MD3482 Adult Skills Fund: 2026-27 Expenditure Budget, 2024-25 Annual Report to the Department for Work and Pensions and Construction Skills Package Uplift

2026-27, 2027-28 and 2028-29 Budget

1.1    The GLA Integrated Settlement quantum was received in November 2025. The letter confirms the sum of £1,010,965,203 (£336,988,401 per financial year) covering the Adult Skills Fund (ASF) (including Free Courses for Jobs (FCFJ)) and £14,290,746 (£4,763,582 per financial year) for the ASF Construction Package uplift for the 2026-27 to 2028-29 financial years.

1.2    The ASF Sector Based Work Academy Programme (SWAPs) uplift letter was received separately in March 2026 confirming the total funds of £16,505,810 for the 2026-27 to 2028-29 financial years. This includes the following:

•    £1,714,889 for the 2026-27 financial year (FY)
•    £6,216,474 for the 2027-28 FY
•    £8,574,447 for the 2028-29 FY.

The ASF (Including FCFJ) and ASF SWAPs uplift totals to £1,027,471,013 for 2026-27 to 2028-29 financial years, which includes the following:

•    £338,703,290 for the 2026-27 FY
•    £343,204,875 for the 2027-28 FY
•    £345,562,848 for the 2028-29 FY.

1.3    The functional responsibilities for the Integrated Settlements 2026-30 lists the following as core functions of the ASF related funds under the Skills and Employment Support pillar: 

•    All non-apprenticeship adult skills funding and functions, including but not limited to:

o    ensuring that residents aged 19 and over in their area, who are eligible for funding, have access to appropriate education and training
o    encouraging and providing adults with the skills and learning they need to equip them to progress 

•    Working with employers and education providers in the construction sector to deliver bespoke training, sector workforce development activity and increase provision to grow and retain the local construction workforce
•    Ensuring that residents who are over compulsory school age but under 19 or who are aged 19 or over, and for whom an Education, Health and Care plan is in place, have access to suitable education and training (sufficiency of places and diversity of provision)
•    Leadership and co-ordination and provision of services in the area to support young people (aged 19+) who are NEET, or who are at risk of becoming NEET, to access skills support which enables them to move into education, employment or training.

1.4    The ASF expenditure set out in this report funds several projects and workstreams predominantly listed in the Supporting Londoners to Benefit from Growth (SLBG) programme (Mayoral Decision (MD)3395) and hence it plays a significant role in achieving the success measures and objectives of the mandate, and importantly to deliver the aims of the Inclusive Talent Strategy (ITS).

1.5    The core expenditure of £338,703,290 is planned in a such a way to ensure it can be covered within the financial year income to ensure a balanced year budget. Where there is planned unallocated budget, this is allocated as a growth pot which serves both contingencies and funds available to support objectives of ITS and the London Growth plan.     

1.6    Additionally, one time expenditure included in this decision is also funded from ASF reserves which supports two projects under the Supporting and Inspiring Young Londoners (SIYL) programMD3380): Project 4.2 Employment and training opportunities for young people who are or are at risk of becoming NEET (Not in Employment, Education, or Training) and the London Careers Hubs workstreams listed under project 4.3. 

1.7    For both the SLBG and SIYL programmes, the funding now available under the Integrated Settlement is an update from those listed in the delivery plans considering the confirmation of the Integrated Settlement funds after the approval of both delivery plans. 

1.8    This decision requests 2026-27 FY expenditure of £338,703,290 including £8,260,346 of Management and administration costs from the core Integrated Settlement funding (including the ASF SWAPs uplift) and expenditure of £4,763,582 from the construction package uplift and £5.2m from ASF reserves from previous years underspends to fund the Support for Young Londoners NEET project (£4.2m) and the Careers Hubs project (£1m). The proposals are further set out in section two. 

2024-25 Annual Report to HM Government regarding the delivery of delegated adult education functions

1.9    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 the adult education functions in Greater London.

1.10    As specified by the London Guidance, the Annual Report should include information about, and not be limited to:
•    spend from the ASF
•    analysis of the Mayor’s delivery of the adult education functions in Greater London. This can draw on published data from the Department for Education (DfE) and use other data where necessary to present this analysis 
•    the impact of the ASF and FCFJ local flexibilities introduced including use of the ‘FCFJs Strategic Authority flexibility’ and impact of innovative practice introduced’
•    impact on participation, achievement/completions and outcomes - including trends over time
•    alignment with Local Skills Improvement Plan; alignment against Department for Education’s (DfE) ‘national priorities’.

1.11    The Mayor is also encouraged to produce further monitoring and evaluation which goes beyond the data sets 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 Appendix H.
 

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 have the appropriate training, education and associated interventions.  

2.2    There were 211,700 GLA funded learners in London during the 2024-25 AY (a reduction of five per cent compared to 2023-24) that enrolled in 457,830 qualifications. 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    The 2024-25 AY delivery showed positive impacts from the ASF flexibilities introduced by the Mayor to support London’s economic recovery: 24,460 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 9,790 learners out of work and outside benefit arrangements enrolled in 20,270 qualifications; and 4,500 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 completed their second academic year of delivery in July 2025 and have supported 24,420 learners over 33,930 enrolments.

