OfS announces the allocation of £88.5 million of capital funding to universities and colleges across England

The funding will support investment in new buildings, facilities and equipment for universities and colleges across England. It consists of £80.75 million awarded through a bidding exercise, as well as £7.75 million distributed through a formula.

Successful bids had to demonstrate how they will address the government’s industrial strategy and priority sectors for growth or meet the needs of local employers and regional economies. The successful bids also had to offer excellent value for money and support environmental sustainability measures as appropriate.

The OfS is providing project funding for 60 universities and colleges, including:

• The University of Lancaster, which has been awarded £2 million to develop the Lancaster University Flexible and Immersive Nuclear Simulator for Future Skills Development (LUNar). This is a new educational facility designed to train students as future professionals in nuclear engineering, cyber security, and related disciplines.
• Yeovil College, which has been awarded £2 million to transform the ground floor of its Engineering building, equipping it with specialist technology and reconfiguring teaching spaces to support high-level skills development in Advanced Manufacturing, Clean Energy, and Defence Engineering.
• Liverpool Institute for Performing Arts, which has been awarded £2.5 million to deliver phase two of works at One Hope Place, aimed at expanding its digital and creative industries education. The project includes the creation of a specialist artificial intelligence (AI) lab to explore the use of AI applications in the creative industries, enhanced facilities for performing arts integrated virtual production and advanced visualisation, and new digital tools for hybrid music performance spaces.
• Durham University, which has been awarded £1.7 million to deliver seven projects across three priority areas—Creative Industries and Digital Media, Chemical Automation and Sustainable Materials, and Engineering and Clean Energy Technologies. This investment includes the development of new facilities for digital image capture, immersive technologies, and AI-driven analysis to meet skills needs. The funding will also support the creation of a Chemical Automation facility and a Sustainable Materials Lab to embed green chemistry and digital skills into undergraduate education. In engineering, the proposal includes upgrades to teaching labs and the creation of a Flight Controls Laboratory to build more capacity in Clean Energy and Advanced Manufacturing.

OfS Director of Resources and Finance, Nolan Smith, said:

‘This year’s funding allocation will help a broad range of universities and colleges to ensure their students can access the facilities and equipment they need to succeed.

‘This was a very competitive funding round, and the projects we are supporting will make a tangible difference to current and future students. As well as expanding opportunities for students in strategically important subject areas, these projects will offer a boost to local and regional economies and promote national growth.’

Skills Minister Jacqui Smith said:

‘This government is committed to supporting colleges and universities as engines of opportunity and growth up and down the country.

‘This cash boost from government ensures young people are using the most up-to-date tech and facilities, helping them to secure a future in the well-paying, highly-skilled jobs that are crucial for our Plan for Change.

‘It will help build towards the Prime Minister’s target of two thirds of young people taking a gold standard apprenticeship or heading to university by the age of 25 – driving prosperity for families in every town and city.’

Notes

1. The Office for Students is the independent regulator for higher education in England. We are striving to deliver exemplary regulation in the interests of students. Find out more about our new strategy.
2. In May 2025, the Secretary of State for Education issued a guidance letter to the OfS, which announced capital funding of £84 million in total, to be distributed in the financial year 2025-26. Of the £84 million announced in the letter, approximately £80.5 million is being used to fund a set of projects across the country and for an annual formula capital allocation. The remaining funds are being used to support Jisc, as confirmed earlier this year.
3. In October 2025, as part of the Engineering Skills Package, we received an additional £8 million from the Department for Energy Security and Net Zero, to cover the costs of specific projects focused on delivering skills and training to support clean energy. This funding has enabled us to support additional projects and increase opportunities for students.
4. Projects eligible for funding were capital expenditure projects that support the capital needs of providers in delivering courses that will address the government’s current strategies and priority sectors for growth and/or meet the needs of local employers and regional economies as identified through one or more of the following: 

• The needs of local employers and regional economies, as identified in Local Skills Improvement Plans. 
• Skills England’s priorities as set out initially in autumn 2024 – these reflect the sectors for growth as identified in the Industrial Strategy and others highlighted as essential to the government’s overall objectives. These 10 sectors are: 
  • advanced manufacturing 
  • clean energy industries 
  • creative industries 
  • defence 
  • digital and technologies 
  • financial services 
  • life sciences 
  • professional and business services 
  • construction 
  • health and social care.