Ministers to resurrect the FEFC
The coalition Government is set to go ahead with plans to create a single FE funding body that aims to simplify the system and give colleges more freedom.
Colleges and training providers have been promised consultation on the new system, but FE Focus understands that the Government is likely to recreate a Further Education Funding Council (FEFC).
The Conservatives in opposition had already consulted on a resurrection of the FEFC, but the Liberal Democrats favoured merging adult skills with university funding to create a Council for Adult Skills and Higher Education.
A Department for Business spokesman said: "The sector has told us it would like to see a single, unified budget for colleges and training organisations, within a single planning, monitoring and audit framework.
"The Government is exploring options for simplifying the landscape and giving colleges greater freedom including those which might require legislation."
Any change to the FE funding system is likely to be carried out through the Public Bodies (Reform) Bill, announced in the Queen's Speech, which aims to save pound;1 billion a year by reducing the number of quangos across Government.
Ministers also announced that pound;200 million would be diverted from the Train to Gain budget, with pound;150 million spent on 50,000 new apprenticeship places and pound;50 million on capital funding.
Colleges were largely relieved that they had been spared additional cuts, after an election campaign in which the parties refused to guarantee that FE spending would be preserved.
Martin Doel, chief executive of the Association of Colleges, said: "We are very pleased that the Treasury announcement identifies college provision as one of the few areas where savings are being re-invested."
But he said there were concerns that the valuable work of Train to Gain would be lost in the haste to eliminate the "deadweight" waste it had been criticised for.
"Many colleges have pointed to weaknesses within the Train to Gain scheme," he said. "However, there are some elements worth preserving - in particular the positive contribution to basic skills education that Train to Gain courses have made - that haven't been addressed in today's announcement."
Kevin Brennan, the shadow FE minister, said the Government was on course to scrap the scheme. "Many businesses simply do not have the resources to invest in training and qualifications for their staff and this is where Train to Gain has had such a positive impact," he said.
New apprenticeship places are expected to be largely taken up by adults, as the 16-19 budget is already underspent because businesses are reluctant to create new jobs for teenagers.