Independent learning providers think their businesses will enjoy substantial growth this year, but they say the Government has broken its promises to cut red tape.
The findings stem from the first annual national survey of independent training firms conducted by The TES on behalf of the Association of Learning Providers.
Graham Hoyle, ALP's chief executive, said: "Providers expect to do more.
There is a confidence that they can deal with greater numbers and offer wider provision - also that the Government is responding to that capacity."
He is disappointed, though, that fewer than 30 per cent of providers had noticed any reduction in bureaucracy.
The survey targeted the 300 biggest providers - including charities, not-for-profit companies and charities - and 40 per cent responded.
Two-thirds said they had increased their number of learners; 73 per cent had increased the number of employers they engaged with. It is positive progress, Mr Hoyle said, with more employers developing their employees'
Despite warnings from the Education Secretary Charles Clarke that employers and learners would have to share more of the cost of training, Mr Hoyle said providers could expand their business because of their existing relationships with employers.
"Most providers have contracts outside government funding," he said. "The whole of their business is working with employers, supplying services and training."
Providers are heavily involved in areas where the Government is committed to maintaining funding, such as apprenticeships and basic skills, he added.
But some 90 per cent of providers said they could compete with colleges if they had the chance. Mr Hoyle said: "This shows a will and desire for a broader base as soon as the Government opens this up and relaxes colleges' monopoly on programmes.
"I don't see huge injections of cash, but there is a move to shift some expenditure out of the college domain."
He cites level 2 (GCSE-equivalent) schemes as an area of potential strength for independent providers when the market is opened up. Most providers would like to provide for level 2 entitlement for adults, and nearly three-quarters are willing to work with the under-16s when the Young Apprentices programme begins.
But optimism is not universal. Almost 80 per cent of providers expect to train more apprentices next year, and a higher proportion said they could train more young people if funds were available.
Mr Hoyle believes there is more demand than the Government funding allows for - and that although places are guaranteed for 16 to 18-year-olds, there are restrictions on funding for older trainees.
Most providers expect increasing collaboration, but Mr Hoyle sees "deep reservations" among his members about working with colleges. Some big providers feel strong enough to go into partnership, but some worry that they will be used for a short time and then cut adrift.
But the ALP has worked with the Learning and Skills Council to produce a toolkit to improve relationships.
"Collaboration must be voluntary and to mutual advantage," said Mr Hoyle.
Despite growing learner numbers, nearly one-fifth of providers have lost key contracts in the past year.
Entry to Employment (E2E), for those not yet ready to enter an apprenticeship or other level 2 provision, caused concern. Connexions, the Government's careers service for young people, had to focus its efforts on young people not in employment, education or training, but funding has not been boosted to include the eligible young people recruited by the service.
Some FE franchises have been cut since a letter from the LSC to its local arms advised that franchising should be no more than 5 per cent of budgets. The letter aimed to warn against long-distance franchising schemes which, says Mr Hoyle, have caused trouble in the past. "Some local LSCs took it as a cap and started hitting top-quality local collaboration," he said. "It was never intended, but that clumsy approach has caught both good and bad."
Funding for the over-19s was also hard to come by. One provider said that training frameworks and red tape were putting employers off. Fewer than a third of providers had noticed a reduction in red tape.
Nearly half of providers have contracts with more than one government agency, and each has its own system. For example, Jobcentre Plus, the all-in-one work and benefits service, recently changed its approach so that its method of operation is very different from that of the LSC, a move that could make bureaucratic burdens appear heavier.
Speaking of learndirect, the government-sponsored online learning service for the over-16s, Mr Hoyle added: "There has been a lot of criticism of the weight of its contracts."
Additional research by Patrick Hayes