Government funds of £18.8m a year to get a new FE body off the ground have been welcomed, although the total is around £10m less than what was asked for.

The Department for Business, Innovation and Skills (BIS) confirmed funding, excluding VAT, of £18.8m for August to April next year, and the same figure again for 2014-15, to develop the FE Guild.

David Hughes, independent chair of the guild’s development steering group and chief executive of the National Institute of Adult Continuing Education, said the funding was “in line” with expectation, even though the steering group had pitched for £28m, according to documents seen by FE Week.

“We are delighted to have received ministerial support and funding,” he said.

The money would enable the group to “move forward” allowing it to “make a very positive contribution” to the sector.

“Our focus now is . . .  to recruit a chief executive, establish the new organisation and deliver what the sector needs,” added Mr Hughes.

The guild — yet to be officially named and due to launch in August — will provide training and set professional standards across the sector.

The organisation could also have the opportunity of increased future funding if it took on extra responsibilities such as WorldSkills UK competitions, establishing a national vocational education and training centre, and the administration of chartered status, an accreditation system launched by the government last month to recognise top FE providers.

The official go-ahead and funding has been warmly welcomed across the sector.

Lynne Sedgmore, executive director of the 157 Group, said the announcement confirmed the government “had confidence” in the sector to “develop its own professionalism”.

The Association of Employment and Learning Providers (AELP), the Association of School and College Leaders, and the Association of Adult Education and Training Organisations (which operates as HOLEX), echoed her view.

The guild proposal was first put forward by ministers in 2011. A small project team, with a steering group with representation from the sector, issued a consultation document at the end of January.

Its implementation plan, produced  at the end of last month, sparked controversy when the National Union of Students criticised the decision that there be no learner representatives on the guild board.

Nevertheless, the body will be set up as a company limited by guarantee and registered as a charity with board members from organisations including the Association of Colleges, the AELP, the Third Sector National Learning Alliance, and HOLEX, said a guild spokesperson.