EP 03/2003
DfES funding announcement 2003-04 to 2005-06
| To: | Heads of HEFCE-funded institutions Heads of universities in Northern Ireland |
| Of interest to those responsible for: | Finance, Planning, Student numbers |
| Reference: | EP 03/2003 |
| Publication date: | 28 January 2003 |
| Enquiries to: | Regional consultants and higher education advisers |
1. The HEFCE Board at its meeting on 23 January welcomed the announcement by the DfES of a 19 per cent cash increase in funding for higher education for the financial years 2003-04 to 2005-06. The resources (recurrent and capital grants and tuition fees) for universities and colleges will increase from £6,406 million previously announced for 2003-04, to £7,599 million in 2005-06.
2. The Board welcomed the increased resources, but noted that most of the extra funding would be required to deliver additional activities and contribute to increased employers' costs.
3. The Board welcomed the extra £50 million in 2004-05 (£117 million in 2005-06) to underpin the human resource strategies developed by universities and colleges, and noted confirmation that the existing £170 million for 2003-04 is to be consolidated in mainstream recurrent funding in 2004-05.
4. The increases in recurrent funding for research amount to £80 million in 2003-04, £107 million in 2004-05 and £246 million in 2005-06.
5. There are also substantial increases in capital funding for research, teaching and IT, from the previously announced £364 million for 2003-04 to £649 million by 2005-06, representing an increase close to 80 per cent. The Board will consider how to distribute the capital for teaching and IT in February.
6. The Board considered the second round of the Science Research Investment Fund (SRIF 2). Details of these allocations will be published shortly.
Board decisions
7. The Board provisionally agreed that the total grant to be distributed for the 2003-04 academic year is £5,476 million. This represents a cash increase of 7.5 per cent on the equivalent figure for 2002-03. The grant announcement provides a real terms increase for research, while the unit of resource for teaching will be maintained in real terms in 2003-04.
8. The grant will comprise:
- £3,403 million for teaching, widening participation and improving student retention
- £1,042 million for research
- £450 million for special funding
- £364 million for earmarked capital
- £170 million for rewarding and developing staff
- £47 million to compensate institutions for increased employers' contributions to the Teachers' Pension Scheme (TPS).
9. The Board particularly welcomed the increase to the TPS, which brings the employers' contribution very close to that for the Universities Superannuation Scheme (USS), of which the pre-1992 institutions are members. The Board also agreed to provide £16 million to contribute to the additional TPS costs between April and July 2003.
Funding for research
10. The Board discussed proposals for research funding for 2003-04. As stated in paragraph 15 of the grant letter to the HEFCE from the Secretary of State, these have been submitted to Ministers before implementation.
Funding for teaching and widening participation
11. The Board decided to recognise more fully the additional costs incurred by universities and colleges associated with recruiting and retaining students that are under-represented, or at higher risk of dropping out. A total of £255 million will be identified within teaching grant to help meet the costs of recruiting and supporting non-traditional students, including part-time and mature students, and the costs of improving retention. This represents 7.5 per cent of the funds for teaching. The Board will consider how to distribute these funds in February.
Student numbers
12. The Board congratulated the sector for recruiting so well in 2002-03. Universities and colleges have increased total student numbers by 42,200. They have delivered the growth planned for the current year and also made up for the shortfalls in the previous years. The implications of this successful recruitment are that much of the planned growth for 2003-04 and 2004-05 will be met by in-built growth.
13. Existing commitments for additional student numbers in 2003-04 amount to £50 million. The Board decided to provide a further £21 million to be allocated through the recent bidding exercise. This means that only about 20 per cent of the places bid for will be awarded.
Next steps
14. Further consideration of the distribution of the grant will take place at the Board meeting on 26 February. The Board will also consider further the Government's White Paper and the implications for the HEFCE's draft strategic plan for 2003-08, due to be published in March.