Post-16 Education and Skills White Paper

In the news

The big-ticket announcements from the paper include:

Inflation-linked tuition fee increases

Undergraduate tuition fee caps in England will rise annually in line with forecast inflation for the next two academic years, with plans to legislate for automatic increases in the future (subject to periodic review).
Future fee uplifts will be conditional on providers achieving a higher quality threshold through the Office for Students’ (OfS) quality regime.

Lifelong Learning Entitlement (LLE)

Launching in 2026/27 for certain key subjects, the LLE will offer new learners four years’ worth of tuition fee loans for education and training throughout their working lives.
Loans can be used for modular or full-time study across multiple courses, providing greater flexibility for learners.
Providers must be OfS-registered to access LLE funding, with a streamlined approval process for providers possessing the necessary TEF ratings (Silver or Gold) or Ofsted ratings (Good or Outstanding).

International student levy

A proposed levy on international student tuition fees is expected in the Autumn Budget (proposed as a 6% levy on international fees), with that revenue funding maintenance grants for UK students from low-income households.

Introduction of V-Levels

New vocational technical qualifications (V-Levels) will replace Level 3 BTECs and other post-16 technical qualifications, covering key employment sectors.

Vision

It is worth examining the Government's vision for a more sustainable, specialised and efficient sector in more detail. It would like to see:

providers focussing on their strengths
more consolidation and formal collaboration across the sector
more collaborative regional systems between further and higher education providers to contribute to the skills and economic needs of their areas, ranging from providers in the same city sharing back-office functions and estates to the emergence of groupings to support more structured regional offers across research, skills and teaching
fewer broad generalist providers (chasing the same students with similar offerings) and more specialists
providers routinely working in partnership and sharing infrastructure, assets and talent
healthy competition remaining a part of the system.

The Government has put forth its vision for the sector but also recognises its autonomy and independence and so the Government plans to encourage, not impose, these changes.

There is also one stark omission from the paper - in the context of serious financial challenges for the sector where 44% of institutions forecast a deficit in the 2024/25 academic year - there was no mention of a special administration regime for institutions nor a body that could broker collaboration between institutions.

Consolidation and collaboration

Regarding more consolidation and formal collaboration, the Government has said:

It will provide clarity on how collaboration between providers can happen within the existing legal framework and set out the types of collaboration the Government sees as beneficial. The Government will work with the CMA in this regard, seeking to address nervousness in the sector regarding competition law compliance in pursuit of collaboration.
The Government will also agree high-level objectives with the OfS to strengthen the emphasis on supporting beneficial collaboration.
It is supportive of providers implementing 'necessary change' to future proof their business models and operate more efficiently and innovatively - citing providers who have made strategic decisions to manage their financial sustainability by changing their business models, including by cutting courses or restructuring.
It will encourage high-quality and novel alternative business models, including federated models and partnerships with further education providers.
To encourage collaboration in research, the Government will incentivise a "more strategic distribution of research activity", supporting providers to reducing the overall costs of research by supporting effective collaborations across institutions to share resources and infrastructure, minimising duplication of effort, including better maintenance and staffing of shared research and development equipment and facilities.

Stronger governance

The Government highlights that the price of an autonomous sector is that leadership are responsible for managing their institutions robustly and in the public interest.

We can speculate that the Government, eager to avoid the financial collapse of institutions and resulting hard choices of whether and how to provide financial support, wishes to ensure that the sector learns from the damning Gillies report on the University of Dundee regarding governance and oversight.

In that regard:

The paper identifies weaknesses in institutions' strategic and financial planning and potential issues with the relationship and information flows between executive leadership and governing bodies. The Government will work with the OfS to strengthen its management and governance conditions of registration to "deliver change and put in place sustainable business models" and help address those weaknesses.
The Government supports The Committee of University Chairs (CUC) with its review of the HE Code of Governance to enhance governance practices across the sector.

Empowering the OfS

The paper promises a tougher OfS with a larger role.

More providers must register with the OfS, including large franchise providers and any providers wishing to access LLE funding, and the OfS will be the primary regulator for all HE providers, including FE colleges delivering higher education.
The OfS will have stronger powers (and more capacity) to intervene in cases of low-quality provision, including the ability to impose student recruitment limits. This is part of a broader effort to safeguard public money and ensure quality in higher education.
The crackdown on poor quality and fraudulent franchise provision by the OfS will continue, including by compulsory registration for large franchise providers wishing to receive public funding.
The Government promises stronger powers for the OfS where there is an immediate risk to public money, including stronger entry and search powers, suspensions of funding and financial sanctions.
The Government will support the OfS to:
- develop a reformed regulatory framework that focuses on driving out poor-performance and safeguards financial health of the system
- continue to strengthen its financial monitoring and data collection processes.

Other points of note

The Government has also said it will:

Continue to invest in computing infrastructure, like the recently opened Isambard-AI supercomputer at the University of Bristol.
Support university commercialisation by:
- using the Local Innovation Partnerships Fund to invest up to £500 million to grow innovation clusters across the UK, with UK Research and Innovation fostering regional partnerships between universities and other research organisations, businesses, and local authorities
- reviewing higher education innovation funding to better align with the Government's economic growth mission
- continue to improve support for university spinouts.
Seek to better understand concerns within the post-1992 sector about pension provision, noting that defined benefit schemes are an important and valued part of staff remuneration. We assume this is a reference to the recent and significant increases in employer contributions for participants in the Teachers' Pension Scheme (TPS) and the Local Government Pension Scheme (LGPS).

Academic freedom and free speech

The Government has also said it will expand duties to promote academic freedom and free speech by proposing amendments to the Higher Education (Freedom of Speech) Act to remove unnecessary burdens on higher education providers, and to introduce new routes of redress through a complaints scheme at the Office for Students for staff and external speakers, where their lawful free speech has not been secured. The Government will also grant stronger regulatory powers for the OfS to take robust action against higher education providers who do not meet their duties under the Act.

We understand that these intended changes are as set out in The Future of the Higher Education (Freedom of Speech) Act 2023, published in June 2025. This indicated that:

Duties on students' unions and the new statutory tort were overly burdensome and could lead to resources being diverted away from students and fewer speakers being invited to talk to students and will be repealed.
The new OfS complaints scheme should be amended to provide the OfS with a power rather than a duty to consider complaints and to remove confusing duplication with the role of the OIA. The OfS would be able to consider complaints from staff, external speakers and non-student members while the OIA would continue to consider student complaints. Complaints against student unions will not be considered.
The OfS should have the power to identify and disseminate best practice in responding to, and resolving, free speech issues as well as a statutory duty to promote freedom of speech and academic freedom so that providers can learn from one another.
The OfS should have a power rather than a duty to impose either an initial or ongoing condition of registration in relation to freedom of speech and academic freedom, such that there can be flexibility in how conditions are applied to different categories of HE provider.
The proposed reporting requirements on overseas funding are under review with new guidance expected by the end of the current financial year.
The role of the Director for Freedom of Speech and Academic Freedom will be maintained.

For further advice or to discuss how these changes may impact your institution with our expert HE sector team, please contact Tom Pollitt, Kris Robbetts or Jane Byford in our Higher Education team.