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In June 2003, the UK government will publish a national Skills Strategy and Delivery Plan. The strategy will establish a broad agenda for raising skill levels amongst young people and adults in close cooperation with employers to ensure that their skill needs are satisfied. The strategy will describe the roles and responsibilities of employers, individuals and government in skills development, including the government’s role in providing institutional, qualifications and quality frameworks. The aim of the strategy is to create a more demand-led learning system and it will include: a comprehensive approach to promoting participation in learning through better advice and rendering learning more attractive and accessible to learners of all ages; the government’s approach to engaging employers across all areas of skills development; adult workforce development, especially in relation to the delivery plan for the new Level 2 target for adults, i.e. to reduce by at least 40% the number of adults in the workforce without a Level 2 or equivalent qualification by 2010; and the outcomes of the review of the funding of adult learning. This technical paper sets out some of the potential options and related funding issues for colleges and providers which are being considered as part of the current review of funding adult learning and development of the skills strategy. It also reflects the work of the Learning and Skills Council Funding Group.