The 2025 Budget delivered several announcements with implications for learners, families and the education sector. Colin Booth, Chief Executive of Luminate Education Group, has shared his reflections on some of the key measures impacting education.
“Reiteration of the Youth Guarantee is positive, but we are still waiting for the detail on how it can be delivered at scale. If the aim is to expand opportunity for young people, the Budget needed to go further on the essentials, particularly increased capital investment so colleges can grow their capacity to meet rising demand for technical qualifications. The continued inability of further education colleges to reclaim VAT, where secondary schools are able to, represents a missed opportunity to end a structural inequity and unlock funds that could be reinvested directly into facilities and growth. Colleges will play a central role in delivering on the Government’s skills and growth ambitions, but we need the resources and capital to be able to do so.”
“Raising the minimum wage for apprentices is welcome, especially at a time when living costs remain a real barrier to young people starting and completing their programmes. The decision to fully fund apprenticeships for SMEs hiring under-25s is another positive step that should help widen access and support smaller employers to take on new talent. But pay rises and funding changes alone won’t grow the pipeline. Continued investment into apprenticeships and sufficient resources for colleges to deliver them remain essential if we want more people to access high-quality training and progress into skilled work. We look forward to working with employers and government to ensure these reforms translate into greater opportunity for learners and local communities.”
“The removal of the two-child limit is a significant and positive change for many families across the communities we serve. We see first-hand how child poverty affects young people’s learning, participation and positive progression throughout the education system, in addition to the impact on young parents and adult learners attempting to gain qualifications or retrain. This change will ease the financial pressure on many households, but wider action is still needed to tackle the root causes of hardship and ensure that every learner can access and succeed in education.”
Further education colleges play a vital role in delivering high-quality education and skills to young people. There are 693,000 16- to 18-year-olds studying in colleges – more than the number studying in schools (513,000). Students in FE are more likely to come from disadvantaged backgrounds, with 23% of college students having been eligible for free school meals at age 15, compared to just 13% of students attending school sixth forms. Accordingly, colleges are critically important to the Government’s mission of breaking down barriers to opportunity.
Colleges are, however, at a disadvantage. While both colleges and schools are classed as public sector organisations, the way they are treated by the Government is different. Schools are able to reclaim VAT costs from the Government, whereas colleges cannot recover VAT on most of the purchases related to their education activities. This fiscal anomaly reduces the resources available for frontline teaching and learning – especially given that the costs associated with technical and vocational training are significantly higher than those required for academic courses such as A levels. The Association of Colleges estimates that the total annual VAT cost to the college sector amounts to approximately £250 million.
A new research report produced by the London School of Economics in partnership with the Large College Group examines the fiscal and operational impact of the current VAT regime on FE colleges. The analysis suggests that aligning colleges’ VAT arrangements with schools would be fiscally neutral in the medium term for HM Treasury, while unlocking millions in reinvestment for the benefit of students, staff and communities.
One example of this for Luminate Education Group is linked to our recently completed £10.5 million refurbishment of our Park Lane Campus, which accommodates around 2,000 students. The Group incurred just over £2 million of irrecoverable VAT on these refurbishment works. If we had been able to recover this VAT, we would have replaced the whole of the roof and refurbish all of the student toilet facilities.
You can download and read the full report by clicking on the button below.
LSE Report: Executive Summary
FE colleges operate as exempt charities, typically incorporated as statutory corporations or charitable companies. While they do not have to pay VAT on some of their activities, many of colleges’ services fall outside the scope of VAT exemption, including commercial lettings (e.g. renting out rooms or sports facilities to third parties), retail sales (e.g. textbooks, stationery not essential to the course), consultancy services, catering services open to the public, hairdressing salons operated as part of training but serving paying customers, and much of the capital expenditure on large-scale building projects to provide industry-standard teaching facilities.
The Association of College estimates that the total annual cost of VAT to colleges in England is £250 million. This is funding which ends up in the coffers of HM Treasury rather than being used to support education and training provision.
In contrast, schools and academies benefit from the Section 33 VAT refund scheme under the VAT Act 1994, which allows them to reclaim VAT incurred on non-business activities funded by public money. In January 2025, the Government ended the VAT exemption for private schools on education and boarding provision in order to generate additional revenue for state education funding.
After the Post 16 Education and Skills Act 2022 became law in November 2022, the Office for National Statistics reclassified colleges as public sector bodies, giving them the same status as schools and academies. However there has been no change in the VAT rules since then. As a result of this anomaly colleges remain forced to repay millions of pounds each year which could otherwise be used for improving facilities for students or recruiting and retaining teaching staff with the industry experience needed to train the next generation of skilled employees the UK economy needs.
This creates a real financial impact, as VAT becomes a net expense that reduces FE colleges’ available budgets for investment, expansion and student services, compared to universities and schools.
