Youth Credits are a halfway house to training vouchers and give school-leavers and employers greater say over where the cash is spent. They are expected to make colleges more responsive to market forces.
Their phased introduction involves a shift of budgets from the Further Education Funding Council to the Training and Enterprise Councils. But there was an outcry from college principals earlier this year when they claimed that they would lose up to Pounds 47 million.
While the FEFC insisted that it had handed the cash over to the Employment Department, many TECs insisted that none of it had appeared in their budgets. Cuts were threatened to students on courses, and colleges said thousands of newcomers would be turned away.
Further confusion arose from what appeared to be an official decision to stop the funding of all part-time courses for school-leavers through the FEFC, preventing colleges from giving extra basic skills training or meeting individual requests for courses in addition to those the TEC agreed to fund.
A top-level inquiry was launched by the FEFC, TEC national council, Department for Education and Employment Department in the spring to sort out the mess. Guidelines for colleges, TECs and the careers service were published this week.
The TECs will be responsible for authorising all individual training plans or apprenticeships for 16 to 18-year-old school-leavers. These will be carried out by a provider such as an employer or the careers service acting as the TEC agent.
Where colleges are providing education or training under those plans which the TEC cannot or has not agreed to fund, they can claim the cash from the FEFC. Reasons for the lack of TEC support must be given. Conditions are spelled out clearly in the new guidelines.
Strict measures will be taken to prevent "double-funding", a spokesman for the FEFC said. "If a trainee is doing a BTEC funded by the TEC, the college cannot then offer an NVQ programme which may be only slightly different and claim more money."
Michael Austin, chairman of the Association for Colleges and principal of Accrington and Rossendale Tertiary College, said: "I welcome these guidelines, but with caution." Colleges had welcomed this sort of move before from the FEFC with the new 16-hour rule for unemployed students, only to be disappointed in the detail, he added.
Other principals echoed this view and added that no amount of guidelines would satisfy them if the net result of Youth Credits was a cut in cash for courses.