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Dear Vice-Chancellor or Principal

1.   This letter invites applications for funding from institutions to shift the balance of their provision towards strategically important and vulnerable subjects (SIVS) in 2010-11. The subjects in question are certain science, technology, engineering and mathematics subjects and modern foreign languages. Applications for funding to support such a movement of student numbers should be submitted by noon on Friday 23 April 2010.

2.   Institutions will also be aware that the University Modernisation Fund was announced by the Secretary of State following the Chancellor of the Exchequer's budget statement on 24 March. This is a new £270 million fund that has been established to respond to two imperatives: enabling more young people to enter higher education to gain skills that the economy needs, while also supporting universities (and colleges) to take the robust action needed to increase efficiency and reduce cost over the medium term. Two further circular letters will be issued shortly: one on the process for allocating £250 million for additional new entrants and efficiency activities in 2010-11 through the University Modernisation Fund (HEFCE Circular letter 08/2010), and the other on the process for allocating £20 million funding for a shared services pilot scheme through the University Modernisation Fund (HEFCE Circular letter 07/2010).

3.   We have allocated up to £10 million for this initiative, which is intended to support the movement of between 3,000 and 6,000 undergraduateSee note 1 full-time equivalent (FTE) students in 2010-11 (depending on the subjects involved and their related costs).


4.   In its recent report HEFCE's SIVS advisory group found that demand for vulnerable STEM subjects appears to be increasing at a greater rate than the averageSee note 2 and that employers consistently indicate a requirement for graduates in these subjects. Our aim in undertaking this exercise is therefore to support institutions that are able to respond positively to the growth in demand for vulnerable STEM subjects.

5.   The latest UCAS data on applications for 2010-11 suggest an increasing demand for vulnerable STEM subjects among students. However, this demand occurs in the face of a cap on the number of students starting full-time undergraduate study as well as a real-terms reduction in the funding provided for each student. In these circumstances we are concerned that institutions will be unable to respond to the upturn in demand by increasing the number of places in these subjects. As the SIVS advisory group's report makes clear, such a situation could stifle both the flow of highly valued graduates into employment and the upturn in aspiration to study these subjects.


6.    Funding is available to HEFCE-funded higher education institutions (HEIs) and further education colleges (FECs) with over 100 directly funded FTEs for courses of prescribed higher education (see Annex D of HEIFES09 (HEFCE 2009/37) for definition of eligible courses).

7.   We will provide funding for each additional full-time undergraduate entrant beyond an institution's 2008-09 number of HEFCE-funded entrants in the identified subjects, where this increase is not already attributable to any ASNs allocated for provision in the subjects since then, any allocations of additional new entrants made through the University Modernisation Fund, or to any other adjustments or transfers affecting these subjects that we have implemented in our funding allocations. As each institution will be operating within an overall cap based on a similar baselineSee note 3, this will require a comparable movement of numbers from other subjects. Therefore we will provide:

  • £3,000 per FTE for institutions moving numbers from price group D into eligible subjects in price group B
  • £1,500 per FTE for movement from price group D into eligible subjects in price group C (mathematics and modern foreign languages)
  • £1,500 per FTE for movement from price group C (excluding mathematics and modern foreign languages) into eligible subjects in price group B.

We will not provide funding for movement between subjects in the same price group, because there are no cost implications arising from this.

8.   These sums are intended broadly to reflect the difference between the price groups. Funding will be provided as a separately identified and monitored element within the mainstream teaching allocation, and so both the movement of students between subject areas and the additional funding provided will influence an institution’s position within the tolerance band (though these effects should generally cancel each other out). We expect any shift in entrants towards the eligible subjects to be maintained in subsequent years. The funding available for those later years will be finalised by our Board once we have received the relevant grant letters from the Department for Business, Innovation and Skills (BIS). We are however committed to £10 million for 2010-11 and committed in principle to £20 million and £30 million in 2011-12 and 2012-13 respectively.


9.   The focus of these allocations will be on full-time undergraduate entrants, and the baseline number against which the movement of entrants will be assessed will be numbers in 2008-09. This is consistent with the fact that the cap on students starting full-time undergraduate study in 2010-11 also uses a baseline drawn from 2008-09.

10.   Coverage of this initiative is restricted to the vulnerable STEM subjects and modern languagesSee note 4. Annexes, available on the HEFCE web-site, define the subjects eligible for this purpose: Annex A defines them in terms of academic cost centres (for HEIs) and Annex B defines them in terms of the learndirect codes (for FECs) (see paragraph 13). This is consistent with our SIVS policy and our approach to the recent ASN allocations. For students to be countable towards this allocation, at least 50 per cent of their overall activity must be attributable to one or more of the eligible subjects. We will not support proposals relating, for example, to more students taking individual modules that represent only a minor part of their overall activity.