2.5    The management and administration (M&A) spend enables the GLA to have the required staff to manage the ASF effectively. Independent annual evaluation reports have shown providers are positive about the GLA’s management of the ASF. Providers have expressed the importance of having a named point of contact (Provider Manager) as a means for effective communication with the GLA. The latest report (2023-24) showed that providers find the GLA policy flexibilities to be helpful and relevant, providing greater alignment of local and Mayoral skills priorities.

ASF 2026-27 FY expenditure forecast

2.6    The Integrated Settlement quantum confirms the sum of £338,703,290 covering the ASF (Including FCFJ) and the ASF SWAPs uplift and £4,763,582 for the ASF Construction Package uplift for the 2026-27 financial year.

2.7    The table below shows the proposed expenditure profile for the full FY taking into account the forecast for April to July 2026 previously approved by the Mayor under cover of MD3357.

*The total funding includes some of previous years’ underspend carried forward.

2.8    The overall ASF budget forecast for the 2026-27 FY includes the following:

•    expenditure of £338,703,290 which includes final allocations to ASF grant-funded providers (specific approval for which is being sought under a separate decision form – MD3481). Expenditure also includes £8,260,346 of Management and Administration costs from the core Integrated Settlement funding. M&A costs include funding for research, the London Union Learning intervention and costs for staffing, evaluation, contract management systems, provider audits, legal services and continuation of the London Learner Survey. Further details for project workstreams are set out at Appendices A-G
•    expenditure of £4,763,582 from the construction package uplift
•    expenditure of £5.2m from ASF reserves from previous years underspends to fund the Support for Young Londoners NEET project (£4.2m) and the Careers Hubs project (£1m).

2.9    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.

2.10    The total underspends from the 2025-26 FY will be processed as part of the GLA end of year financial processes and carry overs applied to 2026-27 FY or future years as appropriate.

Budget Implications for ASF 2026-27 AY

2.11    Considering that some of the interventions are managed by academic year (AY), the table below shows the proposed breakdown of spend for the 2026-27 AY core expenditure from the Integrated Settlement funds (including ASF SWAPs uplift), Construction package uplift and ASF reserves:

*The total funding includes some of previous years’ underspend carried forward.

ASF 2027-28 and 2028-29 AY and FY expenditure forecast 

2.12    Following the receipt of the Integrated Settlement quantum, the tables below show the proposed breakdown of spend for the 2027-28 and 2028-29 FY and AY. This is only a proposed forecast at this stage, approvals for future years will be reconfirmed as part of the GLA budget setting process at the start of each financial year.
 

*The total funding includes some of previous years’ underspend carried forward.

Annual report to HM Government regarding the delivery of delegated adult education functions

2.13    As required under the London Guidance (see paragraph 1.7 above), officers will submit the final Annual Report to HM Government in March 2026.

2.14    The report mainly reports on the sixth full year of delivery from 1 August 2024 to 31 July 2025 with a focus on priorities for delegated adult education, policies and interventions, monitoring and evaluation, local impact and spend.
 

3.1    Under section 149 of the Equality Act 2010, as a public authority, the Mayor must comply with the Public Sector Equality Duty (PSED) when exercising its functions. The PSED is a duty to have due regard to:  

•    the need to eliminate discrimination, harassment and victimisation, and any other conduct that is prohibited by or under the Equality Act 2010 
•    advance equality of opportunity, and foster good relations, between people who share a ‘protected characteristic’ as defined in the Equality Act 2010 and those who do not. 

3.2    The protected characteristics under section 149 of the Equality Act are: age, disability, gender reassignment, pregnancy and maternity, marital or civil partnership status (for the purposes of the first limb of the duty in relation to employment), race, religion or belief, sex, and sexual orientation. Compliance with the duty may involve ensuring people with a protected characteristic are provided with all the opportunities that those without the characteristic would have. 

3.3    This involves having due regard in particular to the need to remove or minimise any disadvantage suffered by those who share a relevant protected characteristic that is connected to that characteristic; taking steps to meet the different needs of such people; and encouraging them to participate in public life or in any other activity where their participation is disproportionately low. 

3.4    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.

3.5    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 not in employment, education or training, people without basic skills and people who are workless. It will also support Londoners in low paid/low skilled jobs.
 

Risks arising/mitigations

4.1    There is a risk of the ASF budget being insufficient to meet the increasing demand in London. In response to this risk, and in line with the Inclusive Talent Strategy, the GLA is seeking greater co-investment opportunities from a wider range of stakeholders to maximise funding available to deliver adult skills and will continue to lobby central government for increase in the budget in line with inflation and to avoid further cuts.

Links to Mayoral strategies

4.2    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 filling skills gaps. 

