Colleges favoured as ITPs get less for adult skills in Greater Manchester

Greater Manchester’s independent training providers will be excluded from an adult skills funding rate uplift offered to colleges and councils next year.

The region’s combined authority will boost qualification funding rates by 3.2 per cent in 2026-27 for grant-funded colleges and local authorities.

But independent training providers delivering adult skills fund (ASF) provision under procured contracts will only receive one-year extensions, and receive no extra money.

FE Week understands it is the first known case of a public body paying different rates for the same publicly funded adult skills qualifications depending on provider type.

The decision affects 13 contracted providers delivering about £17 million in ASF provision to around 13,100 residents.

According to a Greater Manchester Combined Authority (GMCA) decision report, colleges and local authorities will get the uplift because they are “key strategic partners” whose training forms part of the “state-maintained system of public education and its associated asset base/infrastructure within Greater Manchester that is funded wholly or mainly from the public purse”.

The report added colleges have a “statutory obligation” to respond to local priorities and policy changes, unlike commercial training organisations, which can suddenly shift their business focus or cease trading.

By increasing qualification funding rates, GMCA will raise grant allocations by £1.8 million to £78.5 million, shared between 16 colleges and councils to support around 49,700 residents in 2026-27.

The move has been welcomed by colleges in the region, which said they were “pleased that GMCA has listened to concerns” about funding rates and grant allocations being too low.

The decision was approved by GMCA group chief executive Caroline Simpson under powers delegated by former mayor Andy Burnham.

One ITP manager with a GMCA contract, who asked not to be named, told FE Week they had been unaware they were excluded from the uplift until contacted by this publication.

They said the decision appeared “difficult to justify” given private training providers face the same delivery costs as colleges.

“It’s quite clear that you’ve got some local colleges with political clout making some noise,” they added.

Charlotte Jones, head of operations for the Greater Manchester Learning Provider Network, told FE Week the representative body was “working closely with GMCA to fully understand the rationale” behind the rate disparity.

Meanwhile, Simon Ashworth, deputy CEO of the Association of Employment and Learning Providers, said: “We simply don’t accept the narrative here that independent providers are somehow less committed or less important to meeting local priorities.

“Independent training providers play a vital role in delivering adult skills across Greater Manchester, often reaching the types of learners other institutions can’t.”

He added it was “difficult to see” why inflationary pressures and rising delivery costs would apply to one type of provider but not another.

New commissioning and funding model on its way

The targeted uplift for grant-funded providers will apply for at least the 2026-27 academic year while GMCA develops a new commissioning strategy and funding model, expected to be confirmed this autumn.

According to the combined authority’s analysis, annual learner numbers across all adult skills funding streams have increased by 14 per cent to 58,190 since 2019-20.

Over the same period, the value of Greater Manchester’s adult skills funding from central government has eroded by 17 per cent in real terms because of inflation.

GMCA said that against this backdrop “a shift is now needed to enable GM’s skills system to play its part in delivering the Greater Manchester Strategy ambitions”.

Following the funding model review, the authority said it would be able to “commission and fund skills and employment support more flexibly and innovatively” through Greater Manchester’s integrated settlement.

GMCA last increased qualification funding rates in 2024-25, when Andy Burnham rejected national reforms adopted by other devolved authorities and instead retained 2023-24 rates with a 6.5 per cent uplift.

At the time, Burnham described the increase as an “interim” approach ahead of greater budget flexibility. However, qualification rates remained frozen in 2025-26 despite the authority securing its integrated settlement, which comes with more budget flexibilities compared to most other mayoral authorities.

Last month’s report proposed a “collaborative task and finish programme” this summer to seek agreement with providers and stakeholders on how to deliver growth “whilst maintaining a stable, sustainable adult skills system”.

Local colleges ‘pleased’

Since 2020, GMCA has reduced the amount of adult education budget funding, now known as the ASF, delivered through contracted providers from £23 million to £17 million, while grant funding for colleges and local authorities has increased from £66 million to £78.5 million.

A spokesperson for GMColleges, which represents nine of Greater Manchester’s 11 colleges, said: “We are pleased that GMCA has listened to concerns about funding rates and allocations and that they have responded positively at a time when nationally we are witnessing the continued underfunding of adult education.

“We are now working with the combined authority and partners on the longer-term future of adult skills funding within the integrated settlement.”

Sector experts told FE Week they were unaware of any previous case in which either a mayoral combined authority or central government had paid different funding rates for adult skills delivery based solely on whether provision was delivered by a grant-funded college or local authority, or by an independent provider under a procured contract.

Jones said: “FE and skills providers of all types play a vital role in meeting local priorities, employer needs, and the growing demand for skills and support among unemployed adults across Greater Manchester.

“A fair and consistent funding approach is essential to sustaining a diverse, high‑quality provider base that can respond effectively to the needs of learners, employers and communities.”

GMCA confirmed the uplift for grant-funded colleges and councils but did not comment further on the exclusion of ITPs.