Mr Reilly will chair a new training standards council, heading a team of 400 part-time inspectors to scrutinise the work of the 79 training and enterprise councils.
The creation of the new council follows repeated criticisms of standards and allegations of financial mismanagement of parts of the Pounds 1.4 million spent annually on workplace training, with inefficient use of public funds.
The TECs were recently criticised by the Government when the Public Accounts Committee accused them of "incorrect payments" of Pounds 8.6m to training providers in 1995-96.
However, most of the criticisms have been aimed not at the TECs but at the private training providers recruited with public money by the councils. The quality of many national vocational qualifications awarded through TEC-sponsored work-based training was often criticised. Standards were attacked for not being on a par with other education and training options.
Criticisms reached such a pitch that it was widely expected before the general election, despite official denials, that the new Labour Government would wind up the TECs.
But education and employment minister Kim Howells, confirming Mr Reilly's appointment this week, said that "TECs are here to stay". However, he said there would be no let-up in the efficiency drives introduced by the last government. "We are not in the business of wallpapering TEC offices or anyone else with pound notes," he said.
"The council, which will begin inspecting the 5,000 training providers in England from April 1 next year, will mean individuals have more and improved information available to them, plus the opportunity to make well-informed choices," he said.
The appointment of Mr Reilly has been welcomed by the TEC National Council. The setting-up of the standards council was done with the support of the TECs. The inspection model follows closely that recommended by national policy director Chris Humphries.
Chris Evans, TEC National Council director of communications, said: "We believe that this development will further boost public confidence in the opportunities afforded by work-based training as well as demonstrating parity of esteem of the work-based route."