FE leaders and unions issue stark funding warning to DfE

College leaders and staff unions have joined forces to warn the government of the severe consequences of continued FE funding cuts.

In an unprecedented show of unity, David Hughes, Chief Executive, Association of Colleges, Gerry McDonald, Chair of the AoC Employment Policy Group, Association of Colleges and CEO of New City College, Jo Grady, General Secretary, UCU and Andrea Egan, General Secretary, Unison, have written a joint letter to Education Secretary Bridget Phillipson urging her to take action and commit to more FE funding.

The letter comes as the pay negotiations for further education staff begin. Despite what both the employer and union sides described as a “constructive and open” meeting, the message was unequivocal: current funding levels mean a meaningful pay rise for staff is out of the question.

The leaders highlight a disconnect between government messages about the vital role of colleges and the reality on the ground for staff. Demand for vocational and technical skills is surging, and the government are looking to FE to play in a key role in its priorities on youth unemployment, house building, net-zero, and economic growth.

However, the widening pay gap of £12,500 between colleges and schools, combined with more competitive salaries in industry, and below inflation funding increases are making it impossible to recruit and retain staff at the scale required to meet this demand.

Without intervention, employers warned that the 2026/27 pay award could be “very low, possibly zero”, with some colleges forced to make further efficiencies just to stay afloat. But unions made clear that staff, after years of restraint, “will not tolerate” another below-inflation or zero pay award.

The letter said: “No one is naive about the current fiscal national outlook and global situation. We understand that the government will have competing calls on public funds. However, if it is serious in its commitment to further education and wants to meet its own targets, now is the time to act.”

It highlighted the impact on the ongoing NEET crisis and said: “With more than one million young people not in education, employment, or training, it is inexcusable that colleges are being forced to turn away students who want to learn due to a lack of funding.”

David Hughes, Chief Executive, Association of Colleges, said: “A united front between the employer representatives and the trade unions in college pay negotiations is unprecedented. It speaks to the severity of the situation facing college staff and the extremely challenging financial environment colleges continue to find themselves in. College leaders want to pay staff the wages they deserve, but they simply don’t have the money in their accounts to do so.  

“Continued underfunding and disrespect of further education over decades caused the pay gap with schools and industry and recent funding improvements have not been enough to change that. Until the government backs up its warm words about colleges with investment, the pay gap will only widen. It’s quite simple, really: without extra funding, the government will fail to deliver on its own priorities.”  

Gerry McDonald CBE, Chair, Association of Colleges Employment Policy Committee and CEO, New City College, said: “This committee, which represents the further education sector, absolutely does not want to recommend a zero or very low pay award but with the current funding envelope that could be our only option. I call upon ministers to urgently review sector funding so that colleges can afford a pay award that enables colleges to deliver on the government’s missions.”

Jo Grady, General Secretary, University and College Union, said: "The £12.5k pay gap between college teachers and their counterparts in schools makes it impossible for colleges to recruit and retain the staff needed to meet the demand for vocational and technical skills and training.  

"College staff have experienced years of pay restraint, which has resulted in worsening recruitment and retention problems. Yet once again they are being told that they may have to go without a meaningful pay award. 

"This government continues to highlight the importance of further education but the time has come to put its money where its mouth is and provide proper funding for colleges and fair pay for staff."

Andrea Egan, General Secretary, UNISON, said: “Further education is crucial for delivering the skills needed to help meet ministers’ growth ambitions, yet colleges are hamstrung by a lack of funding.

“Pay has been held down for years, leaving too many staff struggling to simply cover the essentials. Colleges and their employees want to help the hundreds of thousands of young people not earning or learning, but to do that they must be given the necessary funding and resources.”