Over £1bn of new funding will be allocated to provide free school meals for all infant school children and disadvantaged college students.

Deputy prime minister Nick Clegg confirmed the Autumn Statement had made £450m in 2014/15 and £635m in 2015/16 available to the Department for Education to fund the policy, which was originally announced at the Liberal Democrats’ party conference in September.

Seemingly in a bid to assuage fears that school catering facilities would be unable to cope with making meals available from September 2014, £150m of capital will be made available to support construction of new kitchens and increase capacity.

Delivering his Autumn Statement, chancellor George Osborne said children would do better at school ‘when they have a proper meal inside them’.

‘This Autumn Statement has found the financial resources to fund the expansion of free school meals, in reception year one and year two,’ Osborne said, ‘announced by the deputy prime minister and supported by me.’

Council leaders welcomed the announcement, applauding the allocation of new money towards the initiative.

Cllr David Simmonds, chair of Local Government Association’s children and young people board, said: ‘The benefits the free school meals initiative will bring are not just nutritional but educational, and mums and dads will doubtless be pleased their children will get a free and healthy meal every day.

‘It is good news that money from existing budgets is not being diverted to fund this scheme and we are sure schools, parents and pupils will see the benefits of this plan.’

Deputy prime minister Nick Clegg said: ‘I made it very clear that universal free school meals would be my personal priority in this Autumn Statement and I’m proud that we are now delivering it.

‘Providing universal free school meals will help give every child the future they deserve, building a stronger economy and a fairer society.’

However, education catering company Taylor Shaw, which was involved in a free school meal pilot in 2009/11, warned schools may struggle to find the space to expand.

Jim Lovett, MD of Taylor Shaw, said: ‘Local authorities, or in some cases clusters of academies, need to think about how they can best make work together to deliver high quality, freshly-prepared meals without necessarily having all meals cooked on site.’