Adult Skills Fund national contracts end in 2027, and the government does not plan a national replacement. In its 30 September 2026 update, the Department for Education (DfE) said current procured contracts for services “will expire on 1 August 2027”. It added: “We do not intend to carry out a national procurement exercise for the 2027 to 2028 academic year.”
The change is narrower than some coverage suggests. It affects providers delivering under procured contracts in non-devolved areas. The DfE says it “will not impact providers with grant funding agreements”, and areas with devolved budgets already work with their own authority.
This guide separates what is confirmed from what is only press-reported and what nobody has published yet (as of October 2026). It then gives a transition checklist for providers and a question list for employers and L&D buyers. It is not legal or funding advice, so check your own funding agreement.
What has the DfE actually announced about Adult Skills Fund contracts?
On 30 September 2026 the DfE announced that procured Adult Skills Fund (ASF) contracts for services expire on 1 August 2027 and will not be replaced by a national procurement for 2027 to 2028. Funding delivered through them in non-devolved areas moves to local authorities.
The official wording, from the DfE’s further education update, covers four points:
- Expiry: procured contracts for services “will expire on 1 August 2027”.
- No national replacement: “We do not intend to carry out a national procurement exercise for the 2027 to 2028 academic year.”
- New commissioners: funding previously delivered through directly procured contracts in non-devolved areas “will transfer to local authorities”.
- Grant-funded providers: “This change will not impact providers with grant funding agreements.”
The update names no commissioner for any specific area, no transfer amounts and no per-council dates. FE Week’s report on the announcement adds sector reaction and funding history, covered below.
What are nationally procured Adult Skills Fund contracts?
They are contracts for services, procured nationally, under which providers deliver ASF-funded adult training to people living outside devolved authority areas. The 2026 to 2027 funding rules call them a “DWP funded ASF contract for services”, procured from August 2023, and treat them separately from grant agreements.
Two departments appear in this story. The same funding rules say “we” means “the Secretary of State for DWP acting through DfE”. That is why the announcement comes from the DfE while the funding is described as DWP funded. The rules are in the 2026 to 2027 ASF funding rules.
Which providers are affected by the end of national ASF contracts?
Providers holding a procured ASF contract for services in a non-devolved area are affected, because their contract expires on 1 August 2027. Grant-funded providers are not, according to the DfE. Other groups depend on what their own agreements say, and the sources are silent on some.
| Your situation | Effect of the announcement | Basis |
|---|---|---|
| Procured ASF contract, non-devolved area | Contract expires 1 August 2027; no national replacement | DfE update, 30 September 2026 |
| ASF grant funding agreement | Not impacted by this change | DfE update, 30 September 2026 |
| Provider in an already devolved area | Not the subject of this change; your funder is the devolved authority | ASF rules: funding applies to people resident outside devolved areas |
| Subcontractor to a national contract holder | Not addressed in the sources reviewed; ask your lead provider | Gap in published material |
| Employer buying ASF-funded training | No direct contract, but indirect risk if the provider relies on a procured contract | Our reading, not an official statement |
How much has national ASF funding already fallen?
FE Week reported on 30 September 2026 that national ASF contracts fell from £77 million in 2023-24 to £37 million in 2025-26, while provider numbers dropped from 57 to 45. Some providers saw allocations fall by as much as 90 percent. These figures are press-reported, not part of the DfE update.
For scale, FE Week’s April 2026 devolution budgets report put devolved funding at 77% of a national budget of roughly £1.4 billion for 2026-27. Against that, £37 million is about 3% by our arithmetic. The years differ, so treat it as rough scale only.
A small slice of the national budget can still be a large share of one provider’s income. The 45 providers are the ones who lose a national route to market.
Who will fund adult skills in non-devolved areas after August 2027?
Local authorities, according to the DfE. It says funding “will transfer to local authorities” and that they “can commission appropriate providers to deliver the right training for their area”. It also says more areas take responsibility each academic year, so the proportion funded in non-devolved areas keeps shrinking.
For 2026-27, FE Week reported that seven areas receive devolved adult skills funding for the first time, worth £120 million across ASF and Free Courses for Jobs. They are Lancashire, Greater Lincolnshire, Hull and East Yorkshire, Devon and Torbay, Surrey, Warwickshire and Buckinghamshire.
