Publication Source

Colleges are grappling with cashflow challenges due to new, “restrictive” borrowing rules that leave them with considerable upfront capital costs.

FE leaders this week warned that colleges are having to wait around two months for the Department for Education to refund what they spent on funded building and facility improvements.

Colleges were reclassified as public sector organisations last November, which means they are no longer able to get bank loans to pay for capital projects without permission from the DfE.

The department launched a time-limited “college capital loan” system to use between 2023 and 2025 in response to college complaints that this overnight decision put their projects on hold.

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