Every new policy affecting colleges must be scrutinised to prevent further growth in the already intolerable mountain of red tape and paperwork, the bureaucracy task force says in a report to be published next week.
The task force calls for a string of reforms even more radical than those set out in its interim report last autumn.
Proposed changes include the creation of one inspectorate for colleges, a bureaucracy "risk assessment" of all proposed policy changes, and regulations to stop exam boards making time-wasting demands on colleges.
Sir George Sweeney, chair of the task force, points to considerable steps already achieved in cutting red tape. They include cuts in the volume of data colleges must collect for the Learning and Skills Council and an end to swingeing penalties on colleges that miss student recruitment targets.
A permanent bureaucracy review group under Sir Andrew Foster was created earlier this year, and "lighter-touch" auditing schemes are now in place in 117 colleges. In addition, "test-bed" colleges in Sussex, Greater Manchester, Birmingham and Solihull were selected to fast-track proposals in the Government's post-16 strategy paper Success for All.
But Sir George warns that the really big changes cannot be completed for some time. "Yes, there is more to do. Yes, some of the impact of implementing the task force's recommendations will not be felt for a couple of years, but the tide is turning."
Indeed, those involving post-16 qualification reforms may not be possible until 2009.
The 40-page document, Building trust: a bureaucracy task force report, is to be published at the Association of Colleges' annual conference in Birmingham.
The interim report made 39 bureaucracy-cutting recommendations, covering 13 areas of college work, for change to be carried out in the short, medium and long term, aimed at creating simpler and more predictable ways of funding colleges, reducing the burden of data collection and, most crucially, changing the culture and relationships between providers and the LSC.
Both the Government and the LSC agreed to all 39 recommendations and set out a plan of action - in the report Trust in FE - to tackle the poor relationship between the colleges and the council.
Specific areas of progress highlighted in the report include the streamlining and consolidation of the standards fund, a cut in the number of performance reviews to two a year and lessening of the "clawback" penalties for colleges that miss targets. Reforms to simplify the bidding system for European social fund cash had released an extra pound;200 million to help the disadvantaged.
But the report points to a continuing level of suspicion and cynicism over the measures being taken. Every recommendation has been tackled to some extent "and many, including some of the most challenging ones, have been met in full", the task force says.
"However, the perception in the field, in the colleges or in the local LSCs, is that bureaucracy has not greatly diminished and for some there is a sense of things having got worse rather than better in the past 12 months."
Anecdotal evidence suggests that "trust" is improving. Local LSC staff are seen as "helpful and responsive". However, colleges often also see them as lacking a real understanding of the sector. Working relationships with the LSC are reported as "good or very good" but still lacking in "openness and transparency".
People said collaboration with the LSC is better than it used to be with the Further Education Funding Council. But, "very few seem to believe that the LSC had reduced bureaucracy, although many felt it would - the greatest cynicism being found within the FE sector". In Hampshire and the Isle of Wight most providers felt relations with the LSC were "good or very good".
Around half thought things had improved but one in five thought things had deteriorated.
Sir George is not surprised by the results and argues that with such a challenging agenda there is bound to be a time lag in changing perceptions.
"What is clear is that the 'trust agenda' has struck a chord; while doubts remain, the determination to shift from micro-management to collaborative planning has generated widespread support."
But there are limits to what the LSC and colleges can achieve between them without wider national strategies, the report warns. "It is clear that the cultural transformation recommended by the bureaucracy task force is a long way from being achieved. There is commitment from providers and many LSC staff but more needs to be done at national and local levels to clarify and attain this objective."
Funding reforms are likely to take the longest, the report says. It became clear when the task force was set up two years ago - in response to the FE FocusAoC "Cut red tape in colleges" campaign - that over-hasty reforms would destabilise colleges.
An advisory group, including principals and senior managers was set up to create a "plan-led rather than formula-driven" approach. It agreed that all recommendations must give transparent and more predictable funding changes and limit all demands for information to what an effective college needs to manage itself.
Recent efforts to simplify information-gathering about qualifications illustrates the need to tread cautiously and to consult, the report says.
Initial feedback from colleges suggested far too much data was required.
But, when the LSC agreed to cut 8,000 records from the database, there were protests from a few colleges who said they still needed them.
As a result, the LSC suspended this plan. It stood back, consulted the advisory group and recommended changes. These changes were well received by colleges, perhaps not least because they illustrate the willingness to consult," says the task force report.
The report includes a 13-page guide to progress and work in hand on all task-force recommendations. It spells out the problems, steps being taken to overcome them and the impact each has had on cutting bureaucracy.