Further education capital funding
An overview of capital funding for post-16 education providers, the type of funding available, what it can be used for and when to apply.
Applies to England
Overview
We allocate funding to allow providers to:
- upgrade college estates that are in an unsatisfactory condition
- get specialist equipment
- improve training facilities
- create extra capacity to accommodate increases in 16- to 18-year-old learners
Additional FE capital funding for the 2022 to 2023 financial year
Eligible further education (FE) colleges and designated institutions received an allocation from an additional £53 million of capital funding to improve energy efficiency in 2022 to 2023. This was part of an additional £500 million of capital funding for schools and FE institutions in England.
Sixth-form colleges and other institutions that were eligible for devolved formula capital in 2022 to 2023 were included in the additional school capital funding allocations.
What funding is available
See:
Payments went to college groups or designated institutions, where applicable.
The Education and Skills Funding Agency (ESFA) issued grant agreement letters. Payments were made in January 2023 as a one-off allocation.
What you can spend it on
You must spend this funding on capital projects, prioritising projects that improve your college estate’s energy efficiency. Where you judge this is not appropriate based on local circumstances, you have the discretion to spend it on other capital projects.
We expect you to have spent this funding in the 2022 to 2023 financial year. However, you can spend it over the following 2 financial years, if necessary.
How funding is calculated
We based allocations on colleges’ and designated institutions’ ESFA revenue funding in 2021 to 2022. This included the following revenue funding streams:
- 16 to 19 revenue funding (core programme funding)
- adult education budget (allocated):
- adult skills
- community learning
- National Skills Fund - level 3 offer
- 19 to 24 traineeships
- apprenticeships carry in
- 16 to 18 traineeships, including bursary funding
- advanced learning loans bursary
- adult education budget devolved data
We made adjustments so that FE colleges in devolved adult education budget areas received their full allocation.
FE reclassification capital allocation
Eligible FE colleges, designated institutions and sixth-form colleges received a share of an additional £150 million in capital funding. This followed the reclassification of the FE sector.
What funding is available
See:
Where applicable, payments went to:
- college groups
- designated institutions
- sixth-form colleges
ESFA sent grant agreement letters in March 2023. Payments were made in April 2023 as a one-off allocation.
What you can spend it on
This funding should be spent on capital projects, prioritising condition improvement of the college’s estate.
The funding must be spent between 1 April 2023 and 31 March 2025.
How funding is calculated
The funding is allocated in proportion with the revenue funding your institution received in 2021 to 2022 relative to other colleges that were eligible for this allocation. This included the following revenue funding streams:
- 16 to 19 revenue funding (core programme funding)
- adult education budget (allocated):
- adult skills
- community learning
- National Skills Fund - level 3 offer
- 19 to 24 traineeships
- apprenticeships carry in
- sixth-form colleges
- 16 to 18 traineeships, including bursary funding
- advanced learning loans bursary
- adult education budget devolved data
We made adjustments so that FE colleges in devolved adult education budget areas received their full allocation.
Condition Improvement Fund
The Condition Improvement Fund (CIF) is an annual bidding round for eligible academies, sixth-form colleges and voluntary-aided (VA) schools to apply for capital funding.
The priority for the fund is to address significant condition needs, keeping education provider buildings safe and in good working order. This includes funding projects to address:
- health and safety issues
- building compliance
- poor building conditions
The CIF also supports a small proportion of expansion projects. These are for academies, sixth-form colleges and VA schools rated good or outstanding by Ofsted that can demonstrate a need to expand.
Eligibility is confirmed each year when the new application round opens.
What funding is available
Budgets are confirmed on an annual basis.
The funding round for CIF 2023 to 2024 provided funding of £456 million for 1,033 projects at 859 academies, sixth-form colleges and VA schools.
When to apply
The application window for CIF 2024 to 2025 closed on 14 December 2023.
Sign up for Condition Improvement Fund alerts.
Previous allocations
A list of projects funded in CIF 2023 to 2024 is available.
FE capital transformation programme
The FE capital transformation programme seeks to upgrade the FE college estate.
What funding is available
The FE capital transformation fund is investing £1.5 billion over 6 years, ending in March 2026, to upgrade FE college estates. To date, we have:
- given all FE colleges a share of a formulaic allocation of £200 million in autumn 2020 to support them to carry out condition improvement projects
- targeted some of the worst-condition sites in the country, working in partnership with 16 colleges to deliver their capital projects
- directed funding of approximately £410 million to 60 colleges with 75 projects that were successful in the bidding process
- supported a further 2 condition-improvement projects in colleges that are involved with ESFA specialist restructuring
- announced that the final stage of the programme will be through a formulaic allocation to eligible FE colleges and designated institutions
We have published the allocations for the final stage of the FE capital transformation fund.
A list of successful applications at stage 2 of bidding for the FE capital transformation fund is available.
Post-16 capacity fund
The post-16 capacity fund supports post-16 education providers to accommodate demographic increases in learners aged 16 to 19.
What funding is available
The most recent funding round made £140 million available for bidding providers to deliver projects creating additional capacity from September 2024.
When to apply
The application window for the latest funding round closed on 11 November 2022.
Previous allocations
A list of projects that made successful bids for post-16 capacity funding is available.
T Levels capital fund
The T Levels capital fund is available to support providers with a 16 to 19 funding contract delivering T Levels courses with industry placements from September 2024.
