Half of councils face insolvency over £5bn SEND deficit ticking timebomb

More than half of councils have warned they will become insolvent when a measure keeping spiralling SEND deficits off their balance sheets expires next year.

Ministers are facing growing calls to write off high needs budget deficits, which the Department for Education believes will total £4.9 billion by 2026.

Local authorities have been allowed to keep the deficits off their main balance sheets since 2020, under a measure called a “statutory override”. This prevents them from effectively declaring bankruptcy.

The government has still not said what it will do when the override expires next year.

The Local Government Association surveyed its members with responsibility for SEND, receiving 105 responses.

Fifty-three per cent of responding councils said that if the override ended as planned with no alternative to address deficits, they would not be able to set a balanced budget in 2026-27.

This would rise to 63 per cent in 2027-28 and 65 per cent in 2028-29.

‘Write off high needs deficits’

The LGA said it was “calling on the government to urgently address the issue in the spending review, as part of a wider programme of reform of the SEND system”.

Government should write off high needs deficits, they said, which have followed a huge surge in demand for support since reforms to the system were made in 2014.

The number of children and young people with an education, health and care plan, which is supposed to guarantee funded support, rose to 575,963 last year, up 11.4 per cent on the previous year.

The chancellor Rachel Reeves allocated a £1 billion increase in high needs funding at her autumn budget. But the LGA said this was “likely to be consumed by partially plugging existing deficits”.

The high cost pressures of safety valve deals

Arooj Shah, who chairs the association’s children and young people board, said: “The ending of the statutory override threatens councils’ financial viability.

“Only by taking bold and brave action in the spending review and writing off councils’ high needs deficits can councils have the financial stability they need to ensure children with SEND get the support they need.”

A system in crisis

However, she warned funding was “only one of the challenges facing the SEND system”.

Last year, a report by the National Audit Office found the system was “financially unsustainable”, with current intervention programmes inadequate to resolve the issues and urgent reform required.

Despite costs rising, by 58 per cent in a decade, it has “not led to better outcomes for children with SEN”, the NAO found.

The previous government tried to support councils with bailouts in exchange for cost savings under so-called “safety valve” agreements.

But Schools Week revealed last year that more than a third of councils such deals faced bankruptcy, despite being set to receive more than £1 billion in government bailouts before the end of the decade.

FE Week also investigated cash-strapped councils under safety valve deals were offering possibly unsuitable placements to high-needs young people.

‘Sobering’

“Putting councils on a stable financial footing has to be part of a comprehensive reform plan, which focusses on boosting inclusion in mainstream schools, early years settings and colleges, ensuring they have the capacity and expertise to meet the needs of children with SEND,” added Shah.

Natspec chief executive Clare Howard said: “Natspec supports the LGAs’ call for high needs deficits to be written off as this will provide a stable financial basis on which to move forward.

“The ‘statutory override’ or ‘safety valve’ was always going to be a short-term solution. From our perspective, it was also a highly unsatisfactory one, as FE Week has previously reported, in that it encouraged LA decision making which was led by financial considerations rather than by meeting needs of CYP or respecting their legal right to support.

“However, we will find ourselves back in the same position in a few years’ time unless DfE comes up with a fully costed plan and a commitment to invest the money needed to ensure children and young people have the high quality SEND provision they need and deserve. In arriving at its costings, DfE should be considering where there is wastage in the current system.”

A DfE spokesperson said: “The system we’ve inherited has been failing children with SEND and their families for far too long – this is unacceptable and is why we set out our Plan for Change to ensure no child is left behind.

“We recognise the strain that SEND provision is putting on local government’s finances, and we are working with the sector on how to improve outcomes for children with SEND whilst ensuring the system is financially sustainable. 

“We are already making progress by investing £1 billion into SEND and £740 million for councils to create more specialist places in mainstream schools, paving the way for significant, long-term reform.”

