The Government tells us it is introducing a coherent 14-19 phase of education. The leaving age is to be raised to 18 by 2013, curriculum reforms introducing diplomas and the foundation learning tier are under way, and local authorities will assume overall responsibility for the phase from 2010. There is one thing missing: an integrated 14-19 funding system.

Simply transferring funds to local authorities will not change the fact that funding arrangements pre- and post-16 are radically different. Local authorities fund pre-16s; the Learning and Skills Council funds post-16 programmes. Those who deliver diplomas work with the two groups. This artificial separation actively inhibits curriculum planning and learner choice.

For example, pupils who reach 16 without gaining a level 2 qualification (equivalent to five good GCSEs) but want to continue in education must either take a further two years at level 2 - too long, particularly if they aspire to level 3 - or cram a two-year course into one, which is too demanding. The obvious answer is a 15-17 programme. But how would that be funded?

The assumption in further education circles is that post-16 funding fits the curriculum reforms better than the local authority funding model. And at first sight that is true. The reforms introduce a more differentiated system pre-16 with practical subjects, such as construction, costing more than academic subjects, such as history.

Some pupils, and some schools, will follow a more practical curriculum than others. Furthermore, pupils will transfer between institutions. There is a need for a system of transfer prices to regulate these exchanges and ensure that funding follows the learner. The emerging vision seems to be that the new Young People’s Learning Agency (YPLA) will sort out the rates for all activities from 14 onwards and give local authorities earmarked sums to pass on, untouched, to schools and colleges, as with sixth forms.

Some major obstacles lie ahead. One is that schools are unlikely to agree to the huge data demands of an LSC-type funding system: they are used to counting pupils, not the details of their programme. They may see little advantage in exchanging a break in funding systems at 16 for one at 14. And local authorities are unlikely to agree to extend the new agency’s remit to 11-year-olds to solve the problem tidily.

Equally, the aim of regulating prices that schools and colleges charge each other when pupils move is doomed to failure. It is too complex. One school might contract out the principal learning for a diploma course; another might only outsource the practical elements; a third might send its staff to teach in another’s workshops, and so on.

Finally, the idea that local authorities can exercise their role without altering the allocations handed out by the agency is unrealistic. If there is an entitlement, someone has to subsidise uneconomic groups. Rates ought to reflect local variations in costs. Local planners need to fund local priorities.

So, instead of extending FE funding complexity down to the 14-16 stage, why not extend the simplicity of schools funding up to 18? After all, the 14-19 reform agenda involves reducing all vocational provision in FE into 14 lines; and the practical offer that is emerging through diplomas is a lot less sharply differentiated from academic work than the current FE portfolio.

Removing the success rate factor would cut discrimination against the disadvantaged; and counting students would cut the bureaucratic burden, cut audit demands and stop tariff farming. It would mean an even slimmer YPLA.

Mick Fletcher, An independent education consultant.