I have put an extra LED into the circuit to monitor whether the Analogue Interrupt is being triggered, this LEDstatus1 (analogue interrupt sub program) does not seem to toggle. This leads to believe that the issue maybe to do with the analogue input not being read.

Code:
clear
DEFINE OSC 8

'GP0 LED OUT
'GP1 AD1 FOR POT INPUT
'GP2 LED STATUS
'GP5 LED STATUS 1

'REGISTERS
OPTION_REG = %11000000
INTCON = %11000000
PIE1 = %01000001
PIR1 = %00000000
OSCCON = %01110001
TRISIO = %00000001
ANSEL = %00100001
CCP1CON = %00000000
CMCON0 = %00000100

INCLUDE "DT_INTS-14.bas"     ' Base Interrupt System
INCLUDE "ReEnterPBP.bas"     ' Include if using PBP interrupts

;---------------------------------------------------------------------------
wsave   VAR BYTE    $20     SYSTEM      ' location for W if in bank0
;wsave   VAR BYTE    $70     SYSTEM      ' alternate save location for W 
                                         ' if using $70, comment wsave1-3

' --- IF any of these three lines cause an error ?? ------------------------
'       Comment them out to fix the problem ----
' -- Which variables are needed, depends on the Chip you are using -- 
wsave1  VAR BYTE    $A0     SYSTEM      ' location for W if in bank1
'wsave2  VAR BYTE    $120    SYSTEM      ' location for W if in bank2
'wsave3  VAR BYTE    $1A0    SYSTEM      ' location for W if in bank3
' --------------------------------------------------------------------------

'OUTPUT PINS
LEDOut VAR GPIO.0
LEDStatus VAR GPIO.2
LEDStatus1 var GPIO.5

high ledstatus
pause 500
low ledstatus
pause 1000
high ledstatus
pause 500
low ledstatus
T1CON = %00110001

'VARIABLES
LENGTH VAR WORD
PauseA var byte
PASS var byte

ASM
INT_LIST  macro    ; IntSource,        Label,  Type, ResetFlag?
        INT_Handler    TMR1_INT,  _StateChange,   PBP,  yes
        INT_Handler    AD_INT,  _PulseLength,   PBP,  yes
    endm
    INT_CREATE               ; Creates the interrupt processor
ENDASM

@ INT_ENABLE TMR1_INT
@ INT_ENABLE AD_INT

ADCON0 = %00000111

'MAIN PROGRAM
MAIN:
pausea = 0
WHILE PauseA <= 10
    PAUSEA = PAUSEA + 1
    pause 1
wend
toggle ledstatus
GOTO MAIN

'SUB PROGRAMS
PulseLength:
LENGTH.highbyte = ADRESH   'SET UP THE TIMER SET UP VARIABLES
LENGTH.lowbyte = ADRESL
ADCON0 = %00000111
toggle ledstatus1
@ INT_RETURN ;RETURN

StateChange:
if pass = 10 then
    TOGGLE lEDOUT
    pass = 0
    else
    pass = pass + 1
endif

TMR1H = LENGTH.highbyte 'Transfer the timer variables to the timer register
TMR1L = LENGTH.lowbyte
T1CON = %00010101
@ INT_RETURN ;RETURN

END
If anybody can see any issues I would appreciate it

Thank you