L

Lord Forbes of Newcastle (Lab)

Speaking in the House of Lords on 9 June 2026

Debate

Further Education Colleges: Recovery of VAT

Contribution

I thank my noble friend the Minister for that response. As he correctly identifies, since 2011, FE colleges, unlike councils, academies and almost all other public sector organisations, have been unable to reclaim VAT costs from the Government’s refund scheme. LSE research estimates this to be a loss to the sector of £200 million a year. This puts college students at a funding disadvantage compared to their peers in state-funded schools and reduces resources for courses in government priority areas such as construction, engineering, digital and health. Given that colleges deliver disproportionately to young people from more disadvantaged backgrounds, and in the context of the current national crisis of young people not in education, employment or training, will the Government commit to reviewing this funding inequity for the FE sector as part of their cross-departmental response to the Milburn review?

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