The Role of Further Education Colleges in Bridging the UK’s Digital Skills Gap 

The Digital Skills Shortfall 

The UK’s economy is undergoing a profound transformation as demand for advanced digital skills surges across industries. In fact, a 2024 report by the Learning and Work Institute highlights that 49% of employers struggle to hire staff with the digital and tech skills they need, a shortage that is reportedly costing the UK economy £63 billion per year. 

The need for a digitally skilled workforce is not just a national priority; it is also regionally specific. According to Skills England’s first assessment of the nation’s skills needs (Skills England: Driving growth and widening opportunities 2024), over a third of UK vacancies in 2022 were attributed to skills shortages – a sharp increase compared to the period from 2013 to 2017. 

The report also underscores regional variations in labour market needs, with Local Skills Improvement Plans (LSIPs) identifying sector-specific skills gaps and highlights the importance of skills for economic growth, with around one third of average annual UK productivity growth attributable to an expansion of skills available in the workforce between 2001 and 2019. These findings underscore the urgent need for a more targeted, regionally informed approach to addressing the digital skills gap. 

Why FE Colleges Are Uniquely Positioned to Address the Digital Skills Gap 

Further Education colleges have long been pillars of community-focused education, making them uniquely positioned to tackle the UK’s digital skills gap. As institutions embedded within their local economies, FE colleges have an unmatched ability to align their curriculum with the needs of regional employers, creating job-ready learners equipped for real-world challenges. 

Strong employer partnerships are central to their success. By collaborating with advisory councils and businesses in key sectors, FE colleges gain invaluable insights into the skills that employers demand most – whether it’s coding, IT support, or software development. These collaborations allow colleges to offer industry-informed courses that stay ahead of evolving market trends, ensuring graduates are work-ready from day one. 

In addition to their industry alignment, FE colleges provide inclusive learning opportunities for students who may face barriers to traditional university routes. Flexible qualifications, such as Code Institute’s Introduction to Software Development RQF Level 3, offer accessible entry points to education and, in many cases, funding options that remove financial barriers. For learners ready to advance, the Diploma in Web Applications Development RQF Level 5 builds on these foundations, equipping students with advanced skills for graduate-level roles in IT and software development. 

This pathway is more than just a sequence of courses, it’s a holistic approach to education. FE colleges often combine technical qualifications with career support, such as CV-building workshops, interview preparation, and job placement assistance. By addressing both the academic and practical needs of students, colleges ensure learners are prepared not only to secure employment but to thrive. 

Crucially, FE colleges are also tailored to meet the unique needs of their regions ensuring that they are not only addressing the digital skills gap but also driving local economic growth by connecting learners to industries that need them most. 

Discover More in Our Webinar 

We invite you to join Paul Saunders, Commercial Director at Gateway Qualifications, and John Waite, Group Curriculum Director at New City College Group, and watch our webinar: “Partnering for Success: How FE Colleges are paving the way to graduate-level jobs in tech” to explore this theme in greater detail. 

In this session, you will gain insights into: 

● Why FE colleges are uniquely positioned to address the UK’s digital skills gap 

● The importance of equipping learners with skills that meet local workforce needs 

● Effective curriculum planning for producing job-ready learners 

● How regulated qualifications can create a pathway to graduate-level IT jobs 

● Success stories and employment outcomes 

WATCH THE WEBINAR NOW

English and maths apprenticeship reforms: 24-25 rules updated

Reforms to English and maths functional skills requirements for adult apprentices have been reflected in a new version of the government’s 2024-25 funding rules published today.

Here’s what the updates say:

Applies to those aged 19+ on day of start

Only apprentices who began their apprenticeship training when aged 16 to 18 will continue to be subject to the mandatory requirement to study towards and achieve English and maths. 

Apprentices who began their training when aged 19 or older, and their employer, can still choose to study towards English and maths qualifications if they wish, but the choice is optional.

DfE will continue to fund adult apprentices who take up this option at the current rate.

The change is effective as of February 11, 2025 and applies to new starts as well as existing learners on-programme.

