Devolution of adult skills funding: what providers need to know

Decisions about adult skills funding in England are increasingly being made closer to the communities and employers that training is intended to support. For colleges and training providers, understanding who commissions provision, what their priorities are and how funding can be used is becoming an essential part of curriculum and business planning.

A recent announcement makes this particularly relevant. On 30th September 2026, the Department for Education confirmed that it does not intend to carry out a national Adult Skills Fund procurement exercise for the 2027/28 academic year. Current procured contracts expire on 1st August 2027, and funding previously delivered through directly procured contracts in non-devolved areas will transfer to local authorities through the pathway to devolution programme. The announcement explicitly states that this change will not affect providers with grant funding agreements.

For affected providers, announcements like this create an immediate reason to understand local commissioning arrangements. It also raises a broader question: how can greater local control over funding translate into better opportunities for learners?

What does devolution mean?

In adult skills, devolution means transferring responsibility for certain funding and decisions from central government to local or regional authorities. The intention is to allow provision to respond more closely to local skills needs, employment opportunities and economic priorities.

The English Devolution and Community Empowerment Act, which received Royal Assent in April 2026, has introduced Strategic Authorities into law: a new category of authority designed to make it easier and quicker to devolve powers away from Westminster to local government (including Combined Authorities and The Greater London Authority). It also requires Mayoral Strategic Authorities to develop local growth plans, connecting regional economic priorities with national policy.

• Foundation Strategic Authorities/FSAs: Available to Authorities without an elected mayor. Limited devolution. Includes non-mayoral Combined/County Authorities and single councils..

• Mayoral Strategic Authorities/MSAs: Available to areas with an elected mayor. Greater devolution.

• Established MSAs: MSAs that meet specified eligibility criteria (e.g. they’ve existed with a Mayor for 18+ months) may be designated as Established MSAs, unlocking further devolution (incl. an Integrated Settlement).

However, devolution is not a single, uniform arrangement. Authorities have different powers and funding mechanisms, so providers need to understand the arrangements in each area where they deliver.

How is funding changing?

Two developments are particularly important: single adult skills allocations and Integrated Settlements.

Some Strategic Authorities (including FSAs, MSAs) have responsibilities for administrating Adult Skills Fund/ASF and Free Courses for Jobs/FCFJ grant allocations in their devolved areas. For Skills Bootcamps/SBs, other non-devolved local areas without a mayor continue to be grant funded.

For Established MSAs, Integrated Settlements bring funding across several policy areas into a common framework (e.g. Adult Skills and Employment Support [ASF, FCFJ, SBs]), providing greater flexibility to allocate funding within agreed themes and (subject to controls) between them. Authorities remain accountable for agreed outcomes and their statutory responsibilities.

Published settlements for 2026/27 to 2029/30 cover Greater Manchester, West Midlands, West Yorkshire, South Yorkshire, Liverpool City Region, Greater London and the North East; Cambridgeshire & Peterborough, East Midlands, West of England and York & North Yorkshire are also set to be granted Established MSA status (‘Rewiring the State’). These settlements provide a multi-year funding framework for these Authorities, although this should not be interpreted as a guarantee of multi-year contracts for individual providers.

Importantly, an Integrated Settlement does not automatically mean more funding. Its central purpose is to change how funding is organised and used, giving Authorities greater flexibility to respond to local priorities. New relevant funding can also be brought into settlements.

What could this mean for providers?

One of the key practical implications is that providers should be prepared to demonstrate how their offer meets the needs of the area commissioning it.

This means looking beyond whether a course is eligible for funding. Providers should continue to consider the employers they support across priority sectors, the localised barriers facing potential learners and the progression opportunities available regionally for learners after completion.

For example, where construction is a local priority, a convincing offer would explain how training connects with employer demand, prepares learners for relevant roles and supports progression. Where residents face significant barriers to employment, provision may need to combine foundational learning with confidence building and practical support.

Local employer relationships are especially important throughout programme development. They can help providers understand recruitment needs, design relevant learning and establish credible routes into work.

Evidence of local impact should also inform planning. Achievement remains important, but providers should consider how they will demonstrate sustainable progression into further learning, employment or greater responsibility at work at a local/regional level.

Balancing local flexibility with accessible provision

Greater local flexibility offers an opportunity to connect skills provision with wider priorities, including employment, housing and transport. It could help Authorities and providers develop more coherent support around the circumstances of their residents. Integrated Settlements are expected to inform skills planning in several ways, including providing multi-year funding certainty; fostering collaboration within the skills ecosystem; aligning skills investments with regional growth strategies/priorities; and targeting sector-specific skills shortages.

However, local responsiveness also needs to be balanced with accessibility and consistency.

Providers operating across several areas may encounter different commissioning priorities, funding rules and reporting requirements. E.g. some MSAs have moved away from Skills Bootcamps provision via their Integrated Settlements. This can create additional administrative work, particularly for smaller organisations.

Learners and employers also cross administrative boundaries. Providers should check residency and delivery requirements carefully, rather than assume that arrangements in one area apply in another.

There is a further consideration around inclusion. Addressing immediate workforce shortages is important, but a successful skills system must also provide starting points for people who need to develop essential skills, rebuild confidence or return to learning.

Local economic growth and support for those furthest from employment should reinforce one another.

What should providers do now?

Providers can take practical steps to prepare:

• Map their funding arrangements. Identify which provision is funded through national contracts, grant agreements or local commissioning, and which changes apply.

• Review local priorities. Read relevant skills strategies (e.g. Local Skills Improvement Plans), Local Growth Plans and commissioning documents.

• Engage early. Build relationships with Authority skills teams, employers and potential delivery partners.

• Review the curriculum. Assess how existing provision supports local demand and where new pathways or partnerships may be needed.

• Strengthen evidence. Bring together information on employer need, learner barriers, achievement and progression.

• Monitor opportunities. Track procurement notices and funding guidance for each relevant area.

Devolution creates an opportunity to make adult skills provision more responsive to the people and places it serves. Realising that opportunity will require clear commissioning, strong partnerships and continued attention to quality.

For providers, the priority is to understand the changing arrangements and make a clear case for the contribution they can deliver. For the wider skills system, the measure of success should be whether learners can access provision that helps them progress and employers can develop the skills they need.

By Georgia Deith, Funding and Opportunities Lead, NOCN Group