Further Education Colleges: Recovery of VAT

Baroness Neville-Rolfe Excerpts

Tuesday 9th June 2026 Lords Chamber

[Lord Livermore (Lab)]

I agree with my noble friend’s overall point that we want greater levels of parity between FE colleges and other educational establishments. The Government are delivering those measures through our post-16 skills White Paper on developing the skilled workforce that our economy needs and on reaching the target of two-thirds of young people participating in higher-level learning. FE colleges are a vital part of that. One thing that I have not read out is that, in recognising rising student numbers, the Government are providing £87 million of exceptional in-year growth payments to colleges this year and are increasing funding by nearly £800 million next year.

[Baroness Neville-Rolfe (Con)]

My Lords, as noble Lords know, I am huge supporter of vocational education, so I welcome this Question. Does the Minister agree with the noble Lord, Lord Forbes, that it would cost the Exchequer £200 million to extend the scheme in the way proposed? More generally, do the Government consider that the criteria to reclaim VAT are fit for purpose?

[Lord Livermore (Lab)]

Both of those points are swept up in the point that I have already made: the Government are continuing to look into the VAT position of these colleges.