Where an apprentice restarts, DfE said it will use the “age they originally started their apprenticeship training to determine whether it is a mandatory requirement of the programme”.

Initial assessment and training plans

Where an apprentice, and their employer, wish English and / or maths to be included this must be agreed as part of the initial assessment for new starts.

DfE said it must also be clear in the training plan whether English and / or maths has been included in the planned delivery.

Evidence requirements now state that providers must document the discussion between the employer and apprentice and record the outcome regarding English and maths for adult apprentices. 

Existing apprentices must continue their English and maths training “until agreed otherwise”.

By April 1, 2025, the provider “must discuss the options to continue with English and maths training or to remove it from the training plan, with the employer and the apprentice”.

Where it is agreed that an apprentice will not continue their English and maths training, the provider must “withdraw them back to the last day of English and maths learning and no further funding will be paid”.

Where English and / or maths is removed from the training plan the employer must also re-sign the training plan.

And where an apprentice aged 19+ at the start of their apprenticeship training, studies toward English and maths, providers must “provide evidence of apprentice undertaking assessment”.

What about level 2 apprentices?

Under previous rules, all apprentices had to achieve level 1 English and maths functional skills qualifications if they were on a level 2 apprenticeship and did not pass the subjects at GCSE. Similarly, if a learner was on a level 3 or higher apprenticeship, they must achieve functional skills at level 2 to complete their training.

The DfE does not specifically mention, in its published rules and press release, whether level 2 adult apprentices will still be required to achieve level 1 functional skills.

However, the department’s press office told FE Week that this requirement has now become optional in line with the changes described above.

Read the updated rules in full here.

NEU ends sixth form college pay dispute

The National Education Union has officially ended its sixth form college teacher pay dispute against the government.

Over three in four union members voted to accept a revised pay deal for non-academised sixth form colleges of 4.3 per cent.

Teachers in non-academised sixth form colleges were excluded from the 5.5 per cent pay award offered to teachers in schools and academised sixth forms last year. 

Since then, the union has been embroiled in a bitter row with the government and the Sixth Form Colleges Association, which has seen eight days of strikes in 32 sixth form colleges. 

A further two days of strikes were called off while the union consulted on a revised pay award after the government provided £50 million towards teacher pay. 

Additional funding meant the Sixth Form Colleges Association could increase the pay award for standalone sixth form colleges to 4.3 per cent. 

In a ballot of NEU members, 78.6 per cent approved the deal on a turnout of 64.6 per cent. 

No more ‘two tier’ pay deals

Central to the NEU’s concession was a “firm, written assurance” that future pay awards would be equal across 16-19 providers – ending the practice of non-academised sixth form college teachers receiving a different pay award to their counterparts in academised sixth form colleges and schools.

Ministers have said publicly they “aim [to ensure] that all 16 to 19 providers are funded on an equitable basis from 2025 to 2026.”

Labour snubs colleges in public sector pay awards

Teachers of 16-19 year old students in non-academised sixth form colleges, further education colleges and independent training providers are not in scope of the School Teachers’ Review Body’s annual recommended pay awards. 

However, teachers in school sixth forms and academised sixth form colleges are in scope and received a share of £1.2 billion made available for a 5.5 per cent pay rise for academic year 2024-25.

Despite the “aim”, it remains to be seen whether efforts by post-16 unions and college representatives will result in all teachers being included in future pay awards given constraints on public finances.

The additional £50 million was part of a £300 million package announced at the budget. The remaining funding will be made available in 16 to 19 funding rates for academic year 2025 to 2026, with the “aim of ensuring that all 16 to 19 providers are funded on an equitable basis from 2025 to 2026”.

The Sixth Form Colleges Association (SFCA), which negotiates pay awards with unions, said the end of the dispute was good news for students and teachers.

Bill Watkin, SFCA chief executive, said: “We are delighted that National Education Union members who teach in non-academised sixth form colleges have voted overwhelmingly to end their dispute. 

