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HEFCE closed at the end of March 2018. The information on this website is historical and is no longer maintained.

Many of HEFCE's functions will be continued by the Office for Students, the new regulator of higher education in England, and Research England, the new council within UK Research and Innovation.

The HEFCE domain - - will continue to function until September 2018. At this point we will close the site entirely and all its information will only be available from the National Web Archive.


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The report, ‘Strengthening the Contribution of English Higher Education Institutions to the Innovation System: knowledge exchange and HEIF funding’, (Note 2) draws on institutional strategies submitted to HEFCE. These strategies set out how universities are using £600 million in Higher Education Innovation Funding (HEIF) (Note 3). 

Some headlines from the report:

  • The report estimates that every pound of HEIF investment, gives a returns of £6 in gross additional KE income, a proxy for the impact on the economy. However, this is likely to represent an underestimate of the total benefits.
  • Knowledge exchange is embedded within the HE sector and has become a strategic, integrated activity, driven in part by the research impact agenda. As one University (Cambridge) put it: ‘research excellence and return to the UK economy should be a common goal’.
  • Integration is also being driven by forces from the new student fees regime, with a particular focus on student employability, including 75 per cent of higher education institutions (HEIs) putting greater emphasis on student entrepreneurship.
  • 60 per cent of HEIs highlight the infrastructure for innovation they provide for their local economies. This can bring together the various innovation support services in an area, and establish a university as an ‘anchor’ of its city or region.
  • HEIs are playing an increasing role in supporting exports from the UK.
  • Four-fifths of HEIs are making changes to their internal infrastructure to improve the efficiency of their KE investments.
  • Universities continue to play a key role in the UK’s innovation system, and are an important driver for economic growth and recovery. A new model of higher education’s role in innovation is presented in the report. 

Commendations for good practice

As part of the assessment of HEI strategies and allocation of HEIF, an expert group (Note 4) commended seven institutions and two partnerships for their good practice (Note 5). They are:

  • Cranfield University
  • University of Exeter
  • University of Hertfordshire
  • University of Manchester
  • Newcastle University
  • University of Oxford
  • Staffordshire University.

 The group also praised two innovative collaborations:

  • Special Purpose Vehicle to manage innovation infrastructure – a collaboration between Staffordshire University, Keele University, North Staffordshire Chamber of Commerce, Keele University Business and Science Park, to undertake shared services and collaborative bidding for innovation support funding for Stoke on Trent and Staffordshire Local Enterprise Partnership. 
  • Easy Access Innovation – a collaboration between the University of Bristol, King’s College London and the University of Glasgow, as a good example of both working in partnership and the desire to identify methods and techniques that simplify and accelerate the transfer of knowledge to partners.

Sir Alan Langlands, HEFCE Chief Executive said:

‘Reading the PACEC report we see a sector that is dynamic and rising to the challenges of new funding arrangements in higher education, changes in the way that economic development is organised, and the evolving needs of industrial partners. I particularly welcome the additional information provided in the report on the increased efficiency and effectiveness of knowledge exchange, with every £1 of HEIF leveraging £6 in external income; and with 80 per cent of institutions taking steps to improve their performance further. This is a sector rising to the challenges of economic recovery and growth by taking an integrated approach to the creation, dissemination and application of knowledge.’

 Tomas Ulrichsen, PACEC lead author of the report said:

‘Governments around the world are investing in universities as a way to drive innovation-led economic growth and the development of a knowledge-driven economy. However, people often overlook many of the diverse mechanisms through which this occurs. In this report, we have tried to improve the conceptual model for understanding the full contribution made by the HE sector to innovation and economic development, and to back that up with evidence of real practice from universities on the ground. It is clear that universities are becoming increasingly direct partners in the innovation process as well as working to create a more fertile environment for innovation in the economy.’

 Will Hutton, Chair, Big Innovation Centre, said:

‘We need innovation-led growth in the UK, and the Big Innovation Centre is committed to making this happen, working with businesses and universities. We are pleased to be able to provide a forum for discussion to celebrate universities’ contribution to economic growth – but also to prompt debate on what more we could all do.’


