Pilot schemes in selected schools will start next spring to test the new system, which could see nearly a 10th of funding for sixth-forms being linked to exam results.
The pilots, announced yesterday in a government White Paper on education and training for 14- to 19-year-olds, are the first stage of a drive by ministers to subject sixth-forms to the same funding rules as further education colleges. Colleges receive 8 per cent of their funding according to results.
The White Paper, launched by the Secretary of State for Education and Employment, Gillian Shephard, also includes plans for learning credits for all young people aged 16 to 21, entitling them to further education, training and careers guidance. However, ministers have stepped back from introducing vouchers for sixth-formers - a move widely predicted last summer.
Vouchers with a fixed cash value would be difficult to introduce while schools, colleges and work-based training are all funded in different ways and at different rates. Ministers are also understood to be concerned that a wholesale move to a competitive market place would see large amounts of cash siphoned off to the private sector.
But the proposals, which would also see work-based training for young people funded on the same basis as colleges, leave the way open for a possible move to vouchers in future.
Under the proposals, learning credits would entitle all 16- to 21-year- olds to education or training up to a level-three qualification - the level of a junior supervisor.
The Government claims the credits, to come into force in September 1998 and likely to take the form of a smart card, will make young people more aware of their learning options and encourage more to continue education after 16.
The White Paper, Learning To Compete, also sets out other measures designed to throw a lifeline to disaffected young people in danger of dropping out of education. They include encouraging local partnership between schools, colleges and employers to give 14- to 19-year-olds more opportunity for vocational learning.
David Hart, general secretary of the National Association of Head Teachers, said: "There is a distinct danger that learning credits will become vouchers which will not operate in the interests of individual students. Likewise the funding to underpin the 14-19 age group is quite inadequate and the Government's drive to introduce a competitive element into the funding for those in sixth-forms will inevitably lead to funding on the basis of the lowest common denominator."
Labour yesterday accused the Conservatives of stealing its clothes over schemes to help young drop-outs.
n Small businessmen and other adults will be able to buy into a new University for Industry under Labour, the party will say today, writes Fran Abrams. Private education agencies, universities and colleges would draw up courses which would be available on a specially designated digital television channel. There would also be new learning centres in shopping malls.
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