“This is good news for students who have experienced eight days of disruption to their education, and good news for staff who will now receive an above inflation pay award of 4.3%”.

College rows

Further education college teacher union UCU has so far not balloted for national strike action on teacher pay. 

Members of the NASUWT union in 23 sixth form colleges recently voted to strike unless a 5.5 per cent pay award backdated to September 2024 is implemented. 

Mysteriously, the union did not release the names of the 23 colleges and included its members in academised sixth form colleges, that received the pay deal, in its ballot.

With the NEU dispute now at an end, Watkin “hopes that the NASUWT will not proceed with its planned industrial action in 23 sixth form colleges”. 

Concrete guarantees

Kebede

NEU general secretary Daniel Kebede said his union’s industrial action to date has “boosted funding to the sector for an above-inflation pay award, guaranteed the integrity of their collective bargaining and safeguarded the future of the sixth form college sector into the long term”.

“There was no need for the government to have let this dispute run on when a fair solution was readily at hand. While the concrete guarantees we have secured will ensure that two-tier pay offers do not reoccur in future, we need to see far more investment in sixth form colleges and FE overall. 

“By standing their ground against a clear pay injustice, our sixth form college teachers have spoken for the post-16 sector as a whole”.

Skills devolution spreads with plan for six new regions

The number of people covered by devolved skills budgets is set to increase rapidly with six new potential regions announced last week.

The regions were placed on the government’s “devolution priority programme” with a view to taking control of an adult skills budget after local mayors are elected in 2026.

If all six go ahead it is estimated only 20 per cent of England’s population will live in non-devolved areas.

The number of authorities with local control of skills budgets was already due to double to 20 by 2026, under devolution deals agreed under the previous government.

A total of 26 will operate if the latest deals succeed for Cumbria, Cheshire and Warrington, Norfolk and Suffolk, Greater Essex, Sussex and Brighton, and Hampshire and the Solent.

Devolved funding distribution

The amount of money each devolved area gets is based on the number of learners living in that region in the 2017-18 academic year, the year before skills devolution began.

This formula has remained unchanged for the last seven years.

It means regions housing 43 per cent of the population receive 60 per cent of the adult education budget.

A DfE spokesperson did not respond when asked if the formula will be reviewed or updated.

They also declined to share the 2017-18 learner numbers broken down by region, arguing the information cannot be published as it has not been collated or quality assured.

In the next two years, the portion of adult education funding devolved to local areas is set to grow from 60 per cent (about £828 million) to at least 70 per cent.

This figure could be higher but skills budgets are not yet available for Buckinghamshire.

This summer, York and North Yorkshire, the East Midlands and Cornwall will begin commissioning a combined budget of £73 million.

Next year seven more authorities will be handed control.

The Labour government’s approach to devolution, outlined in its recent white paper, may also result in delays to some of the deals struck under the Conservatives.

The white paper makes clear the government prefers local and combined authorities led by directly elected mayors, who can “use their mandate for change to take difficult decisions”.

Areas such as Surrey previously agreed to a deal that did not involve becoming a mayoral combined authority, but have now indicated they want to reorganise their 11 council areas into a “simpler” system.

There are also ongoing discussions for Devon and Torbay, which already has a non-mayoral devolution deal, joining forces with Plymouth City Council and possibly Cornwall.

Ringfencing dismantled

The white paper also set out rules on gradually increasing flexibilities the devolved areas will have over spendings.

This year, “trailblazer” combined authorities Greater Manchester and West Midlands have been granted “integrated” financial settlements that allow full flexibility over how to spend adult skills funding.

This includes being able to transfer up to 10 per cent of funding between spending areas including skills, transport and housing, and up to 10 per cent across different years.

Until now, portions of funding were ringfenced for specific purposes, such as free courses for jobs and skills bootcamps.

The white paper set out a consistent framework for future devolution, with Greater Manchester and West Midlands now classed as ‘established mayoral strategic authorities’.

Liverpool City Region, West Yorkshire, South Yorkshire and the North East will follow in 2026.