  1. Today’s event at the Big Innovation Centre (an initiative of The Work Foundation and Lancaster University) focuses on innovation and HE’s contribution to economic growth. The event will involve representatives from BIS, industry, RCUK, the Technology Strategy Board, universities and policy makers.
  2. The report is published on the Public and Corporate Economic Consultants (PACEC) web-site.
  3. HEFCE provides £150 million per annum HEIF funding for knowledge exchange to support and develop a broad range of knowledge-based interactions between universities and colleges and the wider world, which result in economic and social benefit to the UK.

    Allocations for academic years 2011-12 to 2014-15 are performance based, and institutions are eligible to receive an allocation if they exceed a £250,000 allocation threshold related to their external income earnings and performance of the sector overall. Final funding allocations for this period and a request for institutional knowledge exchange strategies were published in May 2011 and assessed by PACEC over the summer of 2011. Strategies are available.  
  4. The membership of the expert group was: Simon Brown, Enterprise Educator & Employability Consultant; Alice Frost, Head of Knowledge Exchange & Skills Policy, HEFCE; Karen Lewis, Head, Knowledge Exchange and Commercialisation Unit at BBSRC; Emily Nott, Research Base Liaison Manager, Technology Strategy Board; Carolyn Reeve, Head of Policy for University Research and Knowledge Exchange, BIS; Malcolm Skingle, Academic Liaison Director, GlaskoSmithKline; David Sweeney, Director Research, Innovation & Skills, HEFCE; Sam White, Policy Advisor, Research Funding Unit, BIS. HEFCE would like to take this opportunity to thank members for their time and enthusiastic discussions in agreeing commendations and comments on the PACEC report.
  5. Commendations for good practice do not confer a monetary reward. However, the commended strategies will be used prominently in dissemination of knowledge exchange practice and policy. The specific citations for good practice agreed by the expert group for each commended university are:

Cranfield University

For its work towards creating an ‘innovation habitat’ with strong links to the HEI; for its efforts to make it easier for firms to ‘do business with’ Cranfield; for its approach to strategic collaboration involving a much deeper understanding of the needs of their partners; and for its efforts to increase the value for money of investments through a mix of continuous reviews of effectiveness/efficiency, outsourcing and streamlining. 

University of Exeter

For its commitment to open innovation; for creating a suite of vouchers for partners at different points in the relationship process (Link Vouchers to support development of new links with industrial partners; Innovation Vouchers for feasibility studies and shorter projects to build relationships; Partnership Schemes to promote the development of strategic partnerships); and for its Research and Knowledge Transfer Service receiving ISO9001 accreditation. 

University of Hertfordshire

For engaging with small/medium sized enterprises (SMEs): building on successful learning from its Knowledge Transfer Partnership (KTP) experiences to launch the Knowledge for Business scheme which can be flexibly applied to many types of business; for its launch of an in-house innovation voucher programme to engage with small enterprises; and for its use of impact case studies as light-touch audit to identify areas of research and further KE potential to promote to partners and other stakeholders. 

University of Manchester

For its support for student employability and enterprise through the Manchester Leadership Programme, Manchester Graduate Internship Programme, and the Manchester Enterprise Centre. 

Newcastle University

For its commitment to building its Professors of Practice scheme that brings industrial experts into the academic sphere; for exploitation of its own infrastructure to demonstrate the viability of technologies with the aim of attracting inward investment to the region. 

University of Oxford

For its strength in balancing the demands of knowledge exchange with the research, teaching and wider community roles of a global research powerhouse; for its engagement of students in knowledge exchange through the Oxford Student Consultancy to support employability/enterprise; for its continued development of ISIS Innovation and its commitment to working with others to develop and disseminate good practice both within UK and abroad; for its continued strategic development of Begbroke Science Park to bring companies into close contact with HEI; for its use of HEIF funds to stimulate creative thinking on how to best engage in KE; and for the Oxford Research and Development initiative to identify best practice and sources of efficiencies gains in KE. 

Staffordshire University

For its contributions to local economic development through its innovative collaboration with Keele University, North Staffordshire Chamber of Commerce, Keele University Business and Science Park to create a Special Purpose Vehicle to manage and direct their complement of innovation infrastructure targeting local high growth SMEs; for its efforts to strength the success of the commercialisation process with Commercial Edge and the Venture Panel.