MD3357 Adult Skills Fund: 2025-26 Expenditure Budget and 2023-24 Annual Report to the Department for Education

2025-26 Budget
1.1     On 31 January 2025, the DfE wrote to the GLA to confirm that London’s ASF allocation for the 2025-26 academic year (AY) will be £311,930,838 for the main annual grant and a further sum of £21,984,704 for Free Courses for Jobs (FCFJ) funding.
1.2    The total income budget for the 2025-26 AY is therefore £333,915,542, split across financial years (FYs) as follows: 
•    £207,953,892 and £14,656,469 for ASF and FCFJ respectively (a total of £222,610,361) for August 2025 to March 2026 (sum to be received in April 2025)
•    £103,976,946 and £7,328,235 for ASF and FCFJ respectively (a total of £111,305,181) for April to July 2026 (sum to be received in April 2026).
1.3    In addition to the remaining payments for the ongoing AY (April to July 2025) which will be received in April 2025 of £111,992,372, the 2025-26 FY income budget is therefore £336,988,400. This amount does not include any remaining sums from the previous or current year, which will be carried forward as part of the GLA’s end of financial year process. ASF expenditure of £343,434,395 in the 2025-26 academic year is proposed, comprising:  
•    £7,583,996 in the 2025-26 financial year, on funding for research, communications and engagement activity, Boosting Capacity in the Further Education Sector activity, and the London Union Learn Programme, as set out at Annexes B-D and costs for staffing, evaluation, contract management systems, provider audits, legal services and continuation of the London Learner Survey
•    £1,754,701 on Learner Engagement programmes in the 2025-26 financial year including: £1,004,701 for the continuation of the Community Outreach Programme into the 2025-26 financial year as set out at Annex E and £750,000 in additional grant funding to London & Partners as a contribution to the costs of its standalone skills brokerage service as a part of Grow London Local, as set out at Annex F
•    £750,000 as a contribution to the Mayor’s Skills Academies programme extension in 2025-26, as set out at Annex H
•    £2 million of ASF as a match funding contribution to the UKSPF People & Skills bespoke intervention ‘Support for Young Londoners’ in the 2025-26 financial year as set out at Annex G (which will also be subject to a separate decision form)
•    final allocations to ASF grant-funded providers (specific approval for which is being sought under a separate decision form - MD3356). 
1.4    The profiles for both AY and FY are presented in paragraphs 2.6 and 2.7. The activities in the annexes may be set out on an AY or FY basis dependent on how the relevant programme of activity is administered.
1.5    Final allocations to grant-funded providers are considered under a separate decision form (MD3356).
1.6    Further details are set out in section 2 of this decision form and in annexes as noted. 

Annual Report to HM Government regarding the delivery of delegated adult education functions
1.7    The exercise of delegated adult education functions: Guidance for the Mayor of London and Greater London Authority (“the London Guidance”) states that the Mayor must provide government with an Annual Report each year as follows: in January, an indicative draft, incorporating the key financial information; and in March, the fully signed document covering delivery of adult education functions in Greater London. 
1.8    As specified by the London Guidance, the Annual Report should include information about, but not be limited to:
•    the Mayor’s policies for adult education
•    expenditure from the ASF
•    analysis of the Mayor’s delivery of the adult education functions in Greater London. This can draw on published data from DfE and use other data where necessary to present this analysis 
•    local impact – it should consider the impact the Mayor’s exercise of adult education functions has had upon skills in Greater London, with regard to: 
o    overall participation in ASF funded provision
o    number of learners exercising their statutory entitlement to full funding for: 
    English and maths up to Level Two 
    first full Level Two (learners aged 19-23)
    first full Level Three (learners aged 19-23)
o    completion and achievement rates.
1.9    The Mayor is also encouraged to produce further monitoring and evaluation which goes beyond the datasets the DfE publishes annually, such as relevant employer or learner surveys. An update on the draft Annual Report is outlined in paragraphs 2.13 and 2.14 and the full Report is attached at Annex A.