11.   This is a new initiative and we may subsequently offer this funding to more subjects following further engagement with Government and the UK Commission for Employment and Skills on skills priorities, and the progress of consultation on teaching funding from 2012-13.

Application process, selection process, criteria and timescale

12.   HEFCE-funded HEIs and eligible FECs that wish to apply for funding should download and complete the template 'Application for support for moving numbers into SIVS' and e-mail it to by noon on Friday 23 April 2010. They should review the annexes that are also on the HEFCE web-site before completing the template.

13.   Applications will initially be assessed for fundability by HEFCE institutional teams. This will include the following three checks:

  • that provision will be moved into SIVS as defined at Annexes A and B
  • that institutions have capacity to move from the identified price groups. We will not, for example, accept proposals that seek to move provision from price group D into price group C if the institution’s HESES09 or HEIFES09 data report insufficient numbers already in price group D
  • that any transfer of provision increases entrants in SIVS beyond the total of 2008-09 numbers plus any ASNs and other adjustments for provision in SIVS since then (details on ASNs are in the Excel document 'Most recent allocations of ASNs available for 2010-11'.

14.   All applications will then be reviewed by a central HEFCE team. Depending on the level of demand, we may need to reduce allocations; if so, this will be carried out as a proportionate reduction to the numbers proposed for movement in each subject area. We may also take into account the fit of the proposal with the institution’s strategy and HEFCE's strategic aims.

15.   Our Board has delegated authority to our chief executive to finalise these allocations. We aim to present the final recommendations for approval by our chief executive on 18 May 2010. Institutions will then be informed by 24 May 2010 about outcomes by a letter from their HEFCE regional consultant. Funding will commence in August 2010, initially for one cohort of students starting in the 2010-11 academic year. Funding in subsequent years will be confirmed by our Board later, in the light of relevant grant letters from BIS. However, we expect institutions to maintain the higher levels of entrants in the eligible subjects in later years and we will therefore look to provide funding accordingly.


By noon 23 April 2010 Templates for the transfer of funding received from HEIs and FECs
26-30 April 2010 Eligibility check of applications
By 10 May Applications reviewed by assessment panel
18 May 2010 Funding allocations reviewed and agreed by our chief executive
By 24 May 2010 Institutions informed about funding allocations
July 2010 Funding confirmed in July grant tables
August 2010 Funding comes to institutions


16.   This funding will be subject to a separate condition of grant and monitoring arrangements. Initial monitoring will be carried out through asking institutions to confirm the movement of students: through their annual monitoring statements for HEIs, and, for FECs, an e-mail from the head of institution to HEFCE’s institutional team by 1 December 2010. We will then undertake further monitoring through a comparison between HESA/ILR 2008-09 and HESA/ILR 2010-11 which will be available in January 2011. This monitoring will be repeated as necessary for subsequent years. We reserve the right to withdraw funds in the event that the proposed movement of student numbers is not undertaken.

17.   Since the new funding and the movement of student numbers will be reflected in our calculations of mainstream teaching grant, the success or otherwise of an institution's applications for funding may affect its position in or outside the tolerance band. We will avoid duplication in any grant adjustments that we implement for institutions that exceed their contract range as a result of not delivering the movement of numbers expected from their successful applications for funding.

Freedom of Information Act 2000

18.   HEFCE is subject to the Freedom of Information (FOI) Act 2000 which gives a public right of access to information held by a public authority. This may result in applications, communications between us and the institution, information arising from this work, or the outputs from the work undertaken being subject to disclosure if a valid request is made to us. We will comply with such requests in accordance with the legislation and our own policies.

19.   Institutions may, if they wish, provide potentially sensitive information (such as information relating to commercial interests) in a separate annex attached to the application for funding. This will highlight to us that there are concerns over disclosure.

20.   Where we consider it to be appropriate and practicable we will seek the views of applicants before disclosing this information. The applicant acknowledges that information provided in any annex is of indicative value only and that HEFCE may nevertheless be obliged to disclose this information. Our assumption will be that all information in the main application document may be disclosed upon request. Further information about FOI can be found on the Information Commissioner's web-site.

Yours sincerely

Sir Alan Langlands

Chief Executive


  1. For a definition of undergraduate, see Annex J of HESES09 (HEFCE 2009/36) for HEIs and Annex J of HEIFES09 (HEFCE 2009/37) for FECs.
  2. The HEFCE Advisory group's latest report.
  3. As indicated in Toby West-Taylor's letter of 24 February 2010.
  4. We have not included quantitative social science because this is being addressed through a separate initiative run by the Economic & Social Research Council.  

Date: 1 April 2010

Ref: Circular letter 06/2010

To: Heads of HEFCE-funded further education colleges, Heads of HEFCE-funded higher education institutions

Enquiries should be directed to:

HEFCE institutional teams