AoC: Colleges could be forced to turn away tens of thousands of learners due to funding shortfall

AoC warns that thousands of people are at risk of being turned away by their local college this September without more funding from the government to grow capacity and meet demand.  

Colleges could receive only two-thirds of the funding needed for 35,000 new students enrolled last autumn.

A statement from the Department for Education today confirmed a welcome funding increase for provision for younger learners for next academic year. However, the announcement included news that colleges will only get two thirds of the funding they should have got for the additional 35,000 16 to 18 year-old students enrolled by colleges last autumn.  

Crucially, AoC estimates that 25,000 additional young people aged 16 to 18 will try to enrol in colleges this autumn and another 20,000 will do so in autumn 2026 – but as things stand, colleges do not know if they will receive extra funding to pay for their learning.  

The rising number of young people requires exceptional increases in funding. Without any assurances of that, colleges are effectively being asked to take on large numbers of unfunded students at a time when many are at capacity in terms of workshop and classroom space. With many colleges also finding it difficult to recruit teaching staff, some will have no choice but to turn learners away. This would lead to more young people ending up not in education, employment or training (NEET), adding to the worrying numbers already NEET. 

Announcement after the 3% cut to Adult Skills Funding (ASF) for the academic year 2025/26

Today’s announcement comes after it was revealed last month there will be a two to 3% cut to Adult Skills Funding (ASF) for the academic year 2025/26 just as it has become clearer that the government’s own missions require more skilled adults in the labour market. Employers in construction, energy, defence, the NHS and manufacturing are all setting out their needs for skilled workers as skills vacancies are rising across these and many other sectors. 

This follows years of reductions to that same budget, with more than £1billion of cuts since 2010. It will further reduce the opportunities colleges can provide for adult learners – and for employers looking to upskill their workforce. The move will therefore undermine both economic growth and the government’s commitment to widening opportunities.  

AoC: The investment needed is an additional £500m per year for young people and the same for adults to help the government deliver on its five missions

The increased demand for skilled adults and the rising numbers of young people coming through the school system were central arguments in the AoC submission to the Treasury for this year’s spending review. The investment needed is an additional £500m per year for young people and the same for adults to help the government deliver on its five missions and support economic growth, as well as properly funding the statutory requirement for young people to be in education or training to age 18.   

The Chancellor has made it clear that the government’s finances are tight but investing in skills is an enabler for growth and without it employers will struggle to find the people they need for productivity and success. 

David Hughes, Chief Executive, Association of Colleges (AoC) said: 

“While the announcements today included some growth in funding for next academic year, the increase will not cover what we expect to be another 25,000 extra young people wanting to start college in September, and I fear that without in-year funding, colleges will have to turn many away.  

“With a tight labour market, many 16-year-olds will struggle to find work, and a place in college is their best option to set them up for a successful working life. 

“The picture for adults is even more stark, with a cut to the adult skills budget suggesting that the government does not recognise how vital investing in skills is for their missions, and in particular for economic growth. 

 “We’ve seen skills vacancies grow over the last few years and employers struggle to find the people they need. And that’s before the demand grows to help deliver the 1.5million homes, retrofitting for net zero, clean energy and the workforce needed to get the NHS back on track.  

“The spending review will be critical for all of these priorities, and college leaders will be hoping that the Treasury recognises the return on investment that comes from skills.” 

Notes from AoC on how they calculated their findings:

DfE does not publish forecasts of 16-18 year-olds in government-funded further education and will not publish information about 2024-25 enrolments until its official statistics publications later in 2025.

AoC’s data partner, RCU, has collected data from FE colleges reporting 35,000 more 16-18 students enrolled in FE colleges in 2024-5 than in 2023-4. AoC staff have constructed a simple model to forecast 16-18 student numbers for 2025-6 and 2026-7 based on the number of 15 year olds in education and recent patterns of participation.