2.1    The ASF funds the delivery of education and training for adult learners aged 19+ through a range of provider types including general Further Education (FE) colleges, local authorities, independent training providers, sixth form colleges and universities. The annual objective remains unchanged in ensuring that the funding is fully allocated in time to support Londoners to benefit from appropriate training, education and associated interventions. 
2.2    There were 223,820 GLA-funded learners in London during the 2023-24 AY (a reduction of three per cent compared to 2022-23), that enrolled in 487,700 qualifications (an increase of 600 compared to 2022-23). The data suggests that, since delegation in 2019, the increase in enrolments in England has been driven by the positive performance of London.
2.3    2023-24 AY delivery showed positive impacts of the ASF flexibilities introduced by the Mayor to support London’s economic recovery: 24,960 Londoners made use of the Mayor’s low-wage flexibility, which helps people earning less than the London Living Wage gain skills through the ASF; around 18,200 learners out of work and outside benefit arrangements enrolled in 39,110 qualifications; and 2,900 adults gained skills through Level Three qualifications introduced by the Mayor to help people impacted by the pandemic.
2.4    The main ASF grant providers are asked to present a delivery plan ahead of the start of each AY. The Jobs and Skills grant providers commenced delivery in August 2023 and have supported 42,554 learners over 62,272 enrolments.
2.5    The M&A spend enables the GLA to have the required staff to manage the ASF effectively. The independent annual evaluation report has shown providers have continued to be positive about the GLA’s management of the ASF. Overall, they thought that delegation is enabling closer alignment between local and Mayoral skills priorities and a stronger strategic direction for skills policy in London.
ASF 2025-26 AY expenditure forecast 
2.6    The total indicative income for the 2025-26 AY is £333.9 million including the ringfenced FCFJ allocation. The table below shows the proposed breakdown of spend for the 2025-26 AY:

*The total funding does not include previous underspend carried forward.
2.7    The 2025-26 AY forecast is higher than the income received from the DfE. This is due to the reduced allocation from the DfE. Additional spend of £9.5 million will be funded from ASF reserves.
Budget implications for 2025-26 FY
2.8    The table below shows the proposed expenditure profile for the full FY taking into account the forecast for April to July 2025 previously approved by the Mayor under cover of MD3252.

*The total funding does not include previous underspend carried forward.

2.9    The 2025-26 FY forecast is higher than the income received from the DfE. As noted in paragraph 2.7 above, additional spend will be funded from ASF reserves.

2.10    The overall ASF budget forecast for the 2025-26 FY includes the following:
•    £7,583,996 for non-direct delivery costs for M&A in the 2025-26 FY which includes funding for research, communications and engagement activity, Boosting Capacity in the Further Education Sector activity and the London Union Learn Programme, as set out at Annexes A-D. The M&A forecast also covers spend on staffing, research and evaluation, contract management system, provider audits, provider engagements, legal services, as well as continuation of the London Learner Survey into the 2025-26 academic year as outlined in MD3192.
•    £1,754,701 of non-direct delivery costs for the next round of the Learner Engagement Programmes which includes:
o    £1,004,701 for the continuation of the Community Outreach Programme into the 2025-26 academic year as set out at Annex E. A further £100,000 of non-ASF grant funding is proposed to be allocated from the Skills Bootcamps programme (approval of which will be sought from the Assistant Director – Skills & Employment Delivery pursuant to the Mayor’s delegation of authority recorded in MD3344).
o    expenditure of £750,000 in grant funding to London & Partners as a contribution to the costs of its Grow London Local skills brokerage project, as set out at Annex F. A further £100,000 of non-ASF (Skills Bootcamps programme) grant funding is also proposed to be incurred on the Grow London Local skills brokerage project for the 2025-26 academic year (approval for which will be sought from the Assistant Director – Skills & Employment Delivery pursuant to the Mayor’s delegation of authority recorded in MD3344).
•    £750,000 for the Mayor’s Skills Academies (MSA) programme as a match funding contribution towards the extension of Phase One of the programme to March 2026. Further detail is set out at Annex H, and funding will be subject to a further Mayoral Decision.
•    Final allocations to ASF grant-funded providers (specific approval for which is being sought under a separate Mayoral Decision, MD3356).
•    Funding for the Young Londoners Not in Education, Employment or Training (NEET) Programme, which includes £2 million Adult Skills Fund to match to the UKSPF People & Skills bespoke intervention for delivery in the 2025-26 financial year (specific approval for which will be sought under a separate decision form).
2.11    Based on the commitment of the GLA to improve efficiencies across its operations, GLA officers are regularly monitoring the M&A to ensure value for money is always maintained. Planned M&A expenditure for AY is planned at eight per cent lower than the previous year with the aim of achieving efficiency savings that allow for more funding to be available for direct delivery. 
2.12    The total underspends from the 2024-25 FY will be managed within the GLA’s end of year financial processes and carryovers applied to 2025-26 FY or future years as appropriate. 

Annual report to HM Government regarding the delivery of delegated adult education functions
2.13    As required under the London Guidance (see paragraph 1.4 above), officers submitted a ‘draft’ Annual Report to HM Government in January 2025. A revised version of the report was considered by the ASF Mayoral Board at its 24 March 2025 meeting.
2.14    The final report set out at Annex I mainly reports on the fifth full year of delivery from 1 August 2023 to 31 July 2024 with a focus on priorities for delegated adult education, policies and interventions, monitoring and evaluation, local impact and spend.
 