Authorities only classed as ‘mayoral strategic authorities’ will not be eligible for integrated settlements, but will see ringfencing of their adult education funding pots stop from 2026-27.

‘Foundation strategic authorities’, the lowest level of devolved authority which lack directly elected mayors, will continue to be subject to ringfencing for adult education funding.

No answers for failed T Level students in re-mark fiasco

A college and awarding body have been locked in a row for six months after only one student passed a niche T Level.

Nine out of 10 learners taking the control and instrumentation engineering and manufacturing specialism in the 2022-23 academic year were initially given high marks by Middlesbrough College, worthy of at least a pass.

But nine then received an ‘unclassified’ grade when results day came around in August following moderation by City & Guilds.

The college challenged the marking “disparity”, arguing that the awarding body’s assessment was “not an accurate reflection” of students’ work and skill level.

But one outraged parent, who raised the alarm with FE Week after struggling to find answers for six months, said her son had almost turned his back on education after suffering a 55-mark downgrade.

Eleanor Hutchinson said her son now worked part-time in a food factory and added: “He’s disillusioned and he’s hurt – he thinks he’s let everyone down.”

Middlesbrough College said it was pursuing “all formal re-mark and complaints processes” with City & Guilds.

Meanwhile, the awarding body said there were “processes in place to support learners in situations such as this and we have ensured these are available and are being followed”.  

Most of the nine failed students received a ‘partial achievement’ in their overall T Level after scoring ‘unclassified’ in their specialism. They were part of the first and only group in England to take the assessment last summer.

The fiasco came to light amid the retendering process for the design and delivery of the maintenance, installation and repair for engineering and manufacturing T Level.

City & Guilds has held the contract, worth £3 million, since 2020 and rolled it out as part of wave three in 2022. Licences for these T Levels are up for renewal this spring. It is unclear whether City & Guilds will bid to develop the next version of the qualification.

The awarding body opted not to bid for two other T Level contracts from wave one, which retendered last year. One of those, onsite construction, was scrapped by the government in December.

Middlesbrough row

Ms Hutchinson said her son received 78 out of 90 from a Middlesbrough College assessor, placing him in the highest band, but a City & Guilds’ moderator cut the final mark to 23.

He was one of the ‘control and instrumentation’ students to receive a ‘partial achievement’, which is awarded where a learner completes their industrial placement but does not pass either the core or occupational specialism components. 

The student does not get a certificate but can get UCAS points based on their grade in the component they passed.

Ms Hutchinson said her son – who has the equivalent of a ‘D’ in a single A-level – had not been told by his college or City & Guilds why their respective marks were so different.

A college spokesperson said while “teething problems” with qualifications and “staff shortages” in this particular skill area were not uncommon, it is believed the marking disparity is a unique issue.

They added: “We have been in extensive communication with City & Guilds since August, including pursuing all formal re-mark and complaints processes, and we have had direct communication with the chief executive of City & Guilds, including during the last seven days.”

Failed students have been offered “extensive support” and some have moved on to apprenticeships or higher technical qualification courses, the college said.

But the spokesperson added: “This does not take away the frustration and disappointment they must be feeling with both the result and the time taken to try and resolve this matter.

“We can only apologise and reassure them that we are pursuing every avenue in an effort to obtain a satisfactory resolution.”

City & Guilds said: “We are continuing to support the centre in their future delivery of these important qualifications.”

Middlesbrough College had 64 learners on the T Level maintenance, installation and repair for engineering and manufacturing route who were assessed last year.

Including the control and instrumentation specialism students who only received a ‘partial achievement’, the college’s pass rate was 79 per cent, against a national pass rate of 82 per cent.

Awarding troubles

Other awarding bodies have experienced T Level problems. Ofqual issued a £300,000 fine to NCFE for major failings in its 2022 health and science assessments.

The government is injecting more cash into second-generation T Level contracts amid concerns the first contracts forced awarding bodies to work at a loss.

