Independent training providers (ITPs) will have to compete for Skills Funding Agency (SFA) contracts following changes to European Union law.
The document, Adult Education Budget: Changing context and arrangements for 2016 to 2017, published on January 28, said that contract arrangements would stay the same for the next academic year.
But it warned: “In advance of 2017/18, changes to EU procurement regulations will require us to procure the adult budget provided to ITPs.
“This means that the AEB [adult education budget] will be subject to competition as part of a procurement process.
“We are working through the detail of this, including taking advice from our group of stakeholders and we will provide further information later in the year.”
The change is not expected to apply to apprenticeships, as the Government plans to introduce the levy on large employers from April 2017. However, it looks set to apply to the rest of the AEB.
Stewart Segal, chief executive of the Association of Employment and Learning Providers, said he was aware of the planned change.
He said: “This will mean that the SFA will probably have to run an open tender process some time in 2016.
“Grant funded organisations can have a ‘roll-over’ contract without external tendering, but our view is that all providers should be treated in the same way.
“We also believe that the rules may also allow some budget for each ITP to be ‘rolled over’ without tendering.
“If this was the case, the majority of providers would retain their current contracts.”
He added that the SFA would be discussing how the procurement process should work in practice with AELP in the “next few months”.
An SFA spokesperson said: “We are developing our approach to the competitive procurement of AEB-funded activity in line with EU public procurement regulations, including taking advice from our group of stakeholders. We will provide further information later in the year.”
When asked if the changes would apply to apprenticeships, she added: “We are reviewing the impact of the Public Contracts Regulations 2015 on how apprenticeships are delivered, following the introduction of the levy in 2017.
“We will confirm any procurement plans arising from this later in the year.”
An EU spokesperson declined to comment when asked why it was changing the procurement regulations.