Section 149(1) of the Equality Act 2010 provides that, in the exercise of their functions, public authorities, of whom the Mayor is one, must have due regard to the need to: 
•    eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act 2010
•    advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it
•    foster good relations between persons who share a relevant protected characteristic and persons who do not share it.
3.2    Relevant protected characteristics are age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, sex and sexual orientation. 
3.3    The Mayor is required to comply with the duty set out above in making the decisions set out in this report and any future decisions relating to the ASF made pursuant to those arrangements which will be subject to separate decision forms.
3.4    The aim of the ASF is to improve opportunities for people who are disadvantaged in the labour market. Many potential ASF participants have the protected characteristics listed above. The GLA’s ASF provision will support a range of groups, particularly the most disadvantaged people not currently receiving sufficient support into employment or education. These include young adults who are NEET, people without basic skills and people who are workless. It will also support Londoners in low-paid or low-skilled jobs.
3.5    The publicity and community engagement proposed for the new year, whilst directed at all Londoners, will target hard-to-reach groups to ensure they have access to the training, education and employment support opportunities. Following the successful introduction of the Community Outreach Programme in the 2022-23 FY, and subsequent delivery from 2023-24 and 2024-25 academic years, the programme is proposed to continue to further reach more Londoners into 2025-26 academic year. The GLA has established an inclusive commissioning protocol which provides guidance for commissioning and procurement in such a way that avoids discriminating against any suppliers or education providers.
 

Risks arising/mitigations
4.1    The Memorandum of Understanding with the DfE states that underspends will be recovered by the Secretary of State in circumstances where the Secretary of State considers funds have not sufficiently been committed to be spent. This presents a risk for the GLA in addition to the reputational risk to the GLA of not being able to discharge its responsibility for the benefit of Londoners.
4.2    Officers regularly review underspend profiles, identifying new ways to use funding and making recommendations to the Mayor. The 2025-26 DfE allocation has been fully allocated as presented at paragraph 2.6 above. 

Links to Mayoral strategies
4.3    Successful delivery of the ASF will be critical in achieving the Mayor’s vision for increasing London’s growth and productivity, which is set out in the London Growth Plan. ASF provides essential skills and progression pathways, which are critical to ensuring that people can access work in key sectors in the economy and to filling skills gaps. The Inclusive Talent Strategy, a key action from the Growth Plan, will further set out the role of adult skills in growing London’s skilled workforce, getting more Londoners into quality jobs and transitioning to a more employer-led system.
4.4    ASF is also central to the Mayor’s Supporting Londoners to Benefit from Growth programme. In particular, the Essential Skills and Progression Pathways and Green Skills strategies, currently in development, will provide a more technical focus than the Inclusive Talent Strategy on how ASF and other skills programmes best aid access to essential skills (including English for Speakers of Other Languages (ESOL), help meet the Mayor's net zero ambition and grow London's skilled green workforce. The ASF-procured programme will also provide an important way to establish sector-focussed talent pipelines.
Other 
4.5    Budget reprofile: Future reprofiling will generally be agreed through the GLA’s budget management processes and presented to the ASF Mayoral Board. Any transfers between the top-level ASF budget lines (see table at paragraph 2.6 above) or matters reserved within the ASF Assurance Framework for the Mayor, will be approved as per the GLA’s decision-making process. 
4.6    There are no conflicts of interest to declare from those involved in the drafting or clearance of this decision form. 
4.7    Procurement of services and grant commissioning will be completed competitively in line with all legal requirements and the GLA Contracts and Funding Code. Grant and contract recommendations within the scope of this decision form will be signed by the relevant Assistant Directors - Skills and Employment as part of the local management arrangements and in line with the ASF Assurance Framework.
    Subsidy control
4.8    The Subsidy Control Act 2022 requires that grant funding comply with its subsidy control principles. Officers have assessed L&P’s Grow London Local skills brokerage project and are satisfied that the proposed award of funding to London & Partners in this regard aligns with the seven subsidy control principles as set out below:
·    the subsidy pursues the following specific policy objective: 
o    Grow London Local, run by London & Partners, is the ‘single front door’ for business support, matching entrepreneurs to the help, including skills, that they need to grow. The skills element of the project connects small and medium-sized enterprises (SMEs) to skills and employment provision and support. This funding will help to further increase productivity and growth across the capital by addressing skills gaps for small businesses and upskilling Londoners to progress in work and achieve higher incomes 
·    there is no direct benefit to the beneficiary as no profit is allowable under the terms of the grants and so the subsidies’ beneficial effects outweigh any negative effects. Business support is not a statutory obligation and therefore without the grant the activity will not take place 
·    this project would not be pursued in the absence of the subsidy, leading to the Fund’s policy objectives not being achieved and support not being delivered. The proposal has been designed to achieve the specific policy objective and as such there is low risk of the subsidy producing negative effects on competition or investment within in the United Kingdom.

