An Essex-based charity is understood to be in talks to become the first independent training provider to be legally reclassified as a college.

Prospects Learning Foundation, which has two centres in Basildon, one in Southend-on-Sea and one in Canvey Island, is thought to be looking at the move.

The charity, which has around 250 staff, 2,000 students and a turnover of £11m, already calls itself Prospects College and has a current Skills Funding Agency (SFA) adult skills budget allocation of £200,650, a contract for 16 to 18 apprenticeships of £2,461,731 and an Education Funding Agency (EFA) allocation of £490,000.

News of the possible move towards college status comes after Skills Minister Matthew Hancock revealed last month, in an unrelated FE Week special report on college mergers, that his officials at the Department for Business, Innovation and Skills (BIS) were considering promoting the attainment of incorporated status.

“As part of encouraging greater diversity and innovation, the government is always keen to explore how new entrants might enter markets,” he wrote in FE Week.

“The Department for Business, Innovation and Skills is currently looking at whether there is a case for encouraging different types of provider to secure incorporated status in FE.”

However, Prospects chief executive Neil Bates declined to comment.

Colleges were incorporated in April 1993 primarily to remove funding from local government and keep down council tax bills while refocusing public-funded education on employer needs.

Joanna Forbes, senior associate solicitor in SGH Martineau’s education team, said it would “mean the provider would be eligible to be funded by the SFA/EFA on a directly-funded basis as a college, rather than as a private provider.”

“This would give access to more flexible recurrent funding, although recent funding reforms have reduced the impact of this, as well as to capital funding available to directly funded FE colleges,” she said.

“It would also provide greater stability of funding, which might be viewed more favourably by lenders and potential partners.

“On the downside, new colleges would be caught by legislation applicable to public bodies, such as the Freedom of Information Act, Human Rights Act and general equality duty, all of which will impact on its day-to-day operations.”

A spokesperson for the Association of Employment and Learning Providers said: “Independent training providers will make their own decisions on whether or not to incorporate, but incorporation should be an open and transparent process.

“In any event, all providers should be treated in line with common principles applied to all such as contracting and access to capital.”

A spokesperson for the Association of Colleges said: “FE and sixth form colleges are the most successful part of the education sector and so, where they meet new demonstrable demand, we would be delighted to see new colleges being established.

“Where new institutions are being considered it’s important that there is full and transparent consultation.

“Our membership is open to any college established under the Further & Higher Education Act 1992 therefore any new institution that meets the criteria would be welcome to join, just as Rochdale and Lowestoft sixth form colleges did in recent years.”

A BIS spokesperson said: “As the minister wrote in June, as part of encouraging greater diversity and innovation, the government is always keen to explore how new
entrants might enter markets. At this stage the work is purely exploratory.”