Further education college condition allocation 2026 to 2027: what you need to knowUnderstanding education estates in mid-2026
There is no shortage of change in the education estates sector right now. New government strategy documents, the disbanding of the ESFA into the DfE, the closure of major funding programmes, and the ongoing pressure of ageing buildings across more than 70,000 blocks in England mean the landscape looks very different today than it did even two years ago.
The central challenge, according to Jenny Fram, is straightforward: “There is not enough money to rebuild everything. There is not enough money to decarbonise everything. So, what do we do?”
The answer, consistently, is to prepare.
What has changed?
Several significant shifts have taken place in a short period of time. The ESFA has been absorbed into the DfE. The Condition Improvement Fund (CIF) is expected to wind down within the next two years, with no announcement yet on what, if anything, will replace it. The future of School Condition Allocation is similarly unclear.
At the same time, the government has doubled down on academisation, and the Education Estates Strategy: a decade of national renewal, sets out an ambitious long-term framework for the estate. The DfE’s Long-Term Estates Plan, published in February 2026, identifies seven key steps for schools, colleges, and trusts to follow in managing their estates effectively.
“The government has said there will be announcements this spring about some of this”, says Jenny. “In the meantime, running internal scrutiny exercises, whether formal or informal, will put you in a position of strength when any announcements come.”
Why internal scrutiny matters
Internal scrutiny is not just a compliance exercise. From an estates perspective, it serves a practical purpose that confirms the condition of your buildings, keeping surveys and reports up to date, and giving estates managers the evidence they need to make the case for investment.
It also reduces the risk of unforeseen urgent works landing without warning, which carries both financial and reputational consequences. Proactively managing estate risk demonstrates to staff, students, governors, and external stakeholders that your organisation is on top of its obligations.
The starting point for any credible estates programme is knowing what you have. That means up-to-date condition surveys, a current asset management plan, and an estate strategy that sets out your vision for the next five to ten years.
Energy efficiency or net zero: Do they go together?
One of the most important shifts in the current landscape concerns decarbonisation. The closure of the Public Sector Decarbonisation Scheme (PSDS) in June 2025 removed a significant source of funding for low-carbon heating and energy efficiency upgrades in schools and colleges. No equivalent replacement has been announced at national scale.
Nazar Soofi explains the shift in government thinking: “The government is moving towards reducing energy costs rather than reducing carbon costs. We all have to look at how we can reduce the cost of our estate while, at the same time, addressing the carbon footprint.”
In practical terms, this means the most fundable and investable projects are those that can demonstrate a return by reducing operational costs in a way that pays back over time. Solar PV, LED lighting upgrades, and building management system (BMS) optimisation are consistently the strongest performers on this measure. Savings generated from these measures can then be reinvested into more capital-intensive work, such as heat pump installations.
According to Nazar: “The way we see it working is having investable projects and spending to save. Solar pays for itself quickly. LED pays for itself quickly. You take the savings from those and use them to fund the more expensive infrastructure.”
Being ready for funding when it comes
While large-scale national funding programmes are unlikely to return in the near term, smaller devolved pots are emerging through combined authorities such as Greater Manchester and the West Midlands. The critical difference is scale and competition. Where PSDS was a £1.4 billion programme, these funds are typically £20 to £30 million, and the application windows are short.
“If funding opens and you have not already established what your estate needs and what your decarbonisation journey looks like, you will not get it done in a month”, says Naz. “There is too much assessment to do, too much heat modelling, too much pricing.”
The answer is to have projects ready to go, with feasibility studies completed, costs modelled, and a clear picture of the carbon savings a project will deliver. When a funding window opens, the work of assembling your application should already be done.
Jenny reinforces the practical steps: “Get your condition surveys up to date. Create an asset management plan. Put your estate strategy in place. Look at your energy and sustainability position. Have light specifications drawn up and work tendered, so you already know your costs. Do your due diligence on your supply chain in advance, not when the funding opens.”
PFI contracts: Act before expiry, not after
For schools and colleges operating under Private Finance Initiative (PFI) contracts, a separate and time-sensitive issue is coming into focus. PFI contracts are now reaching expiry in significant numbers, and the issues that arise at handback can be substantial.
Jenny’s advice is clear: “If you have a PFI contract, start reviewing it several years before expiry. That sounds like a long time, but there is a great deal to work through.”
Even for those not yet approaching expiry, active contract management is essential. That means reviewing lifecycle spend on key assets such as boilers and roofs to ensure scheduled works are being completed. It means comparing condition surveys against lifecycle budgets. And it means benchmarking soft FM services, energy prices, and insurance costs to ensure you are getting value.
Where contracts are approaching expiry, the risk of inheriting a building with significant outstanding condition issues, such as a roof replacement that should have been completed under the contract, is real. Understanding the condition of those assets well in advance of handback is essential to protecting your position.
What should education estate managers do now?
The picture across the education estate varies widely. Some schools and trusts have well-developed estate strategies and a clear route to net zero. Many others are at an earlier stage, managing urgent condition issues without the data or plans needed to access funding or make strategic decisions.
Whether you are starting from scratch or refining an existing programme, the priority is the same: understand your estate, formalise your plans, and get your projects to a position where you can move quickly when opportunities arise.
If you would like support with condition surveys, estate strategy, decarbonisation planning, or PFI contract management, our team is here to help. Please complete the contact form on our website to arrange a consultation.