5.1    Approval is sought for ASF expenditure of £343,434,395 for the 2025-26 AY, which includes:
•    up to £7,583,996 for M&A costs for the 2025-26 financial year
•    £1,754,701 for Learner Engagement programmes in the 2025-26 financial year including: £1,004,701 for the continuation of the Community Outreach Programme into the 2025-26 financial year as set out at Annex E; and expenditure of £750,000 in grant funding to London & Partners as a contribution to the overall funding for the extension of the standalone skills brokerage service as a part of Grow London Local, as set out at Annex F
•    £2 million as a contribution to the UKSPF People & Skills bespoke intervention ‘Support for Young Londoners’ for delivery in the 2025-26 financial year (subject to a separate mayoral decision), as set out at Annex G
•    £750,000 as a contribution to the Mayor’s Skills Academies programme extension in 2025-26, as set out at Annex H.
5.2    In addition to the remaining payment for the ongoing AY (April to July 2025) previously approved under the cover of MD3252, this will take the total expenditure in the 2025-26 FY to £344,330,326 as set out in the table at paragraph 2.8 of this MD.
5.3    The total expenditure for the 2025-26 AY will be funded from the confirmed 2025-26 AY allocation set out in the 31 January 2025 ASF funding letter from the DfE. The ASF allocation from the DfE of £333,915,545 for the 2025-26 AY is broken down as £311,930,838 for the main annual grant provision for the 2025-26 AY and £21,984,704 for the Free Courses for Jobs (FCFJ) funding.
5.4    The 2025-26 ASF AY expenditure forecast outlined in paragraph 2.6 above totalling £343.4 million is £9.5m higher than the income to be received from the DfE of £333.9 million for the 2025-26 AY. This is due to the reduced allocation from the DfE and continuing to serve the skills sector in London. Additional spend will be funded from previous year’s underspend carry forward.
5.5    Approval is also sought for the Mayor’s Annual Report to HM Government on the delivery of the delegated Adult Skills functions (see Annex I) for submission to the DfE by 31 March 2025.
5.6    The Mayor’s Annual Report as set out in Annex I shows an ASF overspend against the annual DfE income is expected from end of year reconciliation and a circa £2.3 million FCFJ underspend is expected. ASF over-delivery payments to providers will be funded from reserves from previous years’ underspends as planned, whilst FCFJ underspends will be returned to the DfE as per the requirement of the ringfenced funding. 
 

6.1    Section 39A of the Greater London Authority Act 1999 permits the delegation of ministerial functions to the Mayor, subject to certain limitations and conditions. This forms the basis of the delegation to the Mayor of Adult Education Budget functions from the Secretary of State for Education. A particular limitation of the delegation is that the usual power of delegation by the Mayor is not available in respect of section 39A delegated functions. Under associated “London Guidance” the Mayor must also provide government with a final signed Annual Report in March each year.  
6.2    In taking the decisions requested, the Mayor must have due regard to the Public Sector Equality Duty - namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity and foster good relations between persons who share a relevant protected characteristic (race, disability, sex, age, sexual orientation, religion or belief, pregnancy and maternity and gender reassignment) and persons who do not share it (section 149 of the Equality Act 2010). To this end, the Mayor should have particular regard to section 3 (above) of this report.
6.3    The Subsidy Control Act 2022 requires that grant funding comply with its subsidy control principles. Subject to section 6.5(e) below, the officers have set out at paragraph 4.8 above how the proposed grant complies with those principles.
6.4    If the Mayor makes the decisions sought officers must ensure: 
(a)    that no reliance is placed upon underspends and/or future years budgets until they have been definitively confirmed as being available for use
(b)    where expenditure has been indicated as being subject to separate decision forms, no commitment is made to it until those decisions have been made
(c)    where the expenditure concerns the purchase of services, suppliers or works they are procured in liaison with TfL Procurement in accordance with the Contracts and Funding Code and appropriate contract documentation is put in place between and executed by the GLA and contractors before commencement of those services
(d)  where the expenditure concerns the award of grant funding, such award is made fairly, transparently, in accordance with the GLA’s equalities requirements and with the requirements of GLA’s Contracts and Funding Code and funding agreements are put in place between and executed by the GLA and recipients before any commitment to fund is made (including, without limitation, an agreement/variation of the current agreement with L&P concerning Grow London)
(e)    that the grant of additional funding to London & Partners is registered on the Department for Business and Trade’s Transparency Database 
(f)    the GLA continues to comply with the requirements of the London Guidance, the Secretary of State for Education’s delegation to the Mayor and related Memorandum of Understanding as in place from time to time.
 

7.1    The profiles to be reflected in the 2025-26 GLA: Mayor Budget.
7.2    The Mayor’s Annual Report to the DfE (Annex I) will be submitted to the DfE by 31 March 2025.
7.3    Delivery and expenditure on the M&A and Learner Engagement programmes, including those outlined in the Annexes, will commence.