Despite the shaky start in the rollout of some T Levels, the previous government sought to scrap overlapping BTECs and other level 3 courses in a bid to boost low T Level uptake.

Following a “short review” under Labour, the level 3 courses have been given a temporary stay of execution until 2027.

MOVERS AND SHAKERS: EDITION 487

Jon Laud

Assistant Principal (Curriculum Innovation), Nottingham College

Start date: January 2025

Previous Job: Assistant Principal, SMB College Group

Interesting fact: Jon’s background is in TV production, working on shows such as Emmerdale and Countdown. His first work experience was on an Ant and Dec Christmas special! He also appeared on the Jerry Springer show, but fortunately, not as a guest!

Paddy Bradley

Chair, Wiltshire College and University Centre

Start date: January 2025

Previous Job: Former CEO, Swindon and Wiltshire Local Enterprise Partnership

Interesting fact: Paddy was awarded an MBE in 2023 for services to the community and economy of Wiltshire after he helped bring in millions of pounds in government funding to the county’s infrastructure through his leadership at SWLEP.

Apprenticeships behind bars follows open jail failure

Higher-security jails are testing a new apprenticeship model after a scheme run in open prisons failed, FE Week can reveal.

Data obtained through a Freedom of Information request shows the open prison scheme had just 10 prisoner apprentices since its launch in September 2022.

Officials had aimed to recruit 300 prisoners from England’s 13 open prisons by 2025, meaning the target was missed by 97 per cent.

To boost take-up, the government is now trialling apprenticeships with inmates nearing release in closed prisons, with the work element of the training kept within prison walls. 

The qualifications will be completed once the inmate is released.

The MoJ told FE Week that closed prison apprentices are paid £4 per week as directed by the prisoner rates of pay. Meanwhile, prisoners in open prisons allowed to do their apprenticeship on day release are paid the minimum apprentice wage which starts at £6.40 an hour. 

An MoJ spokesperson said: “Getting former offenders into stable work helps cut crime and makes our streets safer. That’s why we are committed to expanding apprenticeship opportunities and are working with employers to increase participation and steer even more offenders away from a life of crime.”

But experts say serious reform in the prison estate is needed for the scheme to succeed.

Jon Collins, chief executive of the Prison Education Trust, said: “Enabling people to successfully complete an apprenticeship in overcrowded and understaffed prisons will have been a real challenge.

“But apprenticeships have the potential to provide a route into sustainable employment and to reduce reoffending, so prisons should make every effort to increase the number of people accessing them and provide the consistent support needed to complete them.” 

Prison overcrowding 

The government amended the law in 2022 to help prisoners access paid work outside of prison as they near the end of their sentences.

In its first year, the scheme was offered in a small number of open prisons to 100 prisoners eligible for release on temporary licence. Apprenticeships included level 2 supply chain warehouse operative and level 2 production chef standards.

Since early 2024, the MoJ has tested the model in the full open estate, consisting of 13 open prisons that can hold over 6,000 men, and more recently in two unnamed closed prisons.

It is also working with New Futures Network, a specialist branch of HM Prison and Probation Service, that connects prisons with employers to fill vacancies.

The government said it was considering shorter duration and foundation apprenticeships to assess their suitability for prisoners and maximise uptake.

Novus and Total People, part of LTE Group, were the first providers involved in the pilot in open prisons, which resulted in two Novus apprenticeship completions in hospitality. Both are involved in this second pilot.

In recently submitted evidence to the justice committee on an inquiry into prisoner reoffending, Novus said prison apprenticeships were an example of best practice in promoting rehabilitation.

“We have overcome early challenges as the programme developed, and are keen to expand this provision,” the evidence said.

Peter Cox, managing director of Novus, said: “Novus’ priority is to support as many prisoners as possible into sustained employment upon release to help reduce reoffending and drive economic growth, and we work with dozens of employers across the country to find work placements and opportunities for learners.”

Heather Akehurst, chief executive of Open Awards, which offers Access to HE diplomas in prisons, echoed Collins’ concerns.

