Latest news from FE Week

Sussex ruling is a warning shot for the OfS – not the end of the free speech debate

FE colleges with higher education (HE) provision and regulators more generally will have noted with interest the recent High Court decision in The University of Sussex v The Office for Students (OfS).

Not only did the High Court find that the OfS had failed to apply the law correctly in its approach to freedom of speech, it also found bias, concluding that the OfS had approached its investigation with a “closed mind”.

Despite this severe criticism, which is particularly significant for a regulator whose remit depends on correct interpretation of the law and procedural fairness, the OfS has confirmed that it will not appeal, saying in a statement that it wants to “focus on the future” and “learn lessons from the judgment”. However, HE providers should not be under any illusion that freedom of speech and academic freedom has moved down the OfS’s regulatory radar.

The same statement makes clear that the OfS anticipates having a “range of sharper tools” to help it “effectively intervene where freedom of speech or academic freedom is compromised” including the complaints scheme due to launch this September. This will be open to staff, members and visiting speakers of HE providers to raise complaints directly with the OfS about freedom of speech or academic freedom breaches, but not to students.

The OfS adds that “it is important to note that the judgment broadly endorsed the approach set out in our free speech guidance”. The guidance referred to here – Regulatory advice 24: Guidance related to freedom of speech – was published last year, after the OfS’s decision to fine the university £585,000 for freedom of speech related breaches.

The High Court decision highlighted that the guidance has a proportionality test to be applied by organisations when taking decisions in this often grey area. However, the OfS did not apply this test in its own investigation, taking instead what the court considered to be a legally incorrect approach – effectively treating lawful speech as determinative, rather than properly applying a structured proportionality assessment.

The judgment, and the OfS’s response to it, provide some reassurance that a more nuanced approach is correct. That said, such decisions remain highly complex and at risk of challenge.

Governing documents and policies require careful drafting to ensure the right balance is struck and, as the judge noted, even the OfS’s own guidance does not make this an easy task: “The very complexity of the OfS’s own regulatory documents and of the three-step approach relied upon by the OfS illustrates the difficulty of drawing up a simple document, which will meet the various competing legal and good governance requirements.”

The OfS has made clear that it expects HE providers to review their policies and processes, highlighting issues such as the handling of protests and staff recruitment. That review should not be limited to headline freedom of speech codes but should also entail looking at governing documents, equality, inclusion and complaints policies and procedures as well as those for staff and visiting speakers. The importance of consistency between policies and a clear governance framework when it comes to sign off and hierarchy of policies has been underlined by this case.

There are interesting parallels to draw between this decision and recent UK case law involving other regulators. One view is that this case can be read as part of a broader pattern in which courts appear willing to apply closer scrutiny to regulatory reasoning, evidential foundations and procedural fairness in certain contexts (for example in financial services and competition law). In some instances, this has resulted in decisions being quashed or remitted, increasing litigation risk and cost for regulators. The University of Sussex judgment is consistent with that direction of travel, particularly in its rejection of inadequate or overly loose reasoning and emphasis on the critical importance of a clear statutory footing and disciplined analysis.

Concerns may arise where regulators are perceived to be pursuing exemplar or signalling cases – echoing criticism that the OfS appeared to target the University of Sussex to set an example.

There is arguably potential for a more cautious, legally defensive regulatory posture across sectors. It remains to be seen how this will translate once the OfS begins to operate its self-described “sharper” range of intervention tools.

Multiply programme showed us what works in adult numeracy

When adults learn, our society and economy thrive is the strapline for Learning and Work Institute’s Get the Nation Learning campaign. It came to mind while reading the recently published findings of the Multiply programme evaluation.

Rishi Sunak’s £270 million ‘Multiply’ adult numeracy programme, funded courses across England between 2022 and 2025.

The evaluation was unable to show whether the programme improved adults’ numeracy skills, which has generated some debate in the sector. But it did reveal much about how to engage adults in learning.

