Funding for adult education and apprenticeships faces “intense pressure” if the government wants to protect schools and 16-19 funding in colleges over the next three years, the Institute for Fiscal Studies (IFS) has warned.
Ahead of the government’s spending review on June 11, an IFS analysis has found that the Department for Education’s (DfE) £86 billion projected budget has a “severely limited” chance of ‘protected’ funding increases due to government commitments to increase health, defence and early years budgets.
This means the government is facing a set of “difficult trade-offs” between evenly spreading cuts of about one per cent in each of the three financial years between 2026 and 2029 between its main spending areas, or protecting some areas and implementing harsher cuts to other spending areas such as universal infant free school meals.
The think tank estimates that rising student numbers in FE colleges and sixth forms will require an extra £290 million each year to prevent cuts to per-student funding.
Trade-off pressure
But protecting schools and the £8.8 billion colleges budget, about 9 per cent of the DfE’s overall funding, would require “concentrating” the full £2.6 billion cut on adult education, apprenticeships, higher education – a real terms reduction of about 20 per cent.
Protecting those budgets as well would result in even harsher 50 per cent cuts to smaller DfE budgets, such as universal school meals or physical education.
This would probably require “cutting entire programmes”, the IFS estimates.
The report concludes: “None of the available options is straightforward. Each involves trade-offs between different areas of the education system, with consequences for the level and quality of provision.
“In the absence of additional funding, difficult choices will be required about which pressures to prioritise and where savings can be realistically made.”
6,500 falls short
Longstanding staff recruitment and retention issues in FE also mean that the government will fall short of the growing need for staff, even if it delivers on the 6,500 extra teachers promised during the election, according to the think tank.
This comes following a further £190 million funding boost to 16-19 education in 2025-26 on top of a share of £300 million announced at the last fiscal event, the autumn budget.
Yesterday, the DfE announced a bundle of skills funding packages, including confirmation that level 7 apprenticeships will be removed for people aged 22 and older and a £345 million apprenticeship budget funding increase.
It also confirmed that a hike to the immigration skills levy, targeted at employers hiring immigrant workers, will fund “up to 45,000 training places”, although details on what type of training remain vague.
Some adult education budgets have already taken a hit under the new government. Mayors were told in March that their 2025-26 adult skills fund allocations will be reduced by around 3 per cent, with some mayors reducing the amount they contract to private providers and others making up the cut from reserves.
Meanwhile, in non-devolved areas, a 6 per cent “affordability” cut will be applied to allocations.
FE ‘crucial’ for productivity
Josh Hillman, director of education at the Nuffield Foundation, which funded the report, said decisions made during the funding review will “shape the opportunities available to children and young people” for years to come.
He added: “The evidence shows that short-term savings decisions risk undermining long-term outcomes – particularly in areas such as further education, skills and adult learning, which are crucial for productivity, labour market resilience and social mobility.
“If policymakers are serious about closing attainment gaps and building a more capable and inclusive workforce, they must prioritise strategic investment across the education system, not just in schools.”
The DfE declined to comment on speculation about spending decisions ahead of the spending review.
The Treasury did not respond to a request for comment.
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