Colleges hit hard as high-cost HE funding withdrawn

College higher education grant allocations for the 2026-27 academic year have fallen more than twice as fast as those across the wider sector, with Bradford College warning some arts courses will have to close.

FE Week analysis of initial Office for Students allocations to 139 further education colleges and designated institutions found their combined recurrent funding has dropped by £2.72 million, or 9.3 per cent, from £29.15 million to £26.43 million.

Comparable allocations across all providers fell by 3.9 per cent, from £1.243 billion in 2025-26 to £1.195 billion this year, meaning the college reduction was around 2.4 times faster.

Seven in ten colleges analysed, 98, will receive less than last year. Sixty-nine lose at least 10 per cent and 39 lose at least one-fifth.

Around £1.59 million of the college reduction was in high-cost course funding, while about £1.13 million was in student access and success allocations. Those allocations also reflect changes in weighted student numbers and other formula elements.

The government required the OfS to stop providing general high-cost subject funding for computing, nursing, geographical systems, archaeology and creative and performing arts. A separate £32.1 million supplement for nursing, midwifery and allied health courses remained.

Bradford College’s allocation was cut by £223,600, or 64.9 per cent, from £344,429 to £120,829.

Deputy chief executive Christopher Malish said removing high-cost funding for creative subjects meant some specialist higher education arts provision was “no longer financially sustainable”.

Many programmes had small student numbers and were delivered at a loss because of their educational and cultural value to Bradford, he said.

“We will now need to review, and in some cases close, niche higher education arts provision that can no longer be supported,” Malish added.

He criticised the timing, saying the changes came too late in the business-planning cycle and would place college-based higher education offers nationally at risk.

Bradford will accelerate its focus on employer-led level 4 and 5 higher technical provision in line with the industrial strategy and the West Yorkshire local skills improvement plan.

But Malish warned the wider reductions could harm widening participation and social mobility in a city where many learners were the first in their families to enter higher education.

Luminate Education Group’s allocation fell by £162,366, or 25.7 per cent.

The group said reductions to strategic priorities grant funding for creative arts and computing explained its loss.

University Centre Leeds will continue to offer the affected courses, but Luminate said the funding model failed to recognise their contribution to the UK economy, “creative arts in particular”.

NCG, the largest college group in England, received the biggest cash reduction among the colleges analysed. Its allocation fell by £708,687, or 30.7 per cent, from £2.31 million to £1.60 million.

A spokesperson said its allocation reflected “a number of changes to the funding methodology and eligibility criteria applied across the sector”.

NCG had anticipated the changes and planned accordingly, they added, with “no current plans” to alter its course offer.

Individual changes can also reflect providers’ student numbers, subject mix, study intensity and completion rates.

A government spokesperson said universities and colleges would receive more than £1.25 billion through the strategic priorities grant, alongside £336 million in capital funding over four years.

“While we have had to make difficult decisions across all our budgets, we have protected support for high-cost subjects and funding for students with disabilities and mental health needs,” they said.

DfE pointed to retained funding for chemistry, engineering and physics.

It said removed funding represented less than 3 per cent of total per-student funding once tuition fees were included, while inflation-linked fee rises were expected to generate around £6 billion for the sector over five years.

DfE and the OfS are reviewing the grant to target funding more closely at future skills needs and disadvantaged students.

DfE did not address why college allocations had fallen 2.4 times faster than comparable allocations across all providers.

The Office for Students was approached for comment.