In some ways, that’s the point: it’s only when adults do actually decide to engage in learning that people, businesses and society benefit from improved skills. You can’t improve people’s skills without engaging them in learning in the first place. So, to borrow a favourite evaluator’s phrase – and without apology for the pun – what should be our ‘key takeaways’ from the Multiply programme?

Clearly, there are important lessons for government around the commissioning of future programmes like Multiply. In an ideal world, much more lead-in time would be allocated for a clear purpose and vision for the programme to be developed from the start. And with sector input on whether the programme’s activities are intended primarily to engage people in learning or deliver outputs such as qualifications. It would have helped ensure that all the funding available in year one could have been used.

That skills gains couldn’t be systematically measured across the programme doesn’t mean that no one improved their skills. There are plenty of examples from across the programme of people developing practical, everyday numeracy skills and confidence in topics like managing money. But early engagement and collaboration with expert evaluators prior to commissioning could have helped develop more appropriate approaches to measuring and capturing improvements in skills, even in the context of short, non-formal, non-accredited learning interventions.

Gains in skills are important, but once the remit of Multiply changed to focus primarily on engagement in learning, the issue of skills measurement becomes less of a priority. And just engaging people in numeracy learning matters. The OECD’s 2023 Adult Skills survey shows that in England, 8.5 million adults have low skills in numeracy and/or literacy.

Adult participation in numeracy learning has declined by around 60 per cent over the past decade, with only around 230,000 people participating in adult maths courses each year. At L&W we believe on current trends, it would take around 25 years to make sure that everyone has the essential literacy and numeracy skills needed for life and work. Of course, we can’t achieve that goal without first getting more people into learning.

The Multiply evaluation findings should be read in this light. The programme made a notable contribution to adult numeracy learning participation, with over 200,000 learners taking part, increasing total numeracy enrolments by 63 per cent compared to the three years before Multiply. Crucially, the evaluators found that 85 per cent of those enrolments would not have happened without the programme.

There were high levels of participation among groups considered to be under-represented in adult numeracy education, including learners with English as an additional language, learners from ethnic minority backgrounds, and people with long-term health conditions. Rates of retention, completion and progression were high, with a third going on to take another numeracy course and a quarter taking a non-numeracy course. Of the learners who went on to further study, 55 per cent subsequently started a qualification bearing course, representing 32 per cent of all Multiply learners. Those skills gains – and the benefits – didn’t show in the Multiply evaluation.

The programme also successfully stimulated innovation in adult numeracy provision. New ways of teaching numeracy – or perhaps more accurately, for too long overlooked ways of teaching numeracy – were developed, including embedding maths in family learning, ESOL and vocational programmes. Delivery partnerships with community and voluntary sector organisations have suffered in recent years, due to funding cuts and the resulting loss of sector capacity. Through Multiply, partnerships were re-kindled and strengthened, and emerged as an effective feature of the programme, although employer engagement remained a challenge. These positive features of Multiply are consistent with the wider evidence on ‘what works’ in getting people into adult numeracy learning.

It’s encouraging that a large majority of Multiply providers report planning to embed elements of their programme into their future adult learning programmes, and just under half plan to continue building and deepening relationships with community organisations to help recruit and engage learners.

Taking forward the learning from Multiply doesn’t just rest on providers, though. It also requires commissioners, including the Department for Work and Pensions and mayoral strategic authorities, to re-evaluate and re-think the priority they afford to opportunities for flexible, non-accredited adult learning.

Within the adult skills fund, that means valuing the tailored learning element, and other flexibilities, to realise the benefits of non-formal learning in supporting the engagement and progression of those furthest away from participation in learning and other skills initiatives. Because if too few adults learn, we risk our society and economy languishing.

Three colleges land share of £80m defence skills fund

Three FE colleges have won a share of an £80 million government fund to increase defence-related education places and improved facilities.

The colleges are part of a group of 24 institutions, mostly universities, that have been awarded funding over the next five academic years from the Ministry of Defence.

All three colleges have already been awarded a share of defence technical excellence college funding: City College Plymouth, Lincoln College, and Yeovil College.

