Capital funding

Capital funding is additional funding that the government provides to support sustainable investment in higher education.

It supports capital expenditure – that is, money used to acquire or maintain fixed assets, such as land, buildings and equipment, which is normally capitalised in the provider's audited annual accounts.

It does not include expenditure on rent, or hiring or leasing of equipment and facilities.

How we allocate funds

We distribute capital funding in two ways:

1. A small annual formula allocation to all eligible providers.
2. In response to bids in a competitive exercise. This accounts for most of the funds we allocate. 

The guidance we receive from government specifies the capital funding available for us to distribute.

Our 2021 consultation on capital funding explains more about how we developed our current approach.

Funding for 2025-26

For the financial year 2025-26, we have £92 million to distribute. The financial year runs from April 2025 to March 2026.

We received an initial capital funding allocation of £84 million from government in May 2025.

In October 2025 we received an additional £8 million as part of the Engineering Skills Package from the Department for Energy Security and Net Zero.

This covers the costs of specific projects delivering skills and training to support clean energy. 

Formula funding

The total amount of formula funding for 2025-26 is £7.75 million. The maximum allocation per provider is £30,000, and the minimum is £10,000.

This year, we are also allocating £3.5 million to Jisc. 

Jisc provides UK universities and colleges with shared digital infrastructure and services, such as the superfast Janet Network. The capital grant to Jisc is supporting network upgrades, cybersecurity and learning analytics.

Bidding competition

Our aim for this funding competition was to help raise the quality of learning and teaching facilities and support high quality, skills-based education.

The competition ran during the summer and early autumn of 2025.

We received 193 bids, and with the funding available to us were able to fund 60 projects at various types of providers across the country.

We have allocated formula capital funding to 266 eligible providers. 

Monitoring capital funding

All providers that receive capital funding must report on how they use it at the end of each financial year.

We also publish an annual capital funding monitoring guidance document in February or March. This explains the monitoring process for the year and how to return information to us.

Providers must spend in full all the capital funding we allocate to them, in accordance with our terms and conditions of funding, by 31 March 2026. We will request reports on the use of the funds in April 2026.

We proactively monitor the progress and spend of the projects we are supporting, so that we can provide advice and guidance as and when required throughout the funding period.