Source · Select Committees · Education Committee
Recommendation 56
56
Accepted
Colleges face significant challenges due to limited and inequitable capital funding.
Conclusion
Colleges face significant challenges due to limited and short-term capital funding. Whilst recent allocations have addressed urgent maintenance needs, the lack of sustained capital investment prevents long-term improvements. The £300 million allocated for 2025–26 is insufficient given the scale of need across thousands of college buildings. Furthermore, access to capital funding is inequitable, with specialist colleges and sixth form colleges often being excluded from capital funding streams. Without ongoing and increased investment across the sector, colleges and other providers risk falling behind in providing modern, industry-aligned facilities which are essential for skills development and for delivering the ambitions of the Government’s Industrial Strategy. (Conclusion, Paragraph 211)
Government Response Summary
The government details "PLANS ALREADY IN PLACE", including £6.7 billion in capital funding for education in 2025-26 with annual allocations to provide greater certainty for FE colleges. It also outlines existing alternative capital funding routes available to sixth form and specialist colleges, addressing concerns about equitable access.
Government Response
Accepted
HM Government
Accepted
PLANS ALREADY IN PLACE The Government has committed £6.7 billion in capital funding for education in 2025–26, representing a 19% real-terms increase from 2024–25. This includes £950 million dedicated to skills capital. A key focus of this investment is to ensure that FE colleges have access to high-quality buildings and facilities, which are essential to delivering the Government’s ambitions for opportunity and economic growth. As part of this, we allocated £302 million to FE colleges via the FE College Condition Allocation for 2025–26. Funding secured at SR2025 means that we will be able to provide further annual capital allocations across this SR period, giving FE colleges greater certainty of funding and supporting good estates planning. This settlement provides regular and predictable annual allocations to FE colleges for the first time, bringing them in line with schools and Sixth Form Colleges (SFCs). The Skills Mission Fund (SMF) will provide £200 million investment to support strategic skills priorities and scale up technical qualifications which underpin growth through investment in equipment and facilities. This includes helping colleges develop sectoral specialisms as technical excellence colleges (TECs). Government has committed to establishing TECs in the Industrial Strategy growth-driving sectors. The government has committed £80 million capital funding to support the Construction Technical Excellence Colleges (CTEC) programme–10 CTECs were launched in August 2025 to deliver high-quality construction skills provision. This funding aims to expand construction skills training to meet demand and support the delivery of 1.5 million new homes and infrastructure across the country. The majority of the funding will create additional capacity in FE providers working with CTECs, as well as in the CTECs themselves. Capital Funding is available to sixth form colleges and specialist colleges through alternative routes; sixth forms colleges are eligible for funding through the post-16 capacity fund route where their projects meet the criteria. Sixth form colleges and Specialist Post-16 Institutions (SPIs) that receive revenue funding from DfE have access to condition capital funding from DfE. These include the Condition Improvement Fund (CIF) which is available to sixth form colleges—an annual competitive bidding process for essential capital projects—and Devolved Formula Capital (DFC), which provides formula-based funding for smaller-scale capital investments aligned with institutional priorities. Sixth form colleges are also eligible to be included in the Schools Rebuilding Programme.