FE Week also reported tighter ringfence rules for authorities without directly elected mayors. That is press-reported detail, so confirm it against each authority’s grant terms.
One question stays open: whether every non-devolved area will have a commissioner by 1 August 2027. The DfE’s wording does not say. Ask your local authority rather than assume.
What happens to learners who are still mid-program on 1 August 2027?
Under the rules for 2026 to 2027, providers “must not recruit learners after” the expiry date in their funding agreement. The funder “may extend the contract period” so earlier recruits can finish. That power is discretionary and sits in the current rules. The 30 September update does not say how 2027 will be handled.
The funding rules put it this way: “Your funding agreement states the expiry date of this contract and you must not recruit learners after this date.” They add that the funder may extend the contract “to give learners recruited prior to the relevant expiry date the necessary period to complete their learning programmes”.
Plan Backwards From Program Length
Set your last safe start date as 1 August 2027 minus the longest program you run, and treat any extension as upside rather than a plan. Learners who start later than that date are the ones at risk of a funding gap.
What does local commissioning look like in practice?
It varies by council, so treat any one example as a single data point. Warwickshire County Council, newly devolved for 2026 to 2027, grants funding to statutory institutions and runs mini-competitions for independent providers under a dynamic purchasing system, with contracts for one academic year, paid monthly in arrears against actual delivery.
That comes from Warwickshire’s published adult skills plan. It says delivery is focused on key growth sectors identified through the Local Skills Improvement Plan, and that payments are reconciled against submitted data returns. The council also says engagement with employers and providers will take place “throughout 2026 and 2027”.
For a provider used to one national contract, the practical shift is clear. You may hold several shorter contracts, each with its own priorities, reporting and payment terms. For related UK skills reading, see our piece on the union learning fund and local apprenticeship service.
Are local authorities ready to commission adult skills?
No published assessment answers this for the non-devolved councils, so any answer is a judgment. Sector voices split. AELP chief executive Ben Rowland sees a possible fit with local needs, while Leep Group chief executive Luke Muscat raises capacity concerns and says the extra administration is the provider’s challenge to manage.
As quoted by FE Week, Rowland called it a “significant change for independent training providers and other providers without guaranteed contracts”. He said local commissioning “could better align provision with local skills needs”, but also “changes how providers access the market”.
Muscat said it should “not come as a surprise” and that managing several smaller local contracts brings “more administrative pressure than delivering one national programme”. He called that “our challenge to manage”. He also questioned whether every new commissioning authority “has the capacity to succeed”.
Our reading: both views can hold at once. Readiness will differ by council, so the best evidence is each council’s own commissioning documents, such as a published plan, a purchasing system or consultation dates. A council with none of these by early 2027 is a risk to price in.
What should training providers do before 1 August 2027?
Start with your own agreement, then map where your learners live, then build local relationships before tenders open. The checklist below is ordered by timing, from now to spring 2027. It is our practitioner suggestion based on the published documents, not DfE guidance.
- Now: read your funding agreement and note the expiry date, recruitment cut-off and any extension wording.
- Now: map learners by home local authority, because ASF funding follows the learner’s residence outside devolved areas, not your site location.
- By early 2027: find each council’s route (commissioning strategy, purchasing system, grant or consultation) and register on its procurement portal.
- By early 2027: build an evidence pack of outcomes, progression and quality data, using clean records of tracking enrollment, attendance and completion data.
- By spring 2027: stress-test your 2027-28 income against losing most national ASF funding, as some providers already saw cuts of up to 90 percent.
- By spring 2027: set last start dates and write a teach-out plan for learners who will not finish.
For the commercial side of running a provider, see our guide on how to run a training business.
What should employers and L&D buyers ask a provider about contract continuity?
