National adult skills fund contracts to end in August

Nationally procured adult skills fund contracts will end next year as the government expands its “pathway to devolution” programme.

The Department for Education today said current contracts will expire on August 1 and it will not run a national procurement exercise for the 2027-28 academic year.

Instead, the government will continue to expand its pathway to devolution programme, under which funding delivered through directly procured contracts in non-devolved areas is transferred to local authorities.

These councils will then be able to commission providers to deliver adult skills training based on local skills needs, the DfE said.

The announcement confirms the direction of travel reported by FE Week earlier this year, when independent training providers warned their national ASF allocations were being squeezed as more funding was handed to local authorities through the pre-devolution pilot.

National contracts were cut from £77 million when first procured in 2023-24 to £37 million in 2025-26, with the number of providers falling from 57 to 45. FE Week reported that some providers had seen their allocations fall by as much as 90 per cent since the first year.

The DfE said the proportion of ASF funding delivered in non-devolved areas would reduce each year as more areas take responsibility for their adult skills budgets.

It added that grant funding agreements will be unaffected by the change.

Ben Rowland, CEO of the Association of Employment and Learning Providers, said the decision not to run a national ASF procurement for 2027-28 was a “significant change for independent training providers and other providers without guaranteed contracts”.

He added: “When current national contracts end, there will be no equivalent national procurement route, and providers will increasingly need to access local commissioning markets.

“In principle, local commissioning could better align provision with local skills needs, but it also changes how providers access the market, particularly those operating nationally or across several areas.”

Luke Muscat, CEO of Leep Group, which has held a national ASF contract since the 2023 procurement, said the end of nationally procured adult skills fund provision should “not come as a surprise” as the “direction of travel has been clear since adult education funding began to be devolved in 2019”.

He told FE Week that for training providers, managing several smaller contracts with local authorities will create “more administrative pressure than delivering one national programme”, but said this is “our challenge to manage and should not obstruct the development of better local solutions”.

Muscat added that the greater concern was whether every new commissioning authority “has the capacity to succeed”, given Leep Group’s experience of working with smaller local authorities showed that “many teams are already stretched”.