The main elements of the grant are £4,727 million for teaching, £1,603 million for research and £150 million for the Higher Education Innovation Fund. In addition HEFCE is providing £562 million for earmarked capital grants and £294 million for special funding (see note 2).
The changes in allocations to individual universities and colleges vary (see the summary of grant tables) depending on a number of factors. The most significant are the increased concentration of funding to universities with the highest quality research (see note 3), funding for additional student places, reduction in targeted allocations which have formed part of teaching grants (see note 4) and the withdrawal of moderation funding from the current academic year, 2009-10 (see note 5).
Sir Alan Langlands, Chief Executive of HEFCE, said:
'In these testing economic times we have done all that we can to maximise the flexibility that universities and colleges have to meet their priorities and pursue new opportunities. We have done this by protecting core funding and concentrating on what really matters: high quality learning and teaching, world class research and the important contribution that higher education makes to the economy and society.
'About half of all institutions will receive cash increases, but others will face reductions in funding. In some cases we are providing moderation funding enabling institutions to adjust to lower level funding in the next academic year. Our overall approach has been to maintain quality. Working within the available resources we have also maintained our commitment to key policies including widening participation, supporting strategically important and vulnerable subjects, strengthening the research base and promoting interaction with the business community.
'Managing in times of financial constraint is not easy, but we believe that universities and colleges will continue to meet the needs of students, users of research and the wider community as they have done in the past. Higher education represents an excellent investment for the country with every pound spent yielding three pounds to the economy. We will continue to make the case robustly for higher education which, as the Government recognises, has an essential role in creating a vibrant economy and a just society.'
Early student returns show that there were 389,000 undergraduate home and EC entrants to higher education in 2009-10 in England bringing the total number of such students in all years to 1,009,000. Overall the number of students in 2010-11 will continue to grow to record levels because of the in-built growth from earlier years. However, the new controls on entrants will begin to stabilise growth in future years. (See additional notes on student numbers.)
Support for STEM and modern languages
The total for teaching includes £10 million that has been set aside to support institutions that are shifting the balance of their provision towards vulnerable science, technology, engineering and mathematics (STEM) and modern languages subjects. The distribution of this funding will be confirmed later this year, along with some additional funding for widening participation, and improving retention.
- Recurrent grants for 2010-11 (HEFCE 2010/08)
- Although the total grant of £7,356 million for 2010-11 is a reduction in cash terms of £573 million compared to the budget for 2009-10 of £7,929, this is largely due to the bringing forward of £250 million of capital funding from 2010-11 into 2008-09 and 2009-10. Adjusting for this capital shift, the underlying reduction in grant from 2009-10 to 2010-11 is £123 million (1.6 per cent in cash terms).
- When compared with the 2009-10 academic year, the 2010-11 allocation represents:
- a 0.9 per cent cash increase for recurrent grants (teaching, research and the Higher Education Innovation Fund)
- a 0.4 per cent increase in recurrent teaching funding and a 2 per cent recurrent funding increase for research
- a 14.9 per cent reduction in cash terms in capital funding after adjusting for the £250 million of capital funding that was brought forward from 2010-11 into 2008-09 and 2009-10
- a 7 per cent reduction in cash terms in special funding.
- As an initial step to meet the Government's wish for more research concentration we have enhanced funding for world-leading research by introducing a steeper funding 'slope' for all subjects by increasing the weightings for research activity at different quality levels from the previous 1:3:7 to 1:3:9. We continue to recognise excellence wherever it is found.
- We are reducing teaching funding by £76 million in 2010-11 in relation to three targeted allocations, as previously notified in 'Changes to teaching funding targeted allocations for 2010-11' (HEFCE Electronic publication 11/2009).
- withdrawing £40 million for old and historic buildings in 2010-11
- withdrawing £24 million related to accelerated and intensive taught postgraduate provision in price group D
- phasing out over two years the additional £24 million funding provided to support foundation degrees. The allocation will therefore be reduced to £12 million in 2010-11 and withdrawn fully in 2011-12. Thereafter foundation degree students will be funded at the same rate as other undergraduate students.
- As in previous years, we are providing funds to moderate significant reductions in teaching and research funding. The £20 million moderation funding is provided, as in previous years, for one year only to enable institutions to secure change and manage the transition to lower funding levels. No institution should see a reduction of more than 0.8 per cent in cash terms compared with the equivalent unmoderated figure for 2009-10. The removal of the previous year's moderation funding explains why some institutions have a decrease of more than 0.8 per cent.
- The institutional allocations show an average 0.4 per cent increase in recurrent grant for the sector. There remains £23 million to be allocated later in the year. We have provided an uplift (at 1.25 per cent) to the main teaching grant allocation for each institution.
- The grant letter from the Department for Business, Innovation and Skills (BIS) of 22 December 2009 did not confirm funding for the 2011-12 financial year. In order to announce funding for the 2010-11 academic year, which has a four-month overlap with the 2011-12 financial year, we have assumed that funding will be maintained in cash terms for 2011-12. If this proves not to be the case, then we reserve the right to review all of our allocations for the 2010-11 academic year.
- HEFCE recurrent funding is a 'block grant' that higher education institutions can spend at their own discretion, in support of teaching, research and related activities.
- The allocations are provisional. We will finalise them in time for the funding agreements that are issued in July.
Capital and special funding
- For 2010-11 we will allocate £562 million in capital funding, which represents a 14.9 per cent reduction in cash terms on the 2009-10 allocation. This is after adjusting for £250 million of capital funding that was brought forward from 2010-11 into 2008-09 and 2009-10. Capital allocations for 2008 to 2011 were announced separately in January 2008.
- Special funding totals £294 million in 2010-11, 4 per cent of total HEFCE funding. Its purpose is to support activities outside our recurrent and capital funding. Special funding includes the HEFCE contribution to the Aimhigher programme, HEFCE's Strategic Development Fund, and the Joint Information Systems Committee. A full list of all allocations is given in Table 3 in the Recurrent Grants document.
Additional notes on student numbers
- The previous and current Secretaries of State have warned universities and colleges over the past two years that any over recruitment of full time undergraduates could result in a transfer of HEFCE grant back to BIS. Institutions were told that they should not recruit in 2009-10 above their 2008-09 student intake level, plus any additional student numbers awarded. This is the permitted level used to control student numbers.
- In 'Higher education finances for 2009-10 and 2010-11' (HEFCE Circular letter 32/2008, November 2008) HEFCE asked institutions to review their planned recruitment for 2009-10 in order to avoid any further increase in full-time undergraduate and Postgraduate/Professional Graduate Certificate in Education (PGCE) entrants above the level of their actual admissions in 2008-09, plus any additional student numbers allocated to them for 2009-10.
- In response to the 22 December 2009 grant letter from BIS, HEFCE will make adjustments to those institutions that have over recruited in 2009-10 at a rate of £3,700 per full time undergraduate and PGCE student recruited above the permitted level. This action has been taken to reduce the pressure on student support costs, to protect the unit of resource (funding per student), and to safeguard the position of institutions that followed the warnings given by Government and HEFCE about not recruiting above the permitted level.
- HEFCE is in discussion with a number of institutions that have recruited in 2009-10 above their permitted level. Grant adjustments to their funding are not reflected in the provisional grant announcement being made today. These are subject to appeal and the final grant adjustments will be reflected in the July funding announcement, which will be published. The Council expects that the number of students over recruited to be around 6,000 out of a total of 389,000 new entrants.