The future of adult skills contracts for independent training providers is being “contemplated” by the Department for Education.
In a contract notice published this week, the department said it was considering its options for the future of the adult skills fund (ASF) for the shrinking non-devolved areas it serves.
The current £75 million contract was awarded to about 55 training providers, to start in 2023-24, and has since been extended until 2025-26.
The DfE’s update suggested any new procurement beyond July 2027 – the final extension date for the current contract – would be worth an estimated £30 million per year.
It said: “The department is contemplating whether it will procure to replace these contracts, or whether an alternative commissioning approach will be pursued.”
When asked what other approaches it could take, a DfE spokesperson did not rule out expanding a pilot being tested from August that involves local authorities commissioning adult education locally.
Some have interpreted the notice as an early indication that the government will extend the contract beyond the current end date of July 2026 to 2027, the final possible extension year.
Simon Ashworth, deputy chief executive of the Association of Employment and Learning Providers, said extending the contract was a “pragmatic move” that provided continuity and “avoids the disruption and lottery” of another procurement round.
He added: “Looking further ahead to a possible ‘alternative commissioning approach’, we have only just started to pilot additional funding being channelled through a number of strategic authorities. There have been teething problems which need ironing out before doubling down on this approach.”
Contract value to halve
The maximum value of the contract is likely to shrink to £30 million, less than half the current annual value, as adult education is increasingly devolved to regions.
In the next two years, the portion of adult education funding devolved to regions will grow from 60 per cent (£828 million) to at least 70 per cent.
Six new regions also joined the government’s “devolution priority programme” in February, with a view to taking over their adult education budgets after electing regional mayors next year.
Mark Dawe, chief executive of The Skills Network, which currently holds an ASF contract, said the contract notice was “helpful”.
He said: “Certainty of a reducing contract is better than no certainty of a contract staying the same.
“It’s just telling us what we know, that more and more money is going to the devolved authorities.”
Sue Pember, policy director at adult education provider body HOLEX, said the DfE appears to be “covering all bases” by signalling a potential contract extension to 2028 followed by a potential “shift in funding strategy”.
She added officials are “leaving enough ambiguity to adapt” based on other political commitments such as the immigration white paper, local growth plans and local skills improvement plans.
Procurement woes
The DfE has a chequered record in procuring national adult education contracts.
Tender outcomes have typically been delayed, giving successful providers little time to prepare.
Winners of the most recent procurement in 2023 were informed on July 5 that year, and were then subject to a 10-day standstill period for contracts to start that August.
The number of contractors was reduced from 208, to 88 to 55 over consecutive adult education procurement rounds.
Procurements can also spark costly legal challenges. Learning Curve Group settled its 18-month case against the DfE in January for an undisclosed sum after failing to win a contract in 2023.
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