The Treasury is “actively looking into” a controversial freeze to free meals funding for college students, while ministers are continuing to review FE’s long-running VAT dispute without committing to a decision timetable. Financial secretary to the Treasury Lord Spencer Livermore made the comments during oral questions in the House of Lords this afternoon. Here’s what we learned. Please sir, can FE have some more? Prime minister Keir Starmer hailed a “truly historic moment for our country” last June when the government announced it would expand free school meal eligibility to all young people in households receiving universal credit. But the further education sector was then hit with the news in March that free meals funding for college students would remain frozen at £2.61 per meal in 2026-27, while the rate for schools will rise by 5p to £2.66. College leaders criticised the decision as “insulting” and questioned why the Department for Education had not explained the disparity. Labour peer Baroness O’Grady of Upper Holloway raised the issue in the Lords today. “I strongly welcome the expansion of eligibility for free meals,” she said. “But in my experience, teenagers who attend FE colleges are no less hungry than those who attend schools. So, will my noble friend agree to look again at the funding rate for free meals?” Livermore replied: “Yes, absolutely. I hear what she says. I can reassure her that the government is aware of this discrepancy, and we are actively looking into it.” VAT spat continues The government also faced fresh questions over the long-running VAT anomaly affecting FE colleges. Despite being reclassified as public sector bodies in 2022, colleges teaching 16 to 18-year-olds remain unable to reclaim VAT on most education and training-related purchases. Schools and academies educating the same age group can recover those costs through the government’s VAT refund scheme. Research commissioned by the sector estimates the policy costs colleges around £200 million a year. Starmer pledged during a liaison committee session in December to “have a look” at the anomaly. The issue was today raised by Labour’s Lord Nick Forbes of Newcastle, who was appointed president of Capital City College last month. He told peers that FE colleges, unlike councils, academies and most other public sector organisations, have been excluded from VAT refunds since 2011, leaving students at a funding disadvantage and reducing resources available for priority subjects such as construction, engineering, digital and health. Forbes also highlighted the role colleges play in supporting disadvantaged learners and asked whether ministers would review the issue as part of the government’s response to Alan Milburn’s review into young people not in education, employment or training (NEET). Livermore said: “The government is continuing to look into the VAT position of these colleges. “Of course, admitting further education colleges to a VAT refund scheme would be a change in tax policy, and as my noble friend knows, the chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances.” He also pointed to a series of recent investments in further education, including funding for college estates, post-16 capacity expansion and support for priority technical subjects. No timeline for decision Liberal Democrat peer Baroness Garden of Frognal pressed the minister on when the government expected to reach a decision. “The noble Lord keeps saying the government is looking into this,” she said. “Can you put some timescale on that, please? Is it looking into it this year, next year, way in the future?” Livermore replied: “As I’ve said, we are looking into the VAT position of these colleges, and I’m not in a position to put a timescale on that just now.” The exchange comes as colleges await the final recommendations from Milburn’s review, which has already criticised aspects of the sector’s funding system, including the use of lagged funding that can make it harder for providers to take on NEET young people. Conservative peer Lord Jo Johnson raised those concerns in the Lords today, asking whether ministers agreed that lagged funding discourages colleges from taking on more young people at risk of becoming NEET. Livermore did not respond directly, saying only that he looked forward to receiving Milburn’s final report and recommendations later this year.