Around £50 million of the £80 million will involve grants that ministers hope will create 2,400 new student places in defence-focused courses such as engineering and computing, at level 4 and above.

The remaining £30 million is capital funding for new, “cutting edge” teaching facilities.

The funding will be distributed via the Office for Students’ (OfS) strategic priorities grant.

The Ministry of Defence said the funding will be focused on areas such as cyber security, robotics, autonomous technology, aerospace engineering and advanced manufacturing.

Minister for Defence Readiness and Industry, Luke Pollard MP said: “We are creating more opportunities for young people across the UK to learn new skills and secure good, well-paid jobs in defence.

“This funding will see 24 superb universities and colleges offer more students places to learn these skills of the future.

“We know our outstanding Armed Forces are only as strong as the industry that stands behind them, and through this investment we’re strengthening our national security and helping drive defence as an engine for growth.”

According to the OfS, which ran the grant competition in February and March this year, the programme funding will support “increased growth” in student places and can cover £7,000 per place on higher cost provision.

Programme funding will start from the 2026-27 academic year and support new cohorts starting each year 2028-29.

The capital funding will be available for three years, ending 2028-29.

In awarding the funding, the OfS was asked to take into account how bidders would increase students on the target courses, alignment with local skills improvement plans, and links to the defence industry.

The £80 million is part of a wider defence industrial strategy skills package, worth £182 million, which also includes, £50 million to set up five defence technical excellence colleges.

Treasury reviewing college free meals freeze but offers no VAT decision timetable

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.

The solutions to the NEET crisis will not be neat

The much-anticipated interim Milburn Report is comprehensive and powerful, especially coinciding with the news that there are now more than 1 million NEETs.

Milburn has articulated the problem with nuance and humanity. But, as he himself said when I saw him last week by chance in Parliament Square, the diagnosis is easy. Creating the solutions is the hard part.

Moving at pace and against the backdrop of major political uncertainty is a huge task and will, ironically, be made harder by the very thing that makes this report so powerful: the human stories of NEETs (those not in education, employment or training), brought to life powerfully and movingly.

Why? Because the power of these human stories will drive stakeholders, the government and backbench MPs to focus on addressing those stories as quickly and directly as possible.

That would be a mistake. Scare resources, energy and political capital need to go on solving the causes, not addressing the symptoms.

The NEETs crisis is a system crisis. The solutions need to be systems solutions.

Yes, we need more youth provision, to add to the amazing work of long-established charities like The Kings Trust, Generation, Spear and Onside Youth Zones, and more recent various youth hubs and trailblazers. Vital though this type of activity is, more of it, on its own, does not solve the NEET crisis.

Why not? Because while these services are designed to catch and support young people at risk, they cannot, on their own or at scale, lead to NEETs becoming self-standing individuals in the labour market.

Instead, the Milburn prescription must add three more interwoven strands of activity to work with reinforced youth services. All are needed.

1) Employer desire

Without employers employing young people, there is no solution to the NEET crisis. While we might temporarily render someone not NEET by getting them onto a course, in the end they need the employment ‘E’. And each and every employment E depends entirely on an employer’s discretionary decision to employ a young person.

Government should be bending over backwards to create the conditions in which employers want to do this. First, they need to reduce the costs of employing young people. National insurance contribution (NIC) exemptions are not enough: overall employer NICs, youth minimum wages and the Employment Rights Act all need to be softened.

Second, they must run a sustained ‘hearts and minds’ advertising campaign to make firms feel good about employing young people.

Third, the government must re-embrace the levy as an elegant mechanism not just of securing funds for training, but also of securing that precious commodity: C-suite ownership of ‘their’ apprenticeships and skills programmes.

Finally, government must actively support independent training providers (ITPs) and other providers to engage employers. Recent government defunding and half-cooked product launches have done the opposite: there is remedial work to do here first.

2) Focus on optimising existing programmes

This needs to happen so that they work better and, crucially, are better connected to each other. Make sure young people on pre-employment/pre-apprenticeship programmes are not punished by the benefits system.

