A draft version of the agreement, drawn up by the Association of Learning Providers, skills minister Ivan Lewis and the Learning and Skills Council, would put colleges and private learning providers on a more equal footing when seeking government funding.
The move could increase the opportunities for young people to participate in work-based and vocational learning, although it would not have any effect on the troubled Entry to Employment programme.
At present the bulk of the Learning and Skills Council's 8.6bn annual budget is set aside for colleges.
Young People Now understands that the main criterion used in determining funding will be the success of learning providers in meeting the demands of employers.
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