Welcome to Buzzacott’s first Further Education annual benchmarking report, providing insight into funding trends, cost structures, and financial resilience across the college sector.

Further Education (FE) institutions operate in a complex funding and delivery environment, characterised by multiple funding streams, diverse learner cohorts, and varied estates.

While colleges are subject to many of the same macroeconomic pressures affecting the wider education landscape and the economy at large, their structural characteristics give rise to distinct financial dynamics.

This report reflects that complexity and is intended to support governing bodies, senior leaders, and finance professionals in understanding how their institution compares with sector averages and identifying areas of relative strength and potential vulnerabilities.

Key messages from 2026

• Operating performance strengthened: EBITDA margins improved across most provider types, with General Further Education Colleges and Sixth Form Colleges reporting EBITDA margins of 6.2% in 2025, exceeding the Further Education Commissioner benchmark of 6%.

• Funding growth drove improvement: Financial performance has been supported primarily by increases in funding rates, particularly within 16–19 provision, rather than significant growth in learner volumes.

• Staffing remains the key financial driver: Colleges with lower staff cost ratios consistently reported stronger EBITDA margins. Colleges with staff costs below 60% of income achieved average EBITDA margins of 9.2%, compared with 3.3% for those with staff costs above 80%.

• Regional workforce pressures persist: Workforce costs continue to rise, with teaching staff costs increasing by around 20% and non-teaching staff costs by around 30% since 2021. Greater London remains the highest-cost region while also reporting the highest teaching productivity.

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About the report: Buzzacott’s Further Education benchmarking report 2026 provides insight into funding trends, workforce costs, estates investment, operating performance, and financial resilience across the Further Education sector. The analysis is based on financial and operational data from more than 200 colleges in England covering the period 2021-2025.