A surge in the teenage population and big demand for technical education courses might sound like great news for colleges. But government funding decisions have burdened such opportunity with financial risk, due to a lack of money and physical teaching space.
This academic year, colleges enrolled 32,000 extra young people with no additional funding. And the outlook for next year is just as concerning – a snap survey of 114 colleges by the Association of Colleges last month revealed they were expecting 22,106 more 16 to 18-year-old students than the 440,524 they will receive funding for.
Just over half (12,642) of these applicants are at risk of being denied a place because of the lack of funding – which risks fuelling the NEET (not in education, employment or training) crisis.
Repurposing space
To meet need, colleges are knocking through walls, installing portable buildings, and turning factories, warehouses and shops into classrooms and workshops, sometimes miles from main campuses.
Shrewsbury College has grown its 16-to-18 student numbers by around 1,200 in the last six years to 4,400. Applications for next year are 600 higher than this time last year, with some courses already closed and temporary classrooms being installed for September.
The college is turning students away from courses in electrical, plumbing and engineering because “we just haven’t got the workshop space”, which is “heartbreaking”, said principal James Staniforth.
Expanding provision by “adding a bit here, a bit there” has left Shrewsbury “managing several different small-scale building projects that you’re paying for out of your operating surpluses”, he explains.
“We’ve remodelled corridors and floors and taken walls out to expand teaching space, but this means losing space we would have used for other things.”
Last year, a new learning centre replaced the college’s only hall, so “we lost the only space to get 200 people together at one time”.
“It’s the social space which you don’t get any funding for that’s being lost, and that’s challenging.”
Shrewsbury College principal James Staniforth
Crammed construction
The trades are the biggest pinch point.
Nearly 9,500 young people will be unable to start on their desired construction course next academic year due to college capacity constraints, AoC’s poll found.
In Bradford, which has the largest cohort of 18 to 24-year-olds claiming universal credit in the UK (11 per cent), Bradford College received four applications for every place on its 16-to-18 construction programmes last year, with applications for this year up another 20 per cent.
The college is paying from its own pocket to boost its capacity for bricklaying, plumbing, electrical and carpentry and joinery.
Dudley College of Technology, which was given construction technical excellence college status last year, had to close applications for several programmes in March after receiving more than double it had capacity for. Now, over 400 young people are on waiting lists for carpentry, electrical, plastering and plumbing courses.
The bottleneck is feeding the area’s NEET numbers. Last year, Dudley had the lowest percentage (82.2 per cent) of 16 to 17-year-olds in education or training of any area in England.
CEO Diana Martin said Dudley had “decamped” its electrical provision into a repurposed storage area, and transformed office space into workshops and classrooms.
Six miles down the road, Halesowen College had historically signposted those interested in construction-related courses to Dudley. But Halesowen’s CEO Jacquie Carman felt that with the “massive problem in our area with NEETs we didn’t want to keep letting these kids down”, so launched the college’s first construction curriculum.
Following a “very modest pitch” for construction courses at the college’s open days in October and November, the college will start teaching around 150 construction students in September.
Collaboration was key. Dudley’s CTEC lead sat on the interview panel for Halesowen’s head of construction appointment, and paid the first three months of Halesowen’s construction department salaries from its CTEC funding.
Dudley College Campus photography 2024 .Picture by Shaun Fellows / Shine Pix Ltd
Lower-level squeeze
With more young people falling out of the school system early, local authorities are struggling to forecast how many FE places are needed.
“It’s very difficult to quantify numbers based on local authority population estimates,” said Craig Hodgson, CEO of Newcastle and Stafford Colleges Group (NSCG). “We can see the young people coming through schools, but quite a large number are being home-schooled.”
NSCG has grown by 1,240 students in the last three years. But the number of NEET/not known 16 to 17-year-olds in Staffordshire has rocketed in that time from 3.3 per cent to 6 per cent.
Nationally, the number of 16 to 18-year-olds surged by 230,000, or 13 per cent, between 2017 and 2024, and will rise by another 110,000 (5 per cent) to a peak in 2028.
But James Farr, director of the Think consultancy, warns that Office for National Statistics (ONS) population projections are dated, and says some colleges face “unprecedented demand for places in areas ONS claims are seeing comparatively modest growth in population”.
Between 2023-24 and 2025-26, student numbers in colleges rose by around 7 per cent a year, compared with around 1 per cent growth in school sixth forms and 2 per cent growth for sixth-form colleges.
This has been fuelled by a 34 per cent rise in 16 to 17-year-olds enrolling on level 2 courses between 2022 and 2024, with level 1 numbers also rising 5.1 per cent. By comparison, level 3 numbers grew only 3.6 per cent.
Despite this, much of the government’s policy attention has been on level 3 provision, particularly T Levels.
Chris Webb, CEO of Bradford College, believes the level 3 policy focus has led to “under-investment in the lower levels”.
Capacity funding black hole
Colleges receive post-16 capacity funding to help them cope with excess demand, but most of last year’s cash went to Leeds and Greater Manchester as the regions deemed by the DfE to have the highest need.
Webb feels Bradford, which also has acute capacity issues, has been treated like it is “second class”.
But even though Luminate Education Group received £8 million of Leeds’s £10 million pot, its CEO Bill Jones said the money was “not enough to do what we need to create the capacity Leeds needs”.
