The number of Skills Funding Agency offices are to be radically reduced as they become ‘Further Education funding centres’ from 2018, FE Week understands.

The plan was set out in an internal document, ‘2020: Future and Beyond’, which has been circulated through the Department for Education (DfE) and Department for Business, Innovation and Skills (BIS).

It is understood that post-16 FE funding staff from SFA and EFA will be brought together in bases in Cheylesmore House, Coventry, where SFA is now and EFA staff are moving back in to, and current BIS offices in Birmingham and Swindon.

The move casts further doubt over the long-term future of the SFA and EFA as independent entities — and comes after Peter Lauener, the chief executive of both agencies denied that merger plans were in the pipeline during an exclusive interview with FE Week editor Nick Linford in our last issue.

A spokesperson for BIS, EFA and SFA told FE Week on February 25: “This document [2020 : Future and Beyond] is not referring to creating any new organisations, it’s talking about developing a location strategy that better meets the needs of BIS in 2020.”

When asked if the funding agencies would merge, Mr Lauener said during the interview that he was “trying to put to one side the question of whether there should be a merged agency”.

But the senior mandarin, who was already in charge of EFA when he was appointed chief executive of the SFA in November 2014, added: “At some point we may come back to question of whether there should be a merged agency, but that is actually a matter for the two parent departments [Dfe and BIS].”

He previously answered questions on the possible merger of both agencies, during a House of Commons Public Accounts Committee hearing on October 19.

Mr Lauener told MPs he was working on delivering “savings” for both, but “actually took the job on the basis that there was no planned merger”.

FE Week revealed three days later that SFA finance director Paul McGuire was stepping down —clearing the way for responsibilities falling under his remit to be shared with the EFA.

The government has since revealed it will launch a new Funding Agencies Shared Service Team (FAS2T), to run across the SFA and EFA, covering finance, IT and data from April 1.

The DfE is advertising for a data science director to work within the new unit. The advert on the Civil Service Jobs website stated that it “will be responsible for paying and assuring some £60bn of public funds annually”.

FEFC was the acronym for the agency before the Learning and Skills Council (LSC) was created in 2001, but then referred to ‘Further Education Funding Council’.