4.3    The GLA’s ASF programme aligns to the Inclusive Talent Strategy and Get London Working Plan, approved under cover of MD3440. The programme will enable the delivery of the ‘Essential Skills and Progression Pathways’ project, support the success of the ‘Upskilling for Resilience’ project, and is strategically linked to all other projects under the Mayor’s SLBG mandate, approved under cover of MD3395 by ensuring Londoners have the skills they need to improve their lives and move into employment that meets the Mayor’s definition of ‘good work’. Projects under the SLBG mandate are detailed in budget breakdown at paragraphs 2.7 and 2.11.

Other 

4.4    Budget reprofile: Under current processes, future reprofiling will generally be agreed through the GLA’s budget management processes and presented to the ASF Mayoral Board. Any virements between the top-level ASF budget lines (see table at paragraph 2.7 and 2.11 above) or matters reserved within the ASF Assurance Framework for the Mayor, will be approved as per the GLA’s decision-making process. This process may be revised once the governance arrangements relating to the ASF are reviewed in line with the Integrated Settlement between HM Government and the GLA coming into effect.

4.5    There are no conflicts of interest to declare from those involved in the drafting or clearance of this decision form. 

4.6    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 the ASF Assurance Framework.

Subsidy Control

4.7    The Subsidy Control Act 2022 requires that grant funding comply with its subsidy control principles. Officers assessed London and Partners’ Grow London Local skills brokerage project (GLL) prior to the original award of funding to London and Partners and were satisfied that the proposed award of funding to London and Partners in this regard aligned with the seven subsidy control principles. Officers have revisited that assessment in light of the proposed award of additional funding and are satisfied that the funding remain aligned with the seven subsidy control principles for the reasons set out below:

·    The subsidy pursues the following specific policy objective: GLL run by London and 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:

•    the receipt of the full Integrated Settlement funds of £1,027,471,013 (£338,703,290 for the 2026-27 FY, £343,204,875 for the 2027-28 FY and £345,562,848 for the 2028-29 FY) covering the ASF (Including FCFJ) and the ASF SWAPs uplift and £14,290,746 (£4,763,582 per financial year) for the ASF Construction Package uplift for 2026-27 to 2028-29 financial years
•    ASF expenditure of £338,703,290 for the 2026-27 financial year, which includes expenditure of:

o    £8,260,346 for the Management and Administration element of the budget for the 2026-27 financial year, on funding for research, the London Union Learning project, costs for staffing, evaluation, contract management system, provider audits, legal services and continuation of the London Learner Survey
o    £350k to fund the Boosting Capacity and Capability project for the 2026-27 FY
o    £211,621 for the Promoting London’s Skills Excellence project for the 2026-27 FY
o    £640k for the Supported Navigation for Londoners project for the 2026-27 FY
o    £800k for the Upskilling for resilience for the 2026-27 FY
o    £1,025,000 match-funding the Employer Boards and Partnerships project for the 2026-27 FY

•    £1,714,889 for the ASF Sector Based Work Academy Programme (SWAPs) for the 2026-27 FY
•    Further ASF expenditure of £5.2m for the 2026-27 FY for the Support for Young Londoners NEET project (£4.2m) and the Careers Hubs project (£1m) funded from carried forward ASF underspend from the 2025-26 financial year and prior financial years
•    ASF Construction Package uplift expenditure of £4,763,582 for the 2026-27 FY.

5.2    Future financial year funding and expenditure will be subject to the annual budget setting process.

5.3    This receipt and expenditure will be managed through the ASF budget.
 

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 (now ASF) 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 or 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 three (above) of this report.

6.3    The Subsidy Control Act 2022 requires that grant funding comply with its subsidy control principles.  Subject to section 6.4 (fifth bullet point) below, the officers have set out at paragraph 4.7 above how the proposed grant complies with those principles.

6.4    If the Mayor makes the decisions sought officers must ensure that: 

•    no reliance is placed upon on any future years budgets (whether GLA or third party funded) until they have been definitively confirmed as being available for use
•    where expenditure has been indicated as being subject to separate decision forms, no commitment is made to it until those decisions have been made
•    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
•    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)
•    that the grant of additional funding to L&P is registered on the Department for Business and Trade’s Transparency Database
•    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.

6.5    To the extent to which the proposals in respect of which decisions are sought involve the making of commitments which extend beyond the current Mayoral term, officers must ensure that the terms of all agreements entered into in respect of the commitments do not fetter the discretion of any successor administration, considering in particular the London elections taking place in May 2028. Accordingly, officers must ensure that all agreements which involve the making of such commitments include a GLA right to terminate at any point for convenience and all such agreements are managed in such a manner, and any services, supplies, works deliverables, milestones and/or output requirements are structured so as to mitigate risks of the GLA incurring abortive expenditure (which might be reasonably be taken to fetter, practically, the exercise of such discretion).
 

7.1    The profiles to be reflected in the GLA Budget.

7.2    The Mayor’s Annual Report to the DWP (Appendix H) will be submitted to the DWP in March 2026.