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These decisions were taken in the light of the grant letter of 20 December 2010 from the Department for Business, Innovation and Skills (BIS). Details of the approach taken by the Board and its decisions are contained in 'Funding for universities and colleges for 2010-11 and 2011-12' (HEFCE Circular letter 05/2011).
The Board agreed the allocation of £6,507 million for the 2011-12 academic year covering teaching, research, capital and related activities (see note 1). The grants to individual institutions will be decided by the Board at its meeting on 3 March, and the full grant announcement will be published on 17 March.
The Board has also had to make reductions in funding for the academic year 2010-11 (1 August to 31 July) because the BIS grant announcement for 2011-12 relates to the financial year (1 April to 31 March) which affects the funding for the final four months of the 2010-11 academic year.
As a result funding for 2010-11 will be reduced by £162 million for teaching and £27.6 million for research. These reductions will largely be made on a pro rata basis and implemented through HEFCE's monthly grant payments to institutions between April and July 2011. The reduction to teaching grant is 3.5 per cent and the reduction to research is 1.7 per cent compared to previously announced figures (see note 2).
The Board decided that the £6,507 million for the 2011-12 academic year should consist of:
Sir Alan Langlands, Chief Executive of HEFCE, said:
'This is a challenging financial settlement. We are attempting as far as possible to support a smooth transition for all institutions to the new student finance and funding arrangements which will take effect in academic year 2012-13. Universities and colleges have anticipated the challenges ahead and many have already taken difficult decisions to reduce their costs.
'As far as funding for teaching is concerned we are supporting widening participation and improving the retention of students by maintaining funding for these programmes in cash terms. We are also reducing funding to other elements of teaching on a pro rata basis to maintain stability as far as possible and minimise uncertainty in a difficult transitional year.
'We welcome the decision of Government to ring fence and maintain in cash terms the overall funding provided by BIS for science and research, including the funding for the Higher Education Innovation Fund, which supports the links between universities and business. In line with the Government's priorities, we will distribute funding for research on a more selective basis and, following consultation, will allocate HEIF support to the most effective performers.
'Looking forward we will focus on the core strengths of higher education – excellence in teaching and research and effective knowledge exchange, supporting the growth of a vibrant economy – while recognising the overriding priority of securing the student interest.'