Colleges are independent organisations. They obtain an average of 80% of their income from Government departments and agencies so they can offer education that is free to young people or adults with lower skills or on a subsidised basis, such as apprenticeships.

SFA, EFA and HE Funding for Colleges

Government funding to colleges allows them to education and train several million young people and adults each year to prepare them for work or higher education. Information on the three main funding streams is on official websites:

Capital Funding

Find information on this within the capital projects section.

FE Loans

The new 24+ advanced learner loan scheme is a major challenge for colleges but also an opportunity. Read a short article on FE loans on AoC's blog. Official information for potential loan applicants (students) and practitioners may be useful. This presentation summarises the issues for colleges

The government has consulted on extending loans to all people over the age of 19 apart from those covered by existing entitlements to free publicly-funded education (eg those who are unemployed or young people under the age of 25 taking their first Level 2 or 3). Decisions on this consultation will be made by the end of the year. This AoC note explains the issues and explains our response.

English and Maths Funding Condition

A new funding condition applies to colleges and schools in 2013-14 which requires them to enrol 16, 17 and 18-year-olds on maths or English courses if the students do not have GCSEs at Grade C. DfE's Education Funding Agency will deduct about £5,000 from budgets in 2016-17 for every student who is not enrolled on the right maths or English courses. This AoC briefing note explains the timetable for students and the implications for institutions.

Funding for Large Sixth Form Programmes

DfE's decision to provide money for large academic, vocational and land-based programmes is a welcome acknowledgement that current funding levels are too low but the sums per student are fairly modest, the eligibility conditions are tight and the amount spent will add up to less than £20 million in 2016-17. This AoC note explains the issues.

Free Meal Allocations to Colleges

EFA issued free meal allocations in May 2014 to help colleges implement the policy that 16 to 18-year-olds from disadvantaged families can receive free meals while in education. There are concerns among college managers about whether the funding is sufficient and significant challenges in implementaiton. This note explains the issues.

Funding Online Learning

A short note on the government's response to the Further Education Learning Technology Action Group (FELTAG).

College Finance and Funding

AoC published a report in May 2014 which summarises the funding and financial challenges facing colleges and which suggests some action for government and others to manage the impact of spending cuts.

College Funding and Finance 1 May 2014.pdf (PDF,621.77 KB)

The DfE Budget Black Hole After 2015

AoC's report on the DfE budget after 2015 documents the large gap between Treasury expectations about public spending and cost pressures in the education system including those created by a 10% growth in secondary school pupil numbers between 2015 and 2020, a 5% rise in teacher on-costs  and the costs of maintaining recently introduced programmes. The report makes a conservative estimate that there will be a £4.6 billion shortfall in the DfE budget by 2018-19. We recommend action now to ensure that ministers in future do not make hasty and damaging cuts to funding for 16 to 18-year-olds