Sector Leaders Warn 16 to 19 Funding Rise Falls Short as Student Numbers Surge

Sector leaders have reacted with disappointment to the Department for Education’s 16 to 19 funding guidance for 2026 to 2027, published yesterday, which confirmed a national funding rate rise to £5,133 for Band 5 students, a 1.6% increase the government has described as a real-terms uplift. Sector leaders argue the rise falls well short of what’s needed, with growing student numbers and rising costs squeezing already stretched budgets.

Julian Gravatt, Deputy Chief Executive, Association of Colleges, said:

“Colleges will be disappointed by the funding announcement today by the Department for Education (DfE).

“Less than six months ago, in the post-16 white paper, DfE ministers promised funding per 16-18 student would be maintained in real-terms in the following year. The DfE calculation that there will be a 1.6% increase shows that this promise hasn’t been kept, and right now, there is a lack of information on the overall budget.

“Statements accompanying the white paper also promised an £800 million cash increase in the 16-18 budget in the DfE’s 2026-27 financial year, but this will mostly be eaten up by the additional 20,000 plus 16 to 18-year-olds enrolled in autumn 2025. These extra students recruited by colleges in autumn 2025 will bring extra income in the 2026-27 academic year (after a one-year lag) but also extra costs associated with more teachers, staff and teaching space. This may leave very little money for pay rises in 2026-27 given that colleges are operating with funding that assumes no or minimal inflation.”

Claire Green, Post-16 and Skills Specialist at the Association of School and College Leaders, said:

“In the post‑16 education and skills white paper, the government committed to ‘a specialist and prestigious further education system that delivers high‑quality education and training for all.’ The funding rate announced yesterday does not align with this ambition, nor does it support the government’s previous commitment to improving the financial stability of the sector.

“The money that has been given to this part of the sector is being spread extremely thinly because student numbers are growing. The paltry 0.5% increase in the learner rate next year means that colleges and school sixth forms will be seeing a real‑terms cut in the amount per student that they receive. The commitment in the white paper of a guaranteed college place in reserve for all 16‑year‑olds will also increase student numbers. It does not appear that this has been accounted for in the new funding rate, and therefore resources will be stretched even further.

“This funding rate also means colleges are likely to struggle to afford staff pay awards, something that risks exacerbating the gap in earnings between FE teachers and their counterparts in secondary schools. It is this same workforce that will be expected to deliver qualifications reform and ultimately educate and train the workforce of the future, something the government knows is crucial to boosting economic growth.

“If this is to happen, colleges must have the resources they need to deliver high‑quality programmes of study, including being able to employ skilled teachers to oversee this. The government has got to see this as an investment in the future, and not something that can be done on the cheap.”