Sixth-form colleges will be able to become academies and join multi-academy trusts under plans announced on Wednesday.

Following a long-running battle to exempt the institutions from paying VAT, George Osborne confirmed on Wednesday that they would be given the opportunity to change legal status, and avoid the tax, as part of an ongoing restructure of post-16 education.

The Sixth Form Colleges Association, which has led a campaign to end what it saw as the unfair tax treatment of its members, has responded positively to the news.

Deputy chief executive James Kewin said it would help “move the sector from the margins of education policy to the mainstream”.

He said many sixth-form colleges were interested in academy status, as it would “allow them to foster closer relationships with schools”.

Schools Week understands that sixth-form colleges wanting to become standalone academies would have to make the case for such a set-up.

Most would be encouraged to become part of a larger trust.

Sixth-form colleges and other post-16 institutions have also welcomed the news that the per-pupil base rate of £4,000 for 16 and 17-year-olds and £3,300 for 18-year-olds will be protected in cash terms over the course of the parliament.