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Local Skills Fund

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 Project Brief

UKSPF Interventions - E38 Local areas to fund local skills needs


The current funding system for further education courses is complex; Most programmes are funded through the Adult Education Budget (AEB) which is administered by the Department of Education, according to national funding rules. 

This budget has been devolved in combined authorities such as Greater Manchester, allowing for flexibilities in the funding mechanism for local colleges and training providers, in order to meet local needs. No such flexibility is available for skills providers in Preston and local colleges and training providers have highlighted several gaps in the current national funding rules which are preventing their ability to respond to local skills needs in several key areas. 

Preston City Council has set aside a grant of £167,821 for a local college or training provider to deliver free courses for residents to access jobs where skills gaps have been identified, and they cannot be fully funded through national AEB funding rules.

These courses will be for shortage sectors of the Preston economy such as health and social care, retail, motor vehicle, teaching and classroom support, construction, public services, media, research, engineering and technology and it will cover tuition fees for residents who cannot access AEB funding for their courses.  For example, under the AEB only residents earning less than the national living wage (currently £20,319) can access Level 3 training for shortage skills areas under GOV.UK's current free courses for jobs programme. 

This fund will enable a much wider range of residents on low incomes to access this programme, including residents who already have level 3 qualifications or higher in other subject areas, without the need to take out student loans.  In addition, this fund will allow young people aged 19-24 to access a wider range of courses, even if they are already in low paid employment.  Currently, many young people face a cliff-edge if they have not already achieved level 2 or 3 vocational qualifications by the age of 19 when they are no longer entitled to free full-time education/training.   

Programme Outline

Skills and training providers with a broad vocational curriculum offer and which draw Adult Education Budget (AEB) funding are invited to apply for the Local Skills Fund.  This funding will be paid to the successful college or training provider at the outset of the programme and will be available to fund tuition fees for Preston based residents who are not eligible for full fee remission under AEB rules. 

The funding can be used to deliver training for any qualification that is likely to lead to employment (even if it is not currently available for AEB funding) and it is expected that the majority of this delivery will be for the skills shortage areas outlined above. 

The successful applicant can also use the funding to deliver non-accredited vocational training, provided it can be demonstrated that this training will improve the individual's employment prospects.

The successful applicant will be able to claim the AEB equivalent funding for any individual undertaking a course from the Local Skills Fund.  The provider will be expected to keep an accurate record of every enrolment which draws funding from the Local Skills Fund, along with the amount claimed.  Any funds which have not been allocated to deliver learning programmes by March 31 2025 will have to be paid back to Preston City Council.

There is no limit to the number of guided learning hours that any individual can undertake when studying a course but providers are expected meet the output and outcome target numbers as a minimum requirement for the contract.  Any level of qualification can be delivered provided that it can be demonstrated that the qualification will improve an individual's employment prospects. 

A small proportion of the fund should be set aside to support learners with additional costs (for things such as learning materials and uniforms, if applicable).  It is expected that any individual who is funded through the Local Skills Fund will also be eligible to access the same college support services as those who are funded through the AEB.

Financial Profile




Total Expenditure

Year 24/25





Number of people supported to participate in education


Number of people attending training sessions


Number of people supported to gain a qualification



People gaining a qualification or completing a course following support.


* The output and outcome figures shown are the minimum which Preston City Council expects the available funding to deliver.

Applicants applying for the full amount would be expected to meet these targets as a minimum. Where an applicant is applying for a share of the funding, we expect outputs and outcomes to be delivered in proportion to the share applied for.


Project Timeline

  • Date of launch for commissioning - 8 November 2023
  • Deadline for receipt of applications - 15 December 2023 at 17:00
  • Notification of whether applications have been successful - 8 January 2024
  • Issuing of grant agreements, commencement of projects - 1 April 2024
  • Project end - 31 March 2025

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