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The grant letter (note 1) confirms government funding for HEFCE and for higher education for the third year of the new financial arrangements for higher education in England. It also sets out indicative allocations for financial year 2015-16.

The settