The Labour administration set up the transfer so that local authorities would become responsible for commissioning and paying for the education and training of all children up to the age of 19.

The Learning and Skills Council (LSC) was scrapped and three new bodies were set up, including the Young People’s Learning Agency (YPLA), which was created to provide councils with the cash to pay for local 16 to 19 provision, such as college or apprenticeship places.

But Gove has decided that the system created by the last government is too bureaucratic. The YPLA, not local authorities, will now be charged with paying for student places at further education colleges, sixth form colleges and other training providers from August.

Gove is also removing the duty on councils to work together in regional and sub-regional groups to organise education provision for young people, in a move that will leave local authorities to co-operate as and when "they see fit".

In a letter to the Local Government Association (LGA), Gove said: "With effect from the start of the coming academic year, I am asking the YPLA to make financial payments to general further education and sixth form colleges and other training providers so removing the need for local authorities to manage contracts and grant agreements."

Despite this, he added: "School sixth forms will continue to be funded by local authorities."

Schools minister Nick Gibb claimed the changes announced by Gove underline the government’s principle of freeing up schools and colleges to focus on providing education.

"Today’s announcement will cut red tape and allow local authorities to focus on their strategic role as champions of young people, taking action where they identify significant issues in terms of gaps in supply or quality, particularly in ensuring access among the most vulnerable groups," he said.

But Shireen Ritchie, chair of the LGA’s Children and Young People’s Board, warned that the system for organising 16 to 19 education and training remains too complicated.

"There will be disappointment that this reorganisation of post-16 education follows so swiftly from a previous one, and the latest leaves just as many funding streams and middlemen in place," she said.