Luminate spent its money on a 127-year lease for a former office building to create up to 1,500 extra places in a new health science academy.
Meanwhile, devolution means half of post-16 capacity funding is now “disappearing into a black hole”, according to James Kewin, deputy CEO of the Sixth Form Colleges Association.
In total, 18 mayoral combined authorities and councils will receive £184 million in post-16 capacity funding and £99 million for construction skills capacity funding out of a £570 million pot for the years 2026-27 to 2029-30.
“At a very basic level, some colleges are struggling to find out who to talk to in strategic authorities,” Kewin said.
Bill Jones, Luminate CEO
Nowhere else to go
Another pressure for colleges is that more young people are choosing technical subjects which require more space per learner. Farr conducted a review of DfE data which showed enrolments by under-19s in construction and creative arts are growing faster than the average.
NSCG has around 700 learners on T Level programmes, which Hodgson explains require “more space-hungry” specialist facilities and more hours of teaching, which adds “extra demands on space and teachers”.
Farr believes some areas also have less provision available to re-engage NEETs midway through the academic year, as fewer specialist providers are now working with hard-to-reach young people than was the case before the Covid pandemic.
The Local Government Association said many councils believe more independent training organisations are needed to provide a broader range of settings, but “DfE is reluctant to expand the provider base”.
The lack of alternative provision in Leeds was highlighted in the minutes of a recent Luminate board meeting, which stated that whereas in the past some students would have been signposted elsewhere “to ensure they succeed”, now there was “no longer anywhere to refer them to”.
Growth funding challenges
Sudden increases in student numbers are financially risky for colleges due to the DfE’s “lagged” funding model, which allocates cash based on the previous year’s enrolments. When numbers surge, colleges must absorb the cost unless there is in-year growth funding from the government.
The DfE announced this week it will only fund “approximately three-quarters” of this year’s growth. But David Hughes, CEO of the Association of Colleges, calculates that factoring in non-teaching costs, this growth funding will barely cover half what colleges have spent.
Hughes wants a “proper demand-led funding, like universities have for their students”.
“Without that investment, the pressures caused by extra students will only get worse, resulting in colleges turning students away, and NEET numbers rising,” he warned.
East Sussex College Group’s board last year reported cashflow issues, after taking on 175 additional students in 2024-25 and suffering an in-year growth funding reduction. It stated “future growth in student recruitment would need to be carefully managed” to mitigate against the risk of this happening again.
The group added: “This created certain ethical considerations for the college as its ability to continue subsidising rising demand was being diminished… the board reluctantly acknowledged the need to support a college-wide approach to consistently use waiting lists for high demand subject areas, rather than subsidising and overextending its provision delivery.”
While student numbers have increased, the number of staff working in FE between 2023-24 and 2024-25 dropped from 204,800 to 203,000, with the number of teachers declining from 81,900 to 80,500.
This puts extra strain on existing staff, especially given the recent government announcement that the 16-to-19 funding rate will only rise by 0.5 per cent in 2026-27.
Bradford College principal and CEO Chris Webb
Waiting for places
Waiting lists are generally viewed as being a blunt tool to tackle the capacity problem. Webb believes they “don’t work”, because those young people should be on an alternative course in the meantime.
“When they disengage from learning, you can lose them for life,” he said.
Hodgson “tries not” to keep waiting lists at NSCG as he believes they give learners “false hope”.
Instead, he refers young people to other colleges in the area, but the “challenge” now is “all those colleges are experiencing population growth”.
Derby College tried a different approach last year by introducing a university-style clearing process to help it retain students who could not get onto their first choice of course.
Clearing events were held for individuals who had not yet engaged with the college, and although the college was unable to guarantee places through clearing, other providers attended to offer alternative opportunities.
SEND rise
A large rise in young people with special education needs has also added to the capacity problem, as these students tend to require smaller class sizes and increased teaching support, and those with SEMH needs typically struggle in crowded environments.
A rise in learners with EHCPs was a “significant issue” for Hopwood Hall College, creating “additional pressures in relation to increased staffing costs”, its governing board said.
The increase in learners was classed as “severe” in its risk register, with demand having “exceeded expectations” in areas including construction, electrical engineering, and health and social care in 2024-25. The college is in Rochdale, where the percentage of 16 to 18-year-olds in education or training fell from 94 to 89 per cent between 2021 and 2025.
Picture by Shaun Fellows / Shine Pix Dudley College photography
Building alternatives
Capital projects do not provide immediate solutions as they can take many years to materialise.
“Even if I were to get the money that I needed today for construction skills shortages, it probably wouldn’t address the issue for another two years,” said Webb.
“We’re in a challenging environment now – there needs to be better planning for the future to avoid getting to these pinch points.”
Mark Dawe, chief executive of The Skills Network, believes the solution to the short-term demographic bulge lies in more online delivery.
His provider has proposed a hybrid model of 30 per cent online and 70 per cent in-person delivery to college partners and is in the “early days of setting up a pilot in a couple of areas”.
The government aims to tackle the problem of young people being left without placements by improving the transition to post-16 education, including through “automatic” enrolments at colleges and a national tool for identifying children at risk of becoming NEET.
But without further capacity investment for colleges like his, Webb believes it is inevitable that some young people will suffer.
“That’s what upsets us most,” he said. “I think of the NEETs in our city and I think, ‘I could do much better for them’.”