Further Education Colleges and training providers are allocated funds by the SFA at the beginning of each academic year according to bids they submit. To access funds FE colleges and training providers must be on the Approved College and Training Organisation Register (ACTOR) through its e-tendering portal. ACTOR is intended to be the single process through which colleges and training organisations can be considered for funding from the Skills Funding Agency. 

Once approved under ACTOR, providers will remain on the register providing they refresh their information when asked to do so and continue to meet the entry threshold. This includes Adult Learner Responsive, Employer Responsive, Programmes for the Unemployed, Adult Safeguarded Learning, and ESF co-financed programmes. The SFA operates a Maximum Contract Value (MCV) model i.e. the training provider should not undertake to train more apprentices than would be covered by the MCV amount they are allocated. 

It should be noted however that the entry threshold is changing. A Minimum Contract Level (MCL) has been introduced which is forcing consolidation of the market. Those providers that have accessed less than £500,000 of funding per annum will not be awarded funding in the coming year, forcing them to work as subcontractors to successful providers (or go out of business). The SFA has signalled its intent to further increase the MCL once it has seen the effect of the current £500,000 threshold (possibly up to £2m) which would further consolidate the market. 

Currently providers are subject to in-year reviews of their performance, and the SFA changes funding allocations according to its assessment of performance. Poorly performing providers can and do have their MCV reduced and better performing providers can and do have their MCV increased in-year. As a well-performing provider, Byrne has acquired an additional £6m of funding in this year in addition to its funding allocations at the beginning of the 2010/11.

FE colleges already use commercial training providers to deliver training which they are secured funds, through a subcontract mechanism. There are currently suggestions to limit the level of 'commission' retained by FE Colleges.