Approved by Parliament in March 1992, this piece of legislation marked a turning point in the provision of post‐compulsory education. It was an enactment of the proposals set out in the 1991 White Paper Education and Training for the 21st Century, one of the most far‐reaching of which was that colleges of further education, sixth form colleges, and tertiary colleges were to be removed from the control of local education authorities (LEAs). The colleges were now to be funded through the Further Education Funding Councils, of which there was one for England and one for Wales. This transformation of the further education colleges into corporate bodies became known as incorporation, and brought about major changes in the employment conditions of lecturers in further education, which had hitherto been set out in the Silver Book. Existing lecturers were required to sign new contracts involving them in longer hours and shorter holidays in return for progression in pay. Those who were unwilling to relinquish their original conditions of service remained on the old pay scale with their salaries frozen. All new appointments were made under the revised terms and conditions. This matter of contracts caused widespread discontent among lecturers in the sector, and a deterioration in the relationship between lecturers and senior management. Incorporation also marked the real beginning of a quasi‐market in further education, as colleges whose provision had previously been managed and agreed strategically under the aegis of the LEAs began to operate as individual corporate organizations. Competition for students often involved offering courses and qualifications which duplicated provision in neighbouring colleges and sixth forms. The necessity to compete in a crowded market created a situation in which stronger (larger, better resourced, or more entrepreneurial) colleges thrived at the expense of others which were less favoured by the market, which inevitably led to some college closures and mergers in the years following this legislation. Moreover, by allowing schools to bring an element of vocational education into the post‐16 curriculum with the introduction of General National Vocational Qualifications (GNVQs), the Act was also responsible for creating further competition between schools and colleges for attracting or retaining pupils at 16. Many 11–16 schools used the introduction of GNVQs as an opportunity to open vocational sixth forms, thereby enabling them to retain pupils after Key Stage 4 who would otherwise have gone on to further education college or joined the sixth form of a neighbouring 11–18 school. In a number of ways, therefore, the Act was responsible for pushing the secondary and tertiary sectors of education firmly into the world of competition and market forces, with the declared purpose of raising standards of provision. In a similar vein, it also brought about a reform of the careers advisory service by requiring local authorities to put this service out to tender.
In terms of higher education, the Act abolished the binary system (or binary divide), allowing polytechnics to assume the title of ‘university’, and introducing the Higher Education Funding Council, with separate councils to fund higher education in Scotland and Wales. The Act encouraged the implementation of an alternative, vocational route at 16—a route described as having parity of esteem with General Certificate of Education Advanced Levels—and at the same time an expansion in higher education provision. In this way it ensured a progression route for students wishing to use their GNVQs to gain entry to university.