“Prisoners get moved between prisons at very short notice due to overcrowding and particular tensions within settings,” she warned.

“One of the first things that gets lost is prison education, because it is easier to say, ‘No, we’re not going to move them to the training wing today, and we’re not going to supervise’.”

“I think this [scheme] should keep going,” Akehurst added. “I think you’re going to see a big drive in education including apprenticeships, but you’re going to have to fix the prison estate first, so the drive is possibly 18 months behind.”

Come clean on cuts, demand adult education providers

Urgent clarification has been demanded on adult education budget cuts after an announcement to metro mayors sparked confusion in England’s non-devolved areas.

Last week, FE Week revealed combined authority mayors were told to expect a reduction in skills budgets of 2 to 3 per cent for the 2025-26 academic year.

But Caroline McDonald, chief executive of Holex, said the news caused “widespread confusion and frustration” as providers funded by central government had received “no communication whatsoever”.

HOLEX, which represents adult education providers including local authorities, has sent a letter to education secretary Bridget Phillipson calling on her to “review and reconsider” the cuts.

McDonald called the Department for Education’s approach “fragmented” as although some mayors have kept providers in their areas informed, others remain in the dark.

This is causing “operational uncertainty” and “undermining the confidence” of providers, the chief executive added.

The budget cuts come as the UK shared prosperity fund drops 40 per cent to £900 million in April, and the three-year adult numeracy programme Multiply ends.

Community learning impact

Kent and Essex county councils, which have the largest national local authority adult learning budgets in the country, both said they had yet to receive specific details about budget reductions.

A spokesperson for Kent County Council, which is predicting a 3.3 per cent cut to its £8.7 million annual budget, said there was “significant demand” from residents seeking to improve their education, training and skills.

They added: “Any cuts planned by the Education and Skills Funding Agency will see a significant reduction in the number of courses we will be able to provide from August.

“Fewer courses mean fewer residents able to develop their education and skills, limiting their employment prospects and impacting their personal development and wellbeing.”

Mayors’ warning

About 60 per cent of England’s adult education budget is devolved to mayors.

It is understood the DfE sends mayors informal letters each January outlining how much they are likely to receive.

This resulted in mayoral officials warning providers in their regions they should prepare for reductions of 2 to 3 per cent.

England’s main adult education budget, the adult skills fund, amounts to about £1.4 billion this year.

The money – which focuses on employability skills but also includes broader ‘tailored learning’ – is handed out to FE colleges, independent training providers and local authorities.

FE Week estimates the cuts planned in the next academic year would save the DfE £30 million.

The Office for Budget Responsibility had previously said the government’s spending plans involved a 1.1 per cent cut each year in unprotected budget areas, including further education and skills, from 2025-26.

This follows two decades of budget reductions, with total public spending on adult classroom-based learning falling from £5.1 billion in the early 2000s to £1.7 billion in 2023-24, according to the Institute for Fiscal Studies.

In the same period, the number of publicly funded qualifications taken by adults in England has fallen from 5.6 million to 2.3 million, with level 1 and below suffering the steepest decline.

‘Economically illiterate’

Leaders in the FE sector have argued spending cuts contradict the government’s commitment to “driving economic growth”.

A lack of investment in skills, both from the public and private sector, is understood to be a key driver of persistent job vacancies, a low national productivity rate and a reliance on migration in some sectors.

Association of Colleges chief executive David Hughes said: “We know the DfE is under financial pressure and this cut is presumably part of a wider package of measures DfE is having to take to make its books balance. 

“The sooner that package is communicated, the better. With the spending review due in June, our concern is what this might indicate for all post-16 funding for the next few years.”

Former North of Tyne mayor Jamie Driscoll, who oversaw a £23 million adult skills budget, called cuts to adult education “economically illiterate”. 

He said: “The government keep banging on about growth, then cut skills training – when the number one barrier to growth is finding skilled workers.

“The axe will fall on all the courses that help the hardest to reach get into employment.”