Remove disincentives (such as achievement rate measures) that stop ITPs and colleges moving a young person on and up when it is right for them.

Stop pretending that skills providers have a magic inflation cloak: increase funding bands, especially of those at level 2 and level 3 that are the turning points for many young people as they shake off the NEET label.

Crucially, Milburn and government must embrace the fact that sometimes the best way to help someone who is NEET is to train and promote someone who is not NEET, in order to free up the precious entry level berth, to give employers confidence and to role model to NEETs looking on what can happen.

3) Confront the truth staring us all in the face

The school system and the obsession with GCSEs systematically destroys the self-belief of between a quarter and a third of all young people when it should be doing the opposite.

Complex, complicated and not neat. But the right approach.

DWP launches hunt for 25 jobs guarantee national delivery partners

Applications have opened for organisations to deliver the government’s national jobs guarantee, with ministers expecting the scheme to support more than 90,000 long-term unemployed young people across Great Britain.

The subsidised work programme for 18 to 24-year-olds who have claimed universal credit for more than 18 months will expand from six pilot areas to 25 regions from November. The rollout is expected to run for two years, with the option of a one-year extension.

A five-week grant application window opened today and will run until July 13, with organisations specialising in employment, skills, youth services and wraparound support invited to bid.

Ministers now expect the scheme to support up to 90,000 young people, up from previous estimates of around 55,000.

Announcing the application window opening, work and pensions secretary Pat McFadden said: “This national rollout marks a significant step in delivering our commitment to every young person that they have the opportunity to succeed.”

He added that he was “grateful” to the six organisations delivering the first phase of the jobs guarantee in six areas of the country, who worked “at pace” to achieve the first job starts in May.

Delivery partners will receive between £2,150 and £2,650 per participant, while the government will separately cover employers’ costs for 25 hours a week at the national minimum wage for six months, as well as up to £250 in onboarding costs.

According to guidance documents, areas including Birmingham, Solihull and Coventry, Greater Manchester and West Yorkshire are expected to see demand of up to 4,200 young people recruited onto the programme.

Areas with the highest projected demand could receive grants worth up to £11 million over the initial two-year rollout.

Referrals, which can only come through Jobcentres, are expected to begin in November, with the final funded employment placements due to start by May 2028.

It comes amid growing concern over Britain’s rising number of young people not in education, employment or training (NEET), with estimates suggesting the total has exceeded one million for the first time in 13 years.

Delivery partners could include specialist support organisations, charities, local authorities and mayoral strategic authorities.

Organisations may also partner or subcontract in a region, provided a single lead organisation is identified for each of the 25 areas.

The Growth Company and Reed in Partnership, both existing phase one delivery partners, have already published advertisements seeking organisations to join them in bids for the national rollout.

‘Meaningful paid work’

Department for Work and Pensions guidance states that delivery partners will be responsible for sourcing “meaningful paid work” opportunities, matching suitable young people to employers and providing wraparound support and training throughout placements.

Jobs must include a clear description of duties and responsibilities, appropriate supervision and opportunities to develop skills. They must not displace existing employees.

The guidance also limits the number of jobs guarantee participants an employer can host. Organisations with 10 to 49 permanent employees, for example, may recruit one participant for every four full-time employees, up to a maximum of six participants at any one time.

If a participant leaves before completing six months, delivery partners will be expected to try to re-engage them. Where that is not possible and they have completed less than four months in work, partners must attempt to find them another job through the scheme.

The guidance also confirms that apprenticeships may be offered through the guarantee “where appropriate”, provided delivery partners are satisfied that the option is suitable for the individual.

CITB launches fast-track apprenticeship ‘hub’ grants

A construction skills quango has launched an “accelerated apprenticeships” grant programme that will fund its network of 20 training “hubs” first promised in late 2024.

Over the next three years, the Construction Industry Training Board (CITB) is offering grants of up to £33,625 to 20 colleges and ITPs that agree to deliver “significantly shorter” apprenticeship completions for roles such as bricklaying, decorating, and carpentry.

