Private training providers have been told their current adult education contracts will end next July – rather than be automatically renewed as before.

The news came in a letter from the Skills Funding Agency to all training providers, dated October 12, and seen by FE Week.

It stated that changes to contracting regulations, which came into force in February, meant that the SFA could no longer automatically renew contracts when they ended and instead “must procure future training provision”.

The letter continued: “Please therefore accept this letter as formal notice that your current contract will terminate on 31 July 2017.

“We will shortly be launching an open and competitive procurement exercise for AEB [adult education budget] funded provision.”

Further information about the procurement exercise would be provided “over the coming weeks”, it said.

Colleges – which contract with the SFA through a grant funding agreement – are not affected by the changes, the letter said.

The news has prompted Association of Employment and Learning Providers chief executive Mark Dawe to call for all providers – including colleges – to have to compete to deliver adult education budget provision.

He said: “If it is true that all providers, including those that already have a grant, are able to tender for this part of AEB, then we believe that all AEB funding (contract and grant) should be put out to tender.  

“Without this, it would seem the process is incredibly biased against large independent providers.”

As previously reported by FE Week, the requirement to procure the AEB provided by private training providers is the result of changes to European Union law.

The changes were first revealed in an SFA document, Adult Education Budget: Changing context and arrangements for 2016 to 2017, published on January 28.

That document said: “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 will be subject to competition as part of a procurement process.”

The new contracts would be for 2017/18 “with an option to extend contracts for a further two years, which we will review on an annual basis,” according to the letter seen by FE Week.

Procurement would be open to all providers on the register of training organisations “that have passed capacity and capability for the delivery of education and training services, and selected relevant interests”.

The change will not affect apprenticeship provision, which will be procured separately through the new register of apprenticeship training providers.