Ask which funding agreement pays for your learners, what the last start date is, and what happens to anyone unfinished on 1 August 2027. Grant agreements are unaffected, while procured contracts have no national renewal route. Get the answers in writing.
| Question to ask | Why it matters | A reassuring answer |
|---|---|---|
| Which funding agreement covers these learners? | Grant agreements are not affected; procured contracts expire on 1 August 2027 | Agreement type and expiry date stated in writing |
| What is the last start date for this program? | Providers must not recruit after the expiry date | A date that lets learners finish, or a named alternative funding route |
| Which councils will you bid to, and where are you registered? | Funding transfers to local authorities | A named list with the status of each route |
| What happens to a learner unfinished on 1 August 2027? | Contract extensions are discretionary under the current rules | A written teach-out plan that does not rely on an extension |
| Does any delivery depend on a subcontractor? | The sources do not cover subcontract arrangements | A clear answer on which end date applies |
| Can we switch to another funded or employer-paid route? | Avoids a stranded cohort if funding stops | A priced alternative, agreed in advance |
Write It Into Your Contract
A reassurance in a sales meeting is not a commitment. Put the funding end date and a teach-out clause into your own purchasing agreement, especially if you place several cohorts across the 2026 to 2027 year.
For a wider view of contract-based versus open-market work, see our comparison of training contracts versus open enrollment.
What is still unconfirmed about the 2027 changes?
Several planning points are missing from the official and press sources reviewed as of October 2026. Until they appear, treat the points below as open questions rather than assumptions, and ask your funder or local authority directly. Each one could change your 2027-28 plan.
- Which authority will commission each currently non-devolved area.
- How much funding transfers, and in what form.
- Whether all non-devolved areas will have a commissioner by 1 August 2027.
- How learners mid-program on 1 August 2027 will be treated.
- How subcontractors to national contract holders are affected.
The headline facts are not in dispute: the DfE text and FE Week agree on the expiry date, the lack of national procurement and the move to local authorities. Trust the DfE wording for dates and obligations, and FE Week for funding history and reaction.
What should you do next?
This week, pull your funding agreement and highlight three things: the expiry date, the recruitment cut-off and any extension wording. Then list the local authorities where your learners live and check each council’s website for a commissioning strategy or purchasing system.
If you buy training rather than deliver it, send the six questions above to your provider before the next intake. Ask for the reply in writing and file it with your contract.
Check the DfE update page again before any decision, because further detail may follow. Re-verify any figure in this guide against the source before you rely on it.
FAQ
Q1. When do Adult Skills Fund national contracts end?
The DfE’s 30 September 2026 update says current procured Adult Skills Fund contracts for services will expire on 1 August 2027. Check your own funding agreement, because it states your exact expiry date and any rules on recruiting learners near that date. Grant funding agreements are treated separately and are not covered by this change.
Q2. Will there be a new national Adult Skills Fund procurement for 2027 to 2028?
No. The DfE says it does not intend to carry out a national procurement exercise for the 2027 to 2028 academic year. Instead it plans to keep expanding the ASF pathway to devolution, so funding in non-devolved areas moves toward local authorities. Providers will need local routes into funding rather than a national renewal.
Q3. Who will commission adult skills training in non-devolved areas after August 2027?
According to the DfE, funding previously delivered through directly procured contracts in non-devolved areas will transfer to local authorities, which can commission providers for their area. The update does not say which authority covers which area, how much money moves or when each council starts. Ask your local authority for its commissioning plans.
Q4. Are grant-funded providers affected by the end of national ASF contracts?
The DfE states that this change will not impact providers with grant funding agreements. The announcement concerns procured contracts for services in non-devolved areas. If you are unsure which type of agreement you hold, check the documents issued by your funder, because the two types are managed under separate arrangements in the ASF funding rules.
Q5. What happens to learners who start before the contracts end?
The 2026 to 2027 ASF rules say providers must not recruit learners after the contract expiry date, and that the funder may extend the contract so learners recruited earlier can finish. That power is discretionary, and the 30 September update does not say how it will apply in 2027. Plan last start dates carefully.
Q6. How much has national Adult Skills Fund money fallen?
FE Week reported that national contracts were cut from £77 million in 2023-24 to £37 million in 2025-26, and that provider numbers fell from 57 to 45. Some providers saw allocations drop by as much as 90 percent from the first year. These figures come from press reporting rather than the DfE update itself.
Q7. What should an employer ask a training provider about this change?
Ask which funding agreement pays for your learners, what the last start date is, which councils the provider will bid to and what happens to anyone unfinished on 1 August 2027. Request written answers. A provider on a grant agreement is not affected by this change, while one on a procured contract has no national renewal route.
