A voucher funding system for post-16 education and training to create a more student-led market is proposed in a Government-backed consultation paper published this week, writes Tony Tysome.

But the plan comes with a health warning it is beset with difficulties and could cost millions.

Students could be issued with "learning credits" as an education and training entitlement with a cash, course or attainment-based value. They would be distributed through a national scheme which allowed for some local variations in provision. But the purchasing power would be in the hands of students, who would decide where to "spend" credits, rather than funding being channelled directly to providers.

The final report of the Learning Credits Consultancy Study, produced by Coopers and Lybrand, suggests three possible types of credits - "cash based", which would entitle young people to buy learning provision up to the maximum cash value on the credit; "volume based", entitling the student to a pre-specified "volume" of provision (a new system would be needed to measure volume); or "attainment based", allowing students to achieve their target qualifications.

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The report says: "Replacing the existing sectoral funding regimes by a single funding regime covering all the sectors should facilitate choices with varying balances between the education and work-based elements; these would significantly broaden young people's post-16 choices and could prove attractive to them - thereby contributing to higher participation and increased motivation."

But it also acknowledges significant practical problems in introducing such a system including costs as high as Pounds 535 million a year. All young people would have to be guaranteed the offer of a "suitable" place on a course, there would have to be considerable improvement in careers guidance, and new criteria would have to be drawn up to determine eligible provision and providers.

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The paper suggests the system could be phased in, with either "real" pilots over two to three years or "paper" pilots exploring the implications through discussions with key players in selected areas.