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Details are given in '2011/07' (HEFCE 2011/07).

The main elements of the grant are:

  • £4,339 million for teaching
  • £1,558 million for research (see Note 3)
  • £150 million for knowledge exchange (see Note 4)
  • £30 million for moderation funding to smooth significant year-on-year reductions (see Note 5)
  • £223 million for earmarked capital grants (see Note 6)
  • £207 million for special funding.

Key points

  • HEFCE has concentrated on supporting a smooth transition in 2011-12 to the new funding regime in 2012-13 when more funding will be routed to institutions via the student loans system
  • widening participation and improving student retention have been prioritised by maintaining funding in cash terms for these elements of teaching funding
  • funding for research is being allocated more selectively by prioritising internationally excellent and world-leading research
  • knowledge exchange funding is being maintained in cash terms, and incentives to increase interaction with business are being increased by concentrating funding on the most effective performers.

Sir Alan Langlands, Chief Executive of HEFCE, said:

'This is a challenging settlement for universities and colleges. In distributing the grant we have tried as far as possible to ensure a smooth transition to the new funding arrangements for higher education in 2012, when more public funding will be in the hands of students and less routed through HEFCE grants.

'As we work through these difficult times and shift to the new funding system we aim through our teaching funding to protect participation levels and students who require extra support to complete their courses. We also want, through our research funding, to ensure internationally excellent and world-leading research is properly supported. This includes maintaining partnerships with charities and industry, and supporting the next generation of researchers.

'We are also protecting funding for knowledge exchange through higher education innovation funding. Funding allocations, to be finalised in May, will ensure that high-performing universities continue to support the economic, social and cultural development of the country.

'The impact of the grant allocations affects universities and colleges differently, and virtually all see cash reductions. The withdrawal of the University Modernisation Fund and one-off funding in 2010-11 for moderation has led to significant reductions in some cases. We will continue to work with institutions as they adjust their activities to meet the growing financial pressures.'

Student numbers

Data returns for 2010-11 show that student numbers are broadly in line with the Government's spending plans. To ensure that this remains the case the Council has again written to institutions giving student number control limits for 2011-12. These relate to students starting full-time undergraduate and Postgraduate/Professional Graduate Certificate in Education (PGCE) study. HEFCE will continue to monitor each institution's student numbers, and where an institution has exceeded its limits this will result in a reduction to grant.

Adjusted allocations for 2010-11

The Council is also making reductions in funding for the academic year 2010-11 (1 August to 31 July) as a result of the grant announcement for 2011-12 by the Department for Business, Innovation and Skills (BIS). This is because the BIS announcement relates to the financial year (1 April to 31 March), and this affects the funding for the final four months of the 2010-11 academic year. Funding for the academic year 2010-11 is being reduced by £190 million (see Note 7).

Notes

  1. The overall grant, including capital, for the 2011-12 academic year of £6,507 million represents an underlying reduction in cash terms compared to the previously planned total for 2010-11 of £685 million (-9.5 per cent). In addition, short-term funding of £255 million is ending for some special funding programmes and the University Modernisation Fund (UMF), which was for 2010-11 only. These bring the total reduction to £940 million (-12.6 per cent).
  2. When compared with the allocations for 2010-11, published in October 2010, the 2011-12 allocation represents:
    • A 6.5 per cent cash reduction in recurrent grants for teaching, research, knowledge exchange (higher education innovation funding) and moderation. Within this overall cash reduction, teaching grant has reduced by 8.2 per cent and research by 2.8 per cent, while knowledge exchange funding has been maintained in cash terms.
    • A 58.1 per cent reduction in cash terms in capital funding.
    • A 33.2 per cent reduction in cash terms in special funding.
    See Table B, 'Recurrent grants for 2011-12', HEFCE 2011/07, which summarises all changes between 2010-11 and 2011-12.
  3. The total research funding of £1,558 million includes £1,085 million that is allocated selectively through our mainstream quality-related research (QR) funding method (including London weighting), based on the results of the 2008 Research Assessment Exercise (RAE). To ensure we continue to prioritise internationally excellent and world-leading research, we have reduced the weighting given in the mainstream QR funding method to activity rated 2* (internationally recognised) in the 2008 RAE sufficient to result in:
    1. a reduction in research funding of £45 million since the 2010-11 allocations announced in October 2010, plus
    2. a redistribution of half of the remaining funding previously allocated through mainstream QR on the basis of 2* activity, towards activity rated 3* (internationally excellent) and 4* (world leading).
  4. Knowledge exchange funding through the Higher Education Innovation Fund (HEIF) is being maintained in cash terms. Institutions' allocations have not been finalised and are not included in this announcement. Indicative allocations were shown in 'Higher Education Innovation Funding 2011-15: consultation on a threshold allocation; and indicative institutional allocations' (HEFCE Circular letter 06/2011), but are still subject to consultation. The final allocations will be announced in May.
  5. As in previous years, we are providing funds to moderate the most significant reductions in teaching and research funding. The £30 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. The removal of the previous year's moderation funding has contributed to reductions in funding for some institutions.
  6. For details of capital funding refer to the separate news item, also published today.
  7. The £190 million reduction in recurrent grant for 2010-11 comprises £40 million in estimated grant adjustments for individual institutions arising from their student numbers in 2010-11 and from some data audit and reconciliation exercises; and a further reduction of £150 million due to the cash reduction in the grant available to us for the 2011-12 financial year. Each institution's share of the £150 million reduction is given in 'Changes to recurrent grant for 2010-11' (HEFCE Circular letter 09/2011). The total comprises:
    • £122 million as pro rata reduction to teaching grants, other than funding for widening participation and improving retention
    • £27.6 million as a pro rata reduction to research grant.
  8. A summary of 2011-12 grant tables is available.