Capital Projects

The college estate

There are 175 FE college corporations and 45 sixth form college corporations operating from more than 4,500 buildings on 850 sites. The college estate is valued at £11 billion for education use and provides 9 million square meters of gross internal floor area (GIFA). High quality further education requires sufficient and suitable space for students as well as cutting edge industrial equipment. That is why colleges have taken care with their estate over 30 years of self-government and why DfE, as part of its renewed commitment to skills, is part-funding improvements and modernization for the 2020s.

There are three main reasons why colleges need suitable buildings

• Fit for purpose space: Education and training requires sufficient and suitable space for students with heating, acoustics etc as considerations. Colleges educating younger and vulnerable students need to have suitable security to meet safeguarding requirements.
   
• Buildings that meet student expectations: Colleges compete for students with other colleges, with schools, universities and training providers. High status education institutions spend a lot on making their buildings attractive and fit for purpose which sets the tone. Where technical education is competing against academic education, attractive buildings assist. DfE-supported research by Frontier Economics (2012) and LSE’s CVER (2021) has confirmed a sound economic basis for capital investment.
   
• Lack of an alternative way to provide technical education: Technical education and apprenticeship training can, in some cases, take place in employer’s premises in specialist rooms or spaces in a larger facility. In many cases, employer premises are not available, safe or suitable creating a need for colleges to create, maintain and update buildings that can house specialist equipment of all types to that this can be used in education and training. In cases where employers lend or donate equipment, the college still has responsibility for its safety, insurance and use, thus creating a continuing capital investment need.

Government funding

Central government has provided capital grants to colleges for more than 30 years to 

The Department for Education summarized the case for capital investment in its 2021 Skills for Jobs white paper as follows:

Colleges need the right facilities to deliver high-value education and training and meet the skills needs of their local area.

HM Treasury accepted this case in the 2021 spending review and agreed a series of capital programmes which ran until 2026 including:

• the FE capital transformation fund which has supported 90 larger projects, 16 of which have been directly managed by the Department for Education
• two rounds of funding to provide additional 16-19 places
• a second round of the Institute of Technology programme
• grants to provide facilities and equipment to support the introduction of T levels
• one-off grants paid in 2022-3 to improve energy efficiency and to compensate colleges for the short-notice ban on commercial borrowing which was introduced when the Office for National Statistics reclassified FE corporations into the public sector.

More recently, the Department for Education secured a £2.3 billion skills capital budget for the period from 2026 to 2030. This is part of a larger £30 education capital budget which will be used to deliver DfE's education estate strategy

Education estate strategy

The Department for Education (DfE) published its ten-year education estate strategy in February 2026. This  explains how it will work with 2,800 responsible bodies (including the 210 college corporations) on ensuring that school and college buildings support the outcomes, health and wellbeing of more than 10 million pupils, students and adult learners. The strategy provides some information on a school rebuilding programme that will include 500 projects and on the continuation of high need projects run by councils (with a budget of around £700 million a year) but it also makes it clear what the DfE will not do. 

There are no plans for new DfE-funded FE college rebuilding projects before 2030 and there is no going back to the pre-2022 arrangements for college borrowing.

The DfE’s plans a three-pronged approach to the education estate: 

• support to responsible bodies so that they can manage their own estate
• annual funding to support condition improvement (with £300 million a year assigned to FE colleges)
• major renewal and retrofit projects.

In addition to annual condition funding and high need projects, colleges also have the chance to bid for £570 million in the Post-16 and construction skills capacity funding: 2026 to 2030 - GOV.UK either from DfE (£287 million due to be allocated on the basis of bids received by 17 April 2026) or strategic authorities (20 of them in all). 

There have also been two sets of announcements of technical excellence colleges. Ministers announced ten construction TECs in August 2025 and a second wave of seventeen TECs in April 2026, with up to £137 million in capital funding available to development.