As a result of the VAT rules, FE colleges are less competitive and have fewer resources available for improving facilities, hiring staff or supporting disadvantaged students. The VAT disadvantage has become more pronounced as public funding for FE colleges has tightened over the past decade (Institute for Fiscal Studies, 2023).
The absence of VAT recovery mechanisms for FE colleges in England contrasts with international practices where vocational and independent education are treated as legitimate public goods deserving of fiscal support. Extending VAT exemptions or refund rights to FE colleges would not be anomalous, but rather aligned with international norms aimed at supporting inclusive and efficient education systems.
The LSE researchers’ simulation of a VAT rebate on capital investment, using a sector-specific refund mechanism limited to FE and sixth-form colleges similar to the arrangements introduced for academies in 2011, suggests that such a reform could be fiscally neutral over a 10-year period, while delivering significant benefits in terms of educational outcomes and regional development.
Current VAT policy discourages capital investment and undermines financial resilience. Aligning the fiscal treatment of FE colleges with that of schools and universities is both a matter of equity and of sound economic policy. Removing these distortions would not only improve the efficiency of public investment in education, but also signal a clear commitment to supporting skills development across all regions and social groups. In doing so, it would help unlock the full potential of the UK’s FE sector as a driver of inclusive growth.
We have been awarded the first Bronze as part of a pilot project to develop a pathway for the Race Equality Charter (REC) to small and specialist institutions and research institutes.
The award comes as the pilot programme concludes its initial two-year phase and the Race Equality Charter celebrates its 10th anniversary in 2025. The achievement represents a significant milestone in efforts to support these groups of higher education providers and research institutes with their ambitions to advance equality in their contexts.
Anne Mwangi, Head of the Race Equality Charter at Advance HE, said: “We are thrilled to be ending this pilot phase with our group’s first Bronze award.
“REC Bronze is recognition of an institution’s robust foundation for eliminating racial inequalities, developing inclusive cultures and moving from commitment to sustainable and integrated bold and ambitious action.
“Advance HE looks forward to supporting Luminate Education Group as it progresses its action plans to advance race equality and celebrating all members of this cohort submitting in November 2025 and March 2026 as they receive their outcomes.”
An empowering chance to reflect – and act
Dr Jo Tyssen, our Group Director of HE Quality and Standards – Leeds Conservatoire and University Centre Leeds, added: “This Race Equality Charter application has been an ambition for a number of years and follows University Centre Leeds’ engagement with Advance HE as part of the REC SSRI Design Group in 2023. This then expanded to include Leeds Conservatoire with University Centre Leeds in the Race Equality Charter for small and specialist institutions and research institutes pilot.
“It has been a collaborative and empowering journey with Advance HE. We viewed it as a real opportunity for an honest self-assessment and a bold commitment to action, addressing the root causes of race inequality to drive meaningful change.
“We are incredibly honoured by this achievement, and to be the first from the pilot (including college-based HE provider) to achieve REC Bronze is something we are so proud of.
“I cannot thank Advance HE enough for their support in working with members to provide this opportunity and for the recognition of the work that providers such as us contribute to race equity and the HE sector as a whole.”
The Race Equality Charter’s mission is to improve the representation, experience, progression and success of racially minoritised staff and students within higher education. It provides a rigorous framework through which institutions work to critically reflect and act on institutional and cultural barriers.
The government has published a set of wide-ranging new proposals for further and higher education.
The White Paper includes plans to introduce new technical qualifications, V Levels, and implement a more targeted, data-driven approach to plugging skills gaps in key areas.
There are also proposals to provide greater intervention and support for young people not in education or employment (NEET), and to raise annual university fees automatically, linked to inflation.
Our senior leaders have been carefully analysing each of the report’s main points to weigh up their merits and see what the implications are likely to be for our members.
Matching skills to industry
On labour market alignment, Bill Jones, our CEO Designate and Executive Principal Leeds City College, said:“A skills system that more closely connects education and employment into priority sectors is long overdue.
“Skills England’s national coordination, combined with devolved local planning, could maximise the role of skills as a genuine engine of economic growth, but only if colleges are effectively resourced to deliver and respond quickly to changing demand.”
Recruitment plans
Turning to FE teacher recruitment, he added:“Recruiting and retaining specialist FE teachers remains one of the greatest challenges facing further education.
“The proposals for professional development and industry exchange are welcome, but they must be matched by a funding settlement that allows colleges to offer competitive pay. Without tackling that gap, we risk losing the expertise that an ambitious and effective skills system depends on.”
Action on NEETs
On reducing NEET rates, group CEO Colin Booth said:“We welcome the commitment to make sure no young person is left without a place in education or training.
