Funding Higher Risk Organisations and Subcontractors Policy
Summary
The Department for Education (DfE) has published policy on identifying and managing 'high risk' education providers accessing post-16 funding streams. The policy defines risk criteria, the decision-making process, and possible funding actions DfE may take. The Education and Skills Funding Agency (ESFA) closed on 31 March 2025, with all activity transferred to DfE. The policy was most recently updated on 10 February 2026 to expand risk identification criteria and clarify applicability.
What changed
The policy establishes how DfE identifies higher-risk providers and the actions it can take regarding their funding. It applies to all public and private sector providers accessing post-16 funding streams, excluding schools/academies (unless holding specific funding agreements), Skills Bootcamp-only providers, and devolved budget functions. The February 2026 update expanded the 'Ofsted assessments and safeguarding' section, while the January 2025 update broadened risk identification criteria and clarified available funding actions.
Education providers and subcontractors receiving post-16 funding should review the policy to understand risk classification criteria and potential consequences. Providers identified as high risk may face funding-related actions from DfE, which now administers former ESFA functions following the agency closure on 31 March 2025.
What to do next
- Review DfE risk identification criteria to assess provider status
- Monitor policy updates for changes to funding actions and decision-making processes
- Ensure compliance with safeguarding and Ofsted assessment requirements
Archived snapshot
Apr 16, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Policy paper
Funding higher risk organisations and subcontractors
What the Department for Education defines as a ‘high risk’ provider, the decision-making process and the possible actions it can take.
From: Department for Education and Education and Skills Funding Agency Published 14 September 2020 Last updated 10 February 2026
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Applies to England
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Funding higher risk organisations and subcontractors policy
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Details
The Education and Skills Funding Agency (ESFA) closed on 31 March 2025. All activity has moved to the Department for Education (DfE). You should continue to have regard to the policy.
The policy applies to all public and private sector providers accessing post-16 funding streams.
It does not apply to:
- schools and academies (unless they hold a funding agreement for post-16 apprenticeship training and education services)
- training providers that only deliver Skills Bootcamps
- budgets associated with functions transferred from the Secretary of State for Education to local government institutions (known as devolution)
Published 14 September 2020 Last updated 10 February 2026 show all updates
1.
10 February 2026
Updated the 'Ofsted assessments and safeguarding' section of the 'Funding higher risk organisations and subcontractors policy'.
2.
9 January 2025
The policy has been updated to expand the criteria for identifying high risk providers, and to clarify when the policy applies and the actions the Department for Education can take.
3.
20 June 2022
We have amended the references to ESFA and the Department to reflect organisational changes following the recent arm's length body review of ESFA.
4.
14 September 2020
First published.
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