The 2025 Spending Review reaffirmed the government’s commitment to renewing and expanding England’s education estate, placing capital delivery at the centre of long-term policy.

Alongside significant funding allocations, key developments—including Construction Framework 2025 (CF25), the 2026 Schools White Paper on SEND reform, and the expansion of the School Rebuilding Programme (SRP)—are reshaping the capital landscape. However, rising construction costs, supply chain pressures and delivery capacity constraints continue to limit progress.

Schools: Ambition meets constraint

Schools remain the primary focus of capital investment. The School Rebuilding Programme (SRP) continues to receive £2.4 billion annually to 2029, targeting the most deteriorated estates. Recent policy has expanded its long-term ambition to over 750 schools and sixth-form colleges by 2034–35, up from a current pipeline of just over 500 projects. Maintenance funding will also increase to £2.3 billion by 2029–30, supporting compliance and essential repairs. Despite this, the scale of need remains significant: England’s 29,000 schools face a £13.8 billion backlog of high-priority repairs. Inflation in materials and labour continues to erode purchasing power and slow delivery. While SRP expansion signals ambition, it will still reach only a small proportion of the estate, meaning the structural capital shortfall persists.

SEND reform: Capital implications

The 2026 Schools White Paper sets out major SEND reform focused on inclusion, early intervention and consistency. From 2026, it is supported by a multi-billion-pound capital programme that will reshape education estates. Central to this is £3bn–£3.7bn to deliver around 50,000–60,000 new SEND places through new special schools, expansions, and resource bases within mainstream settings. An initial £860 million tranche from 2026 will increase local capacity and reduce reliance on out-of-area placements. Alongside new builds, there is a strong emphasis on mainstream inclusion, driving demand for adapting and retrofitting existing schools—such as sensory spaces, therapy areas and specialist teaching environments. Wider SEND funding of around £4 billion (mainly revenue) will further stimulate capital demand by enabling expanded provision and workforce growth, requiring additional and reconfigured space. Overall, this marks a shift to a dual system of mainstream inclusion and targeted specialist provision, combining large-scale builds with numerous smaller adaptations and creating a more complex capital pipeline.

CF25: Strengthening delivery capacity

The £15.4 billion Construction Framework 2025 (CF25), replacing CF21 from November 2025, aims to strengthen delivery capacity, diversify the contractor base and reduce procurement bottlenecks. By widening participation beyond a small pool of major contractors, CF25 seeks to mitigate delivery risk and improve resilience amid labour shortages, inflation and supply chain volatility.

Early Years: Expansion challenges

From 2026, early years provision moves fully into delivery following the rollout of school-based nurseries. Backed by £370 million, the programme is expected to deliver around 6,000 new childcare places through completed and pipeline schemes. The focus is increasingly on embedding provision within existing school estates, requiring adaptation rather than new build. This includes outdoor learning areas, safeguarding-compliant layouts and EYFS-aligned spaces. Delivery remains complex: many sites require bespoke solutions, placing pressure on budgets and local authority capacity. Workforce shortages and supply chain constraints continue to limit progress, meaning rollout is likely to be phased and uneven.

Specialist investment pressures and decarbonisation

Capital investment in post-16 education is focused on Technical Excellence Colleges (TECs) supporting regional growth sectors. These facilities require high-specification equipment and advanced digital infrastructure, often involving new builds. Rising construction and equipment costs increase the likelihood of phased or scaled-back delivery. The closure of the Public Sector Decarbonisation Scheme and Low Carbon Skills Fund has removed key funding streams for energy-efficiency and heating projects. As a result, many schools are unable to progress decarbonisation works, widening the gap between policy ambition and available capital.

Higher Education and PBSA

Universities are increasingly prioritising consolidation over expansion, focusing on maintenance, targeted upgrades and energy efficiency. The Autumn 2025 Budget introduced a levy on international students: from August 2028, institutions will pay £925 per student annually (above a threshold), around 4.9% of average fees. With international enrolments already declining, this may further reduce demand and intensify financial pressures. Demand for purpose-built student accommodation (PBSA) remains strong, with a national shortfall potentially reaching 580,000 beds. Growth will be concentrated in major cities such as London, Manchester, Birmingham, Leeds and Nottingham, focusing on high-quality, premium and mid-market developments rather than widespread expansion.

Education capital investment reflects both ambition and constraint. The expansion of the SRP signals a strengthened commitment to estate renewal, while CF25 improves delivery capacity and SEND reform drives new demand. However, inflation, supply chain challenges and historic underinvestment continue to limit progress. Even with an expanded SRP, the scale of need remains far greater than current programmes can address. Delivering meaningful improvement will depend not only on funding, but on the sector’s ability to deliver at scale while responding to evolving priorities.