Each provider will be expected to commit to starting 42 “accelerated apprentices” per year for at least two years, delivering a total of 1,680 starts across four years.

The grant programme for 20 existing training providers appears to backtrack on a government claim that CITB and partners, including the National House Building Council (NHBC), would open 32 “purpose built” centres.

In November 2024, the government announced that fast-track apprenticeship training and a network of up to 32 new “home building skills hubs” funded by the CITB and NHBC would make 5,000 more construction apprenticeship places available per year by 2028.

At the time, the NHBC promised to spend £100 million opening 12 new hubs while the CITB said it would invest up to £40 million to bring the network of hubs up to 32, running them in partnership with training providers and employers.

But it has now emerged that 20 of the “hubs” will be existing colleges and training providers who have joined the accelerated apprenticeships programme.

Reward acceleration

Under the £672,500 accelerated apprenticeship programme, the CITB said training “must be delivered” in a way that apprentices complete within 14 to 18 months rather than the standard two to three years.

This should be through “flexible” delivery methods such as “front-loading” initial training in an intensive block and structured periods of one to two weeks “concentrated learning” interspersed with on-site learning.

In the first tranche of grants, expected to launch in September this year, five providers will be selected from Greater Manchester, West Yorkshire, West Midlands, Kent, and Bedfordshire and Hertfordshire.

Three future tranches of 15 regions will be confirmed, five per year, over the next three years.

The CITB has promised that its new entrant support team will help providers with apprentice recruitment, accessing CITB grants, signposting employers and “mentor training” for in-house staff.

It will judge providers based on seven key performance indicators including number of apprentices, retention rate, completion rate, and employment outcomes.

CITB CEO Tim Balcon said accelerated apprenticeships are part of a “step change” in changing how people train for construction careers.

He added: “But it’s not just about getting people through training faster.

“As an industry, we need to place greater focus on outcomes – ensuring that apprenticeships lead to sustained, high-quality employment.

“That’s how we build a workforce that is not only larger, but more resilient for the future.”

The CITB said the accelerated apprenticeships programme will feed into its new national construction mayoral network that is due to launch later this year.

To apply for the grants, providers must be registered on the apprenticeship provider and assessment register without restrictions, have a ‘good’ or ‘outstanding’ Ofsted rating for overall effectiveness and be clear of any audit red flags. They must also have a “formal endorsement” from a major local homebuilding firm.

NHBC hubs

Since 2024, there have been around 370 starts at the NHBC’s network of physical training hubs, which include one new multi-skilled housebuilding hub and four established apprenticeship training hubs that focus on bricklaying and groundworks training.

The building insurance warranty provider, which has a construction skills training arm, has opened one multi-skilled housebuilding hub since 2024, and plans to open two more this year.

It told FE Week its “effective and high quality” training model has a completion time of around 16 months.

New post-16 SEND inclusion cash revealed

Colleges and training providers will receive a share of £73 million next month from the first year of the government’s inclusive mainstream fund.

Allocations for 303 colleges, training providers and universities for the promised funding were published today alongside best practice guidance on better meeting the needs of SEND students in mainstream settings.

It comes as part of the government’s multi-billion pound SEND reform plans. The Department for Education committed £500 million per financial year for an inclusive mainstream fund covering early years, schools and 16-19 across the next three years.

DfE today published the full breakdown of 16 to 19 grant allocations for the 2026-27 financial year, calculated from disadvantaged learner numbers in the 2025-26 academic year.

Adding in schools, the fund will pump £83 million into 16-19 education this year. Grants range from £3,000 to £1.38 million.

Of that, 78 per cent – £64.6 million – will go to further education colleges. Land-based colleges and sixth form colleges will receive £1.9 million and £1.7 million respectively. Just over £4 million will go to independent training providers.

Large FE college groups NCG, Activate Learning and New City College will receive just over £1.3 million each.

The inclusive mainstream fund (IMF) is intended to improve adaptive teaching, create accessible learning environments and provide targeted interventions for learners with extra needs.

Individual provider allocations were calculated using DfE’s methodology for 16 to 19 disadvantage block 2 (DB2) funding rates, which top-up cash for students with low prior attainment.

IMF funding is weighted according to the intensity of the study programme, with T Level students attracting the highest rate of £160 per student. Students on large programmes will be paid £118 per learner, and those on smaller courses have a per-learner rate of £72.

Area cost adjustments will also be applied to each institution’s allocation.

Recipient institutions will be required to set out how they use the funding in their annual accountability statement. They also must explain how they respond to SEND and local skills needs. Using college performance data and financial health rating, DfE can subsequently consider intervention if outcomes are “weak”.

Inclusion expectations

DfE also announced today a new national panel of experts to develop ‘national inclusion standards’, intended to give colleges “clearer expectations” on what good support is expected of them.

The panel, co-chaired by academy trust boss Tom Rees and NHS England’s head of clinical innovation research Anne Gordon, features nine experts, including Ben Bastin, chair of Natspec and head of Treloar College.

Bastin said: “I am excited to join the panel at such a pivotal time for SEND reform. I look forward to bringing both my personal and professional experience of specialist provision and the transition to adulthood to ensure these changes support children and young people in a more inclusive 0 to 25 system.”

The inclusion allocations were published alongside the first breakdown of local authority funding for the government’s flagship external support ‘experts at hand’ service.

The white paper committed £1.8 billion over three years to experts at hand and £200 million in transformation funding.

Councils will split £429 million this financial year, and new guidance today said DfE expects to ramp up funding in 2027-28 to £750 million and £850 million in 2028-29.

See the full inclusive mainstream fund allocations table below:

‘We need to expect the unexpected’: Colleges brace for energy emergencies

Donald Trump’s decision to strike Iran may seem far removed from England’s colleges, but it could put a severe dent in their balance sheets. Russia’s invasion of Ukraine in February 2022 unleashed an energy crisis that sent college utility bills soaring by 59 per cent in a single year and left some institutions facing severe financial pressures.

The sector enjoyed a welcome reprieve in 2024-25, when energy costs fell by 16 per cent. Yet that recovery remains fragile.

While total college income has increased by 30 per cent in the past four years, energy costs have risen by 44 per cent, according to DfE’s latest data.

Colleges typically lock in energy prices years in advance, and renewed pressure in wholesale gas markets and electricity network charges could leave many facing sharply higher costs when contracts are renegotiated.

Julian Gravatt, deputy chief executive of the Association of Colleges, believes the “biggest immediate risk” is for colleges with fixed-price contracts expiring in autumn 2026.

“What happens in the coming months is impossible to predict, but I just think we need to expect the unexpected,” he says.

The sector’s response to the last energy crisis was a mixture of emergency measures, long-term investments in decarbonisation of their estates and a more collective approach to procurement.

While ministers expect expanding renewables and nuclear power to reduce the UK’s reliance on volatile gas markets over time, colleges remain exposed to short‑term energy price shocks because electricity costs are still strongly tied to gas‑fired generation.

Colleges are also facing rising costs beyond the wholesale energy market.

Industry analysts expect network and system charges to account for an increasingly large share of electricity bills, with some forecasts suggesting they could approach 60 per cent of total costs even if wholesale prices stabilise.

Unlike some industrial companies that can schedule their energy use to secure time-of-day-savings, education providers cannot shift timetables away from Monday-to-Friday, 9-to-6, term-time hours. One college leader who was facing high network charges several years ago recalled needing high “available capacity” to run a large number of industrial workshops at certain times of the year (November, and January to March) , but still having to fix the capacity for the full year at “exorbitant rates”.

Ukraine fallout

The outbreak of war in Ukraine left colleges suddenly facing eyewatering energy contract price rises.

Gravatt recalls receiving one call at the time from a principal whose college was facing a sevenfold increase in its energy bills.

The government introduced an £18 billion energy relief scheme in October 2022, which helped cap the problem, but it was replaced six months later by a less generous scheme. These initiatives provided “nowhere near enough” support, says Craven College deputy CEO Gareth Dixon.

