Mayors have handed out at least £5.5 million in capital funding to independent training providers over the last decade, data obtained by FE Week shows.
According to freedom of information (FOI) request responses from ten mayoral combined authorities (MCAs) with devolved adult skills fund responsibilities, more than £300 million has been invested into 160 education-related projects at further education colleges, local authorities, universities and independent training providers.
This included at least £5.5 million granted to 30 ITPs, including privately owned businesses, non-profits, and charities.
It suggests mayors are more willing to take risks by investing capital funding in independent training businesses than the Department for Education, which reserves most grants for colleges.
The largest amounts of grant funding for ITPs came from Liverpool City Region Combined Authority (LCRCA) and the Greater London Authority (GLA), which invested in new facilities and equipment for construction, digital and creative skills.
However, the FOI responses to FE Week also show that the investment has only come from four MCAs, with six confirming that they have not provided capital grants to any ITPs.
The six were: Greater Manchester, West Midlands, South Yorkshire, West Yorkshire and West of England.
As recently as this year, Cambridgeshire and Peterborough mayor Paul Bristow signed off £550,000 in grants to two private training businesses to help fund training facilities that would fill in local FE “cold spots”.
Last year, Tees Valley Combined Authority also handed £114,750 to a local training provider for a specialist welding training facility that aligns with the needs of a local employer.
Simon Ashworth, deputy CEO at the Association of Employment and Learning Providers, said: “We are pleased to see the forward-thinking approach taken by local commissioners regarding the distribution of capital funds to non-grant-funded providers, including ITPs.
“However, there are still instances of capital provided to local areas with too many restrictions where the funds must be directed to, particularly around 16-19.
“This goes against the grain of devolution and local choice, and where ITPs have a small, but growing influence, which aligns significantly with the government’s core mission on tackling the NEET crisis.”
‘Second-class’ complaints
The Department for Education and some mayoral authorities have faced criticism for treating ITPs like “second-class citizens” by excluding them from access to capital funding.
This includes post-16 capacity funding devolved to mayoral combined authorities, which the government has decreed can only be directed at “statutory providers” of 16 to 19 education: FE colleges, sixth form colleges, and 16-19 academies.
Some ITP leaders argue their agility and responsiveness mean they are well-placed to use public capital funding to help address post-16 capacity constraints and rising youth NEET numbers.
But rare cases where the DfE has approved funding to ITPs have ended badly, such as a £3 million grant to the north east’s NA College via the Institute of Technology programme.
NA College was a privately-owned business that fell into insolvency in 2024 – with its publicly funded specialist equipment sold at auction.
Mayors’ risky investments
While many of the ITPs that received capital grants in London and Liverpool continue to operate, FE Week has identified two providers that collapsed after securing mayoral funding for buildings, equipment and training facilities.
One of the recipients, St Helens Chamber, received a £93,000 capital grant from LCRCA in 2019 for “digital equipment”.
The chamber entered insolvency last year after the Education and Skills Funding Agency pursued a £550,000 clawback linked to apprenticeship funding claims.
LCRCA invested in St Helens Chamber through an approved £16 million capital grant programme, £4.3 million of which went to ITPs.
Most of these ITPs were local charities such as a local youth association, group training association and community trust.
A spokesperson for the authority said it carries out due diligence, financial health checks and regular reviews before and after investments.
Most grant funding capital agreements include conditions that money could be clawed back if pre-agreed outcomes were not achieved. They are also handed out on the basis that each capital project has a natural lifecycle that expires after an agreed timeframe.
It is not clear, however, what level of protection or guarantee public bodies receive to recoup capital grants, buildings or equipment when a private provider goes bust.
LRCA’s spokesperson said: “Capital investments, whether through ITPs or grant-funded, have a natural life where it is realistic to expect ongoing impacts and benefits to learners, typically around five years, and this is agreed with the training provider at the outset to ensure they are committed to delivering skills provision for this time period.”
Divad Training Ltd, a London apprenticeship provider, was awarded £40,000 from the Greater London Authority’s emergency Covid capital fund in 2020.
The company collapsed three years later with unpaid debts. Its owner, David Obodoechina-Joseph, was later disqualified from acting as a company director for six years.
In total, the GLA said it invested £2 million in 16 ITPs, including a £677,000 grant to The Clink Charity, which trains prisoners in catering skills, to set up an events arm.
It also handed grants of up to £350,000 to privately-owned ITPs delivering construction training, railway safety and IT skills.
A GLA spokesperson said Divad Training was accepted for its £40,000 grant in 2020 after a “full application process”, including questions about its registration on the apprenticeship provider register and Ofsted performance.
The terms of the grant agreement allowed for the funding to be clawed back if agreed “outcomes” were not achieved, including insolvency, according to the spokesperson.
No further details were provided about the supposed protections the GLA has in the case where a private provider goes bust.
The GLA did not confirm whether the authority recovered any funding from Divad Training after it went insolvent.
Hina Bokhari, a Liberal Democrat member of the London Assembly, said the cases show there must be a “high” threshold for due diligence before public money is awarded to private providers.
“That means thorough financial checks, robust monitoring and clear safeguards so public funds can be recovered if providers fail,” she added.