“But that ambition won’t be achieved unless post-16 capacity keeps pace with demand. Across Leeds and in many other cities, colleges are already at maximum capacity, and the number of 16-to-18-year-olds is still rising.
“The Youth Guarantee, the automatic allocation of college places and improved data sharing on learners at risk of becoming NEET are all positive steps forward, as is the strengthened role of secondary schools in supportive effective transitions into post-16 education. Without sustained investment into teaching space, staffing and support services, however, we risk seeing more young people left without a suitable place to learn.”
Qualification reforms and V Levels
On V Levels and qualification reform our Deputy CEO, Gemma Simmons-Blench, said: “Clarity and consistency in qualifications will help students, employers and providers alike.
“The move toward a smaller suite of high-quality Level 3 routes, including V Levels, is sensible, provided it protects progression opportunities and recognises the diverse needs of learners. Level 3 qualifications in scope for defunding should only be removed when a similarly accessible alternative is in place. Reform should simplify and enhance choice, not narrow it.”
Funding formula ‘must recognise realities’
On the review of the 16-19 funding formula, Gemma added: “A review of the 16-19 funding formula is long overdue.
“Colleges are educating record numbers of young people on funding levels that simply haven’t kept pace with inflation, pay pressures, or the growing complexity of learner needs. The current formula doesn’t reflect the higher delivery costs of technical programmes, industry placements or support for SEND learners.
“If the Government wants the post-16 education and skills system reform agenda to succeed, the updated formula must recognise the real cost of delivering high-quality education and provide the stability for greater flexibility and planning.”
More details needed on English and maths shake-up
She also had these reflections on the proposed English and maths reforms: “It’s right that the Government wants every learner to leave education with solid English and maths skills that provide the foundation for employability.
“It’s extremely positive that the Government have recognised the issues that face further education providers, but the detail behind the proposed new Level 1 qualification will be crucial. We need to understand how it will differ from existing functional skills, which learners it will be available to, what progression routes it will support, and how it will be funded and assessed.
“We also need to know whether this new qualification will be ring-fenced for post-16 students or accessible at an earlier age, as is the case with functional skills.
“Alongside these reforms, it would also be extremely beneficial for dedicated post-16 GCSE English and maths papers to be introduced, built specifically for resit students. Colleges deliver the bulk of this provision, so getting the structure and resourcing right will determine whether the reform genuinely raises attainment or simply rebrands what already exists.”
We’re pleased to share a programme of professional development opportunities designed for educators, leaders, and practitioners across the FE community. These sessions focus on practical strategies, innovative ideas, and collaborative approaches that support high-quality practice – particularly for teams working with SEND and neurodiverse learners.
All sessions are delivered online via Zoom, and a joining link will be sent to participants once they have registered.
Whether you’re looking to deepen your knowledge, enhance your curriculum design, or develop more inclusive and impactful career pathways, we hope you’ll join us for one or more of these events.
Continuing Professional Development (CPD) sessions: Strengthening Practice Across the FE Community
Our CPD (Continuing Professional Development) sessions are designed to provide colleagues across the FE sector with focused, evidence-based training that enhances inclusive practice, curriculum design, and learner support.
This session offers an in-depth look at developing ambitious, individualised vocational pathways that truly reflect learner aspirations. Drawing on evidence-based practice from across Luminate Education Group, we’ll explore how Vocational Passports can move provision beyond “one-size-fits-all” models, particularly within Supported Internship programmes. Participants will leave with actionable tools, templates, and approaches they can apply in their own settings.
CPD Session 3
Building a College-Wide Culture of Recording Career Development for SEND & EHCP Learners
8 December 2026 – 3.30-4.30pm via Zoom
How do we ensure every learner’s progress, skills, and experiences are captured meaningfully? This session will focus on developing consistent, robust approaches to documenting career education and guidance, work experience, and employer encounters across a whole college. We’ll showcase practical tools and systems that bring this information together in one place, improving both staff practice and learner outcomes.
CPD Session 4
Leading the Local Approach to Job Coach Development: Luminate’s Regional Job Coach Network
January 2025 (Date TBC) – 3.30-4.30pm via Zoom
This session will explore how colleges can lead a regional approach to job coach development – drawing on Luminate’s successful establishment of a collaborative, multi-provider Job Coach Network. We’ll share insights into securing local authority funding, elevating the job coach role, and creating a professional forum that amplifies good practice and collective voice across the sector.
Communities of Practice (CoP) Series: Effective Careers Guidance & Information for SEND Learners
Alongside our CPD sessions, we will also host a three-part Communities of Practice series focused on strengthening CEIAG for SEND learners. These sessions are designed to help teams reflect, collaborate, and enhance their approaches across all aspects of careers guidance.
