheads that the LSC carries.
"We have a world-class university system that has none of this apparatus, so arguably if we want a world-class skills system then we should go the same way."