DfE reveal more detail on how £300M funding from Autumn budget can be utilised

The Autumn Budget provided an additional £300m revenue funding for further education for financial year 2025 to 2026 to ensure young people are developing the skills this country needs.  Details on allocations will be made available later this term, and we are providing a high level outline of plans now. 

The government is committed to increasing opportunity for young people, and we know the population of 16 to 19s in learning is increasing, so this funding will be distributed specifically in support of 16 to 19 student participation.

£50M of Funding for FE Colleges and Sixth Forms for workforce recruitment and retention

c.£50m of this funding will be made available to general further education colleges and sixth-form colleges for the period April to July 2025. This one-off grant will enable colleges to respond to current priorities and challenges, including workforce recruitment and retention. Schools and academies will also continue to get grant funding for their 16-19 provision over this period. 

The remaining funding will be made available in 16 to 19 funding rates for academic year 2025 to 2026, with the aim of ensuring that all 16 to19 providers are funded on an equitable basis from 2025 to 2026. We are preparing the operational detail of the 16 to 19 funding rates and formula and the allocations timeline for the 2025 to 2026 academic year. We aim to publish more information as soon as we can and will provide a further update by 13 February 2025.  

David Hughes, Chief Executive, Association of Colleges, said:

“I am pleased that the DfE has provided more detail on how they plan to use the extra £300m announced in the autumn budget last year. Colleges will be looking forward to seeing the detailed information of what their allocation will look like in February before they make any decisions on how they will be able to utilise it for both this year and next. They will also be keen to know about any in-year growth plans and their adult allocation for next year.

“The £300m is a welcome boost for 16 to 18 funding, but because of demographic growth it is clearly not enough to restore the funding lost since 2010. It’s even more worrying that there is yet again no change to the adult funding rate which has been fixed for 14 years now. The rate is ridiculously low and it makes it increasingly likely that colleges will be turning away adults who want to learn skills in high demand in the labour market because they simply cannot recruit and retain teaching staff to deliver the learning needed at the pay they can afford.

“If the government wants to achieve its missions and ambitions for economic growth and fairness, additional, sustainable investment across all post-16 education must be provided in the spring spending review.”

Bill Watkin, Chief Executive of the Sixth Form Colleges Association, said:

“Sixth form and further education colleges were seriously disadvantaged by the government’s decision in the summer to fund a pay award for staff in schools and academies but not colleges. In September, we took the decision to bring a claim for a Judicial Review of this decision.

“Following protracted discussions with the Department for Education we are pleased to have reached an agreement on future funding. The government will provide a £50 million grant for sixth form and FE colleges that can be used to increase teacher pay in the 2024/25 academic year and has made a commitment to raise the 16 to 19 funding rate in the 2025/26 academic year. As a result, we have agreed to withdraw our claim for a judicial review.

“Since the start of this process, it has been our contention that all colleges, irrespective of their designation, should be supported in the same way as schools and academies. All are state-funded institutions that educate young people and employ hard-working teaching staff that do an incredible job. While the additional funding we have secured for 2024/25 will not enable colleges to match the pay award in schools and academies, it is a significant step in the right direction”.