LSC one of many bodies to face scrutiny over future after pound;7 billion is cut from its budget. Ministers are planning a major review of the future of the FE funding body after Gordon Brown's Government reforms slashed pound;7 billion from its budget.
The Learning and Skills Council is one of the quangos whose future is up for debate in a rethink of the institutions overseeing further education, to begin next month.
Ministers are first expected to outline general principles and objectives for the reforms and seek views from people working in FE.
Then in January firm proposals are due to go out for detailed consultation.
As well as the LSC, the review's scope is due to encompass other quangos, such as the Quality Improvement Agency and the Centre for Excellence in Leadership, following repeated calls for a simplification of the system. It is also intended to look at the employer-led Sector Skills Councils, which were recommended for a role in determining which qualifications should receive public funding by Lord Leitch in his report on skills last year.
No changes to the LSC would be expected to take place until 2010 or 2011, after the completion of the transfer of nearly two-thirds of its budget to local authorities for the education of 16- to 19-year-olds, assuming legislation is passed.
Detailed options are only likely to be revealed after the first stage of consultation, but FE Focus understands that among those which have been discussed are mergers with JobCentre Plus or Hefce, the higher education funding body.
The Association of Learning Providers, which represents private training firms with contracts at both the LSC and JobCentre Plus, will call for a merger of the two bodies at their autumn conference next week.
Graham Hoyle, chief executive of ALP, said: "There seems a real possibility that the combining of these funds could happen in a couple of years.
"The important thing is that these complementary funding blocks are brought together in a flexible yet coherent way."
Other possibilities include handing adult education funding to Regional Development Agencies, or maintaining the status quo, which would leave a smaller LSC in charge of about pound;4 billion of post-19 funding.
Sue Dutton, acting chief executive of the Association of Colleges, said: "This is a great opportunity to rethink the architecture surrounding FE administration in order to achieve radical progress in the simplification and deregulation of the system."
Rob Wye, director of strategy and communications at the LSC, declined to comment on specific alternatives for reform.
He defended the LSC's record but said the priority was for the benefits to students and employers to continue, whatever organisation was responsible for the funding of post-19. Mr Wye said: "The concern about any change is that you disrupt delivery while you are making the change and you want that to be avoided.
"The important thing is that the work continues. Things are changing continuously.
"You've got the example of the QCA a few weeks ago. Changes will happen, but it's important that the work continues for the benefit of learners and employers."