What funding is available
The most recent funding, wave 5, made over £100 million available to support more than 100 T Level projects. This investment will ensure that T Level students can:
- learn in modern, fit-for-purpose buildings suitable for delivering T Level qualifications
- access industry-standard specialist equipment, which will help promote progression into skilled employment
Providers delivering a T Level route for the first time in September 2024 are eligible to receive a specialist equipment allocation in wave 5. We expect to make payments in early 2024.
When to apply
The T Levels capital fund is currently closed for applications.
Sign up for T Levels capital fund alerts to find out when the next stage of the fund is opening.
Previous allocations
A list of the successful applications for T Levels capital fund wave 5 is available.
Higher technical education skills injection fund
The skills injection fund was previously known as the higher technical education growth fund.
The fund will help providers offer more higher technical qualifications (HTQs).
The higher technical education (HTE) skills injection fund 2 builds on the success of:
- the HTE growth fund, which launched in 2021 and has invested £14.5 million to support HTQs in occupational routes from cycles 1 and 2
- the HTE skills injection fund, which launched in 2022 and has seen over £21 million allocated to support all level 4 and 5 HTE qualifications in cycles 1, 2 and 3
What funding is available
The fund is for providers preparing to deliver across all 15 occupational routes up to the 2025 to 2026 academic year.
The HTE skills injection fund 2 has a total budget of £48.8 million for the 2023 to 2024 and 2024 to 2025 financial years.
When to apply
The application window for round 2 of the HTE skills injection fund is now closed.
Previous allocations
A list of successful applicants is available for:
- higher technical education skills injection fund (round 1)
- higher technical education skills injection fund (round 2)
Strategic development fund
The strategic development fund (SDF) provided investment to different English regions for the 2022 to 2023 financial year (round 2 of the programme).
The SDF provided investment to enable areas across England to:
- reshape their teaching and training provision
- update their facilities in preparation for the rollout of local skills improvement plans (LSIPs)
What funding is available
This funding is no longer available.
Previous allocations
A list of the successful applicants appointed to pilot the SDF and LSIPs is available for:
Local skills improvement fund
The local skills improvement fund (LSIF) is designed to enable FE providers across a geographic area to respond collectively to the priorities in the LSIPs.
What funding is available
The LSIF is available across 2 financial years:
- £80 million in 2023 to 2024 (£40 million revenue and £40 million capital)
- £85 million capital in 2024 to 2025
The LSIF builds on the SDF, which was piloted in 2021 to 2022 and rolled out across England in 2022 to 2023.
When to apply
The LSIF fund is currently closed for applications.
Institutes of Technology
Capital investment is to fund new-builds, refurbishments and specialist equipment.
Institutes of Technology are collaborations between FE colleges, universities and employers to offer HTE and training at higher skills levels in key science, technology, engineering and mathematics (STEM) sectors where employer demand is greatest.
What funding is available
The government is investing up to £290 million to provide the capital investment required to establish a comprehensive network of Institutes of Technology across England.
When to apply
The application window for Institutes of Technology funding is now closed.
Previous allocations
A list of the Institutes of Technology in operation and those currently in development is available.
College capital loans
College capital loans will provide funding to eligible capital projects in the 2023 to 2024 and 2024 to 2025 financial years. These loans will cover funding gaps resulting from commercial borrowing restrictions following the reclassification of the FE sector.
Capital loans are repayable and lending is subject to terms and conditions.
What funding is available
There is no limit to the amount of capital loan you can apply for. You must provide evidence of the level of commercial borrowing you intended to take before 29 November 2022. We will consider projects and loan amounts on a case-by-case basis.
If your application meets the eligibility and assessment criteria, we’ll develop proposed repayment terms for your college.
You must take the loan between 1 June 2023 and 31 March 2025.
When to apply
The application window for college capital loans closed on 31 May 2023.
Funding assistance for building condition issues
FE colleges that require requiring funding assistance to address urgent building condition issues should contact their place-based team in the first instance. This includes issues that either:
- put the safety of your pupils or staff at risk
- threaten the closure of the whole or a significant part of your establishment
Updates to this page
Last updated 29 January 2024 + show all updates
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Added sections for 'Local skills improvement fund', 'College capital loans' and 'Funding assistance for building condition issues'. Updated 'Additional FE capital funding for the 2022 to 2023 financial year' and 'FE reclassification capital allocation', as payments have been made. Updated 'T Levels capital fund' and 'Higher technical education skills injection fund', as applications for wave 5 and round 2 respectively have closed and the outcomes have been published.
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Updated the section on the post-16 capacity fund. The latest funding round closed in November 2022. A list of projects that made successful bids is available.
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Added a link to the allocations for the final stage of the FE capital transformation fund.
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Added information about allocations for the final stage of the FE capital transformation fund programme.
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'FE reclassification capital allocation' section has been added.
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'Additional FE funding for the 2022 to 2023 financial year' section has been added.
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The 'FE capital transformation programme' section has been updated to highlight that the next stage of the programme will be announced in winter 2022 to 2023. The 'Condition Improvement Fund' section has been updated to show that the 2023 to 2024 application round will close on 7 December 2022 and the funding outcomes will be announced in May 2023.
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Information on the next funding round for the post-16 capacity fund has been added.
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First published.