The higher education regulator has announced 134 colleges will receive over £20 million in funding to invest in their buildings, facilities and equipment.
The Office for Students (OfS) has allocated one fifth of a £92 million capital funding package to FE providers, comprising £80.75 million available through a bidding exercise, as well as £7.75 million distributed through a formula.
Seventeen colleges won bids for £16.8 million worth of the project funding where providers were invited to bid for between £150,000 and £2.5 million of capital funding.
Bidders were required to demonstrate how they would address the government’s industrial strategy and priority sectors for growth, meet local needs and demonstrate value for money.
“The project will provide value for money and support environmental sustainability in reducing energy usage,” the OfS criteria said.
Another criterion was to demonstrate how funding would directly support the purchase of equipment or replacing, constructing or expanding teaching/assessment facilities.
The OfS said it received 193 bids requesting a total of £288 million and ultimately signed off on 60 bids equating to £80.75 million.
“Initially we had thought that we would be able to fund 30-40 bids, but we found that many proposals had adopted a proportionate approach to the funding requested and combined with the additional money from government this meant we could fund more bids than we had expected,” the OfS added.
The regulator added that for future bidding rounds, it would improve guidance after it spotted bidders were requesting funding for larger investments and projects that were already underway.
The largest FE winner was Truro and Penwith College, which was allocated over £2 million and will create a specialist computing lab at its Truro campus for cybersecurity and AI provision.
It told the OfS that it will also use the money to purchase up-to-date digital equipment for construction, nursing and psychology courses as well as more interactive classroom technology.
The college added that it aims to increase student numbers by 180 and address regional digital and other skills shortages identified in the LSIP with this work, all to be completed by next March.
Yeovil College was also awarded £2 million, which will be used to revamp the ground floor of its engineering building with specialist technology by March 2026. It also wants to reconfigure teaching spaces for advanced manufacturing, clean energy, and defence engineering courses.
Meanwhile, FE colleges received just under half of the £7.75 million calculated through a formula.
The OfS capped this year’s capital funding allocation to £30,000 to strike an “appropriate balance” that the majority of providers that meet the £10,000 minimum threshold can receive a “meaningful sum”.
117 providers were awarded allocations up to £30,000, but six eligible colleges will not receive any formula allocation because the formula calculated an award under the £10,000 minimum threshold.
The OfS calculated this year’s allocations by taking the funding rate per full-time equivalent student as well as individualised student data from 2023-24 HESA and ILR data.
It added that it will monitor the formulaic funding allocations in April 2026 to understand how the funding has been used and whether there are any underspends to reclaim.
“This was a very competitive funding round, and the projects we are supporting will make a tangible difference to current and future students,” said OfS director of resources and finance Nolan Smith.
“As well as expanding opportunities for students in strategically important subject areas, these projects will offer a boost to local and regional economies and promote national growth.”
Skills minister Jacqui Smith said: “This government is committed to supporting colleges and universities as engines of opportunity and growth up and down the country.
“This cash boost from government ensures young people are using the most up-to-date tech and facilities, helping them to secure a future in the well-paying, highly-skilled jobs that are crucial for our plan for change.”
“It will help build towards the prime minister’s target of two-thirds of young people taking a gold standard apprenticeship or heading to university by the age of 25 – driving prosperity for families in every town and city.”
See the table of formula winners here:
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