Source · Select Committees · Education Committee
Recommendation 57
57
Accepted
Increase capital funding for further education and expand eligibility to all college types.
Recommendation
We recommend that the Department for Education increases capital funding significantly to support further education providers with modernisation and expansion. The increase in post-16 student numbers will be temporary, however, and therefore in some cases funding should be allocated to allow for a temporary expansion to the college estate to avoid 101 ‘white elephant’ buildings as the impact of the fall in the birth rate comes through to the FE sector. The Department must also expand eligibility for capital funding programmes—including FE Capital Transformation and the Post-16 Capacity Fund—to specialist colleges and sixth form colleges. (Recommendation, Paragraph 212)
Government Response Summary
The government has committed £6.7 billion in capital funding for education, including specific allocations for FE colleges and an additional £375 million for capacity expansion, with consideration for temporary needs in line with the recommendation.
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. Statutory FE providers are eligible to receive this funding so that would include SFCs but, as with SMF, it is primarily targeted at General FE College. In the Post-16 Education and Skills White Paper, the government committed £175 million (£137 million capital and £38 million revenue funding) over 4 years to expand the TEC programme to 4 more sectors. This will include 19 new TECs (4 in advanced manufacturing; 5 in clean energy; 5 in digital and technologies; and 5 in defence) to launch from April 2026. On capacity, the Government’s Modern Industrial Strategy, released on 23 June 2025, sets out an additional £375 million in capital investment to be delivered between 2026–27 and 2029–30. This funding aims to expand capacity in response to a projected rise in learner numbers, which is expected to peak nationally in 2028–29, though this will vary by region. Post-16 Capacity funding is intended to ensure there are enough places for young people until population levels return to pre-growth figures by 2036–37. In recognition of the temporary nature of the demographic increases in this age group, we are considering how best to take account of the fact that additional capacity will be required for a temporary period of time, in order to avoid creating capacity that becomes surplus to requirements in later years. Where possible, longer-term use by different age groups, such as adult learners, is encouraged to support increased numbers to obtain the skills they need. We will announce further details of how the new £375 million of capital funding will be distributed in due course.