From when Ukraine was invaded in 2022 to when Craven College’s £200,000-a-year energy deal was set to end in December 2023, Dixon was sent weekly emails by his energy broker with price projections that filled him with horror as the figures kept rising.

Their bills soared to almost half a million pounds in 2022-23, which meant the college was unable to offer as generous a pay award as Dixon would have liked.

“We were forced to enter some short-term contracts to try and get us over the hump, thinking that price volatility will calm down. It didn’t,” he says.

Energy has been part of a broader cost shock for FE, alongside pay inflation, construction price hikes and national insurance increases.

Colleges responded to the energy price hikes they faced by rationalising their estates, bidding for decarbonisation grants and collaborating in energy procurement with other organisations to lock in the lowest pricing.

West London College saw its energy costs double between 2021-22 and 2023-24, from £671,000 to £1,219,000, while the college was also lumbered with paying off a £13.7 million loan to the Education and Skills Funding Agency.

Chief executive Karen Redhead recalls how the three boilers serving its sprawling Hammersmith campus were “well beyond their shelf life”, while its heating system lacked even a thermostat to regulate temperatures.

The college struggled to access DfE capital funding and sustainability grants, which Redhead described as “drastically oversubscribed”. But more recently, it has obtained some DfE capital funding to replace its boilers.

Some colleges have taken radical steps since the Ukraine war broke out to reduce their energy costs.

South Essex Colleges Group saw its energy bills almost triple from about £1.2 million in 2021-22 to £3.16 million in 2022-23, leaving its cash reserves “in single digits”.

The group introduced a four-day week across its three campuses, partly as a response to these hikes. Its energy bills dropped to £1.87 million in 2024-25, although the group has flagged the replacement of its air handling units as a “key risk” costing more than £1 million.

Carbon capital

The government’s public sector decarbonisation scheme, run by Salix, launched in 2020, saw more than £120 million allocated to colleges to replace inefficient heating systems and reduce energy bills.

The fund, which quietly ended last year, helped some colleges reduce their long-term energy costs. As colleges have decarbonised, a marginally bigger share of their energy costs has gone on electricity rather than gas. In 2022-23, FE colleges spent 74 per cent on electricity, 25 per cent on gas and 1.4 per cent on other energy sources, but by 2024-25, this had shifted to 78 per cent spent on electricity, 21 per cent on gas and 1.4 per cent on other sources.

Colchester Institute, which received a £3.7 million decarbonisation grant, was paying £1.01 million for energy bills in 2024-25; its lowest level since 2021-22.

But not every project delivered as planned. Hopwood Hall College mothballed a £1.8 million project due to soaring costs and diverted the money instead into extending a building.

Middlesbrough College secured £4.9 million in 2024 to support low-carbon heating and renewable energy generation, with the college contributing a further £1.2 million.

Middlesbrough’s vice principal for campus and digital services Sara Marshall, says reducing energy usage and using “more intelligent HVAC controls” (devices that control the operations of heating, ventilation and air conditioning equipment) are a “key priority, helping the college strengthen both our commitment to sustainability and our financial resilience”.

Combined with additional solar investment through the government’s GB energy solar partnership programme, these projects helped Middlesbrough reduce energy consumption by up to 8 per cent year on year despite growing student numbers.

DfE told FE Week that colleges are “proportionally overrepresented” in the programme, which aims to install solar panels on about 250 schools and colleges, mainly in deprived northern areas, by this summer.

Middlesbrough College Group’s solar panels

Solar-powered FE

No official national figure exists for the proportion of FE colleges with rooftop solar panels. However, sector evidence suggests solar is now common across larger college groups and land-based colleges and likely more widespread than in schools, where the government has said about one in five sites have solar panels.

In 2025-26, Inspire Education Group (IEG) installed additional solar panels and replaced all LED across its campuses, yielding a 40,000 KwH drop in electricity consumption.

