Smaller colleges cold-shouldered by energy capital funding

New energy capital funding announced this week was allocated based on learner numbers rather than need, which some leaders say is unfair

New energy capital funding announced this week was allocated based on learner numbers rather than need, which some leaders say is unfair

Leaders of smaller colleges have been left feeling out in the cold after the government released capital funding allocations for energy projects based on student numbers, rather than need.

Colleges are set to receive a £53 million chunk of a £500 million fund that was announced on Tuesday to help “futureproof” the estates of schools and colleges.

According to the Department for Education, this will work out, on average, as £42,000 per secondary school, £16,000 for a primary school, and £290,000 for a further education college.

But, because allocations were calculated based on ESFA revenue receipts for 2021/22, the range around that average is massive, from £10,000 to £1.3 million, and the efficiency of recipient colleges’ buildings hasn’t been taken into account. 

FE Week understands that the funding isn’t new but instead comes from underspends across DfE’s other capital budgets.

NCG, Capital City College Group and New City College will each receive over £1 million. At the other end, colleges such as Northern College have only received £62,000.

Colleges have been given discretion to spend the funding on “other capital projects” if they deem efficiency projects to be “not appropriate based on local circumstances”.

Northern’s principal and chief executive, Yultan Mellor, told FE Week that the energy efficiency plans her college has developed will need much more than the £62,000 the institution has been allocated.

Mellor believes DfE should have taken on board the state of college buildings when putting the allocations together, rather than use student numbers as a baseline. This methodology allows for “some cash rich colleges and those with efficient building already” to receive larger allocations, she said.

“We’ve got a capital plan to make our buildings more efficient and projects waiting for the green light on our windows, on insulation, there’s loads we’d like to do … but it’s going to need more than the £62,000 we’ve been allocated,” Mellor told FE Week.

On a webinar organised by the Association of Colleges on Monday, DfE officials told college leaders that the same methodology – using student numbers as a baseline – was the current preferred option for the £150 million injection to the FE capital transformation fund in the spring.

‘Blunt tool’ for energy allocations

Another principal described this methodology as a “blunt tool” that won’t benefit the colleges that need the most help.

According to Luke Rake, principal and chief executive of Kingston Maurward College in Dorset, any capital investment from the government “is of course welcome” but the methodology “should consider the needs of colleges with large estates, especially in rural areas” which often come with higher energy costs.

FE Week contacted LANDEX, the representative body for land-based colleges, but they did not respond to requests for comment.

One suggestion for a fairer approach was for a “sensible, guaranteed minimum” for future capital funding allocations.

Paul Deane, principal and chief executive of Grantham College in Lincolnshire, told FE Week that receiving capital funding without complicated match-funding rules was welcome but suggested that there should be a “sensible minimum” in place in order to meet need.

“I’m pleased to get something without match, but the amount is disappointing. One idea is for a higher minimum, perhaps around £250,000. We also need some certainty on revenue funding for energy costs post-April,” he said.

Benefiting better off?

Several principals suggested that DfE should have taken into account previous capital grants so that better off colleges weren’t automatically entitled to more funding.

Since colleges were reclassified as public sector institutions last week, they must use proceeds from asset sales for their own capital investment.

The Department for Education said funding will be paid to colleges in January and can be spent over the next two financial years.

Improvements could include “installing better heating controls, insulation to reduce heat loss from pipes or switching to energy efficient lighting”, the government said.

Education secretary Gillian Keegan said: “We’re putting this cash in the hands of school and college leaders quickly, so they can decide what work is needed and so that our brilliant teachers can focus on teaching in a warm and safe environment.

“Education is rightly a top priority for this government, and we will continue to strive to provide every child with a world-class education.”

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