CoP Session 1
Driving an Integrated Career Guidance (CEIAG) Model
25 November 2025 – 3.30-4.30pm via Zoom
A strategic, high-level session exploring how to build a cohesive, college-wide CEIAG model. We’ll look at Gatsby Benchmarks, destination tracking, quality standards, and how to deliver strong provision even when budgets are tight. We’ll also reflect on Luminate’s own model and lessons learned.
CoP Session 2
Having Effective Career Information and Guidance (CIAG) Conversations
9 December 2025 – 3.30-4.30pm via Zoom
This practical session will focus on equipping all staff with the tools and conversational models needed to support learners in one-to-one career discussions. We’ll explore ways to maximise adviser expertise through blended approaches such as campus-based meetings and online platforms.
CoP Session 3
Supporting SEND Students to Achieve Positive Destinations
20 January 2026 – 3.30-4.30pm via Zoom
In this session, we’ll look at how Labour Market Information (LMI), partnership signposting, and employer engagement can guide learners towards meaningful next steps. We’ll highlight Luminate approaches to enhancing encounters and improving the planning of future pathways.
How to Register
Places for all sessions can be booked through the Education and Training Foundation (ETF) website. You will be asked to create a free ETF account if you don’t already have one.
The Centres for Excellence in SEND initiative is part of the Universal SEND Services programme, which provides sector-led support to leaders, managers and practitioners to create a step change in inclusive teaching and learning. To access resources and find out more about upcoming activities and support, visit the CfESEND area of the ETF website.
We are delighted to announce that Luminate Education Group has been appointed as a Centre for Excellence in Special Educational Needs and Disabilities (SEND) by the Education and Training Foundation (ETF)
This recognition reflects our long-standing commitment to inclusive education. Hosting one of the largest post-16 cohorts of SEND students in the country, Luminate places inclusive practice at the very heart of teaching and learning across Yorkshire.
A Leading Force in Inclusive Education
Operating across West and North Yorkshire, Luminate Education Group is one of the UK’s largest providers of post-16 education. Each year, we support around 30,000 learners through our family of institutions, which includes Leeds City College, Keighley College, Harrogate College, Leeds Sixth Form College, Pudsey Sixth Form College, University Centre Leeds and Leeds Conservatoire.
As a group, we are dedicated to delivering high-quality skills training that addresses local workforce needs, drives social mobility, and strengthens the regional economy.
What It Means to Be a Centre for Excellence
The ETF’s Centres for Excellence in SEND programme provides free, expert support to leaders, managers, and practitioners across the FE and training sector.
As a newly appointed Centre for Excellence, Luminate will deliver CPD seminars, facilitate Communities of Practice, convene peer reviews, and host employer-led events. Together, these activities will enable us to share best practice, tools, and insights that help improve outcomes for learners with SEND across the country.
Championing Inclusion
Chris Thornton, Director of Inclusive Provision and SEND at Luminate Education Group, said:
“We are honoured to have been recognised as a Centre for Excellence in SEND. This enables us to extend our inclusive practice beyond our campuses, sharing tools, insights and leadership with the wider sector to improve outcomes for learners with SEND across the country.
Inclusion is at the heart of everything we do. We are deeply rooted in the communities we serve and are firmly committed to removing barriers, embracing diversity, and ensuring every learner, regardless of background or need, has the opportunity to thrive.”
Upcoming Events
As part of our ongoing work through the Centre for Excellence in SEND, we are hosting a series of CPD sessions and Community of Practice events designed to share inclusive approaches and practical tools for supporting SEND learners.
CPD Sessions
Session 1 – Exploring AI for Enhancing Job Skills for Neurodiverse Learners Tuesday 21 October 2025, 3.00 – 4.00pm (Online via Zoom)
Session 3 – Building a College-Wide Culture of Recording Career Development for SEND & EHCP Learners Monday 8 December 2025, 3.30 – 4.30pm
Community of Practice: Effective Careers Guidance & Information for SEND Learners
Session 1 – Driving an Integrated Career Guidance (CEIAG) Model Tuesday 25 November 2025, 3.30 – 4.30pm
Session 2 – Having Effective Career Information and Guidance (CIAG) Conversations Tuesday 9 December 2025, 3.30 – 4.30pm
Session 3 – Supporting SEND Students to Achieve Positive Destinations Tuesday 20 January 2026, 3.30 – 4.30pm
Get Involved
Places for all sessions can be booked through the Education and Training Foundation (ETF) website – click here to register. You will be asked to create a free ETF account if you don’t already have one.
The Centres for Excellence in SEND initiative is part of the Universal SEND Services programme, which provides sector-led support to leaders, managers and practitioners to create a step change in inclusive teaching and learning.
To access resources and find out more about upcoming activities and other support, visit the CfESEND area of the ETF website.