The rooftops on Eastern Education Group’s buildings are now “chock-a-block” with solar panels, says its CEO, Nikos Savvas, while many of its boilers have been replaced with woodchip biomass boilers. “I have a team tasked with going through and trying to find grants for this kind of work,” he says. The energy costs for its West Suffolk College campus were lower in 2024-25 than in 2021-22 (£662,000 compared to £689,000).

Although Savvas believes there is widespread concern about the Iran War and its potential impact on energy bills, he is more concerned about the longer-term impact of climate change.

“We have a big team looking at becoming completely net zero, and how we can pretty much become self-sufficient,” he says.

But Martin Jenkins, director of training at the Textile Centre of Excellence, argues that many training providers lack the roofing infrastructure to accommodate the number of solar panels needed to make a sizeable difference to their energy bills.

Taxing tensions

Another threat facing colleges is a potential spike in VAT rates on their energy bills. Energy bought by colleges qualifies for a partial VAT exemption, where a college can show that the energy is being used for a non-business use.

However, colleges could lose this favourable 5 per cent VAT tax rate following a Court of Appeal ruling in favour of Colchester Institute in March. The decision enables colleges to reclaim VAT on pre-2010 building projects, but by doing so it also opens the door to new HMRC tax rules that could remove reliefs on energy bills, among other things.

“Reliefs might be removed, but there’s no information on when, how or what else might happen,” says Gravatt.

Economies of scale

Most colleges now get their energy via brokers such as SE First (Sustainable Energy First), TEC (The Energy Consortium), and Dukefield Energy.

The more organisations that join a procurement consortium, the more that costs potentially go down.

DfE advises colleges to aggregate their utility services where possible, and now strongly links energy procurement with net-zero and condition funding.

IEG uses SE First to procure its gas and electricity. Its chief operating officer, Ed Thomas, says that when either of the maximum or minimum price thresholds IEG have agreed to are met, the group then purchases energy for the year.

Using this model, the group secured gas at 69p per therm for the next five years when market prices were about 125p per therm.

“We purchase from future markets as opposed to the day ahead energy market,” Thomas says.

This model also allows IEG to sell energy if the price drops and repurchase at a lower rate from the future market. All IEG’s electricity is now procured from “wholly renewable sources” that cost less than it paid in 2024-25.

Those hit hardest

Land-based colleges have been among the most exposed to energy price shocks because of their large estates, animal centres and specialist facilities. Reaseheath, Askham Bryan and Myerscough colleges all saw energy costs more than double between 2021-22 and their post-Ukraine peaks before costs began to ease in 2024-25.

Myerscough College’s costs almost tripled between 2021-22 and 2023-24. Last year, it closed its Witton Park campus partly to lower costs.

Reaseheath College and University Centre installed air source heat pumps in several areas in 2024, reducing its gas consumption.

“As a specialist land-based college, we also see cost variations across our wider operational activity, including the running of a working farm,” its spokesperson said.

Given their access to woodland and forestry products, ample space for fuel storage silos and agricultural engineering expertise on campus, land-based colleges have adopted biomass heating systems more readily than other colleges, with Reaseheath, Askham Bryan, Myerscough and Easton (now part of Norwich City College) having all used them.

Gareth Dixon, deputy CEO, Craven College

Eyeing the horizon

If wholesale prices stay high, the government may provide further support to bring down energy bills, but the chancellor has indicated that this would only be for “those who need it most”.

When asked if more support was forthcoming for the sector, a DfE spokesperson said it recognised “the rising cost of energy is causing concern” and pointed to how its estates guidance “helps colleges reduce energy demand and carbon emissions when planning capital investment”.

Like many FE leaders, Dixon has learned the hard way to be well prepared and look out for any potential energy price shocks on the horizon.

Just before Trump’s attacks in the Middle East, seeing that tensions were rising, he locked in a £300,000-a-year deal in December over three years before prices began to escalate.

“We’re getting that longer-term price security, because global crises have an impact at our front doors now,” he says. “Who would have thought what’s happening in Iran would affect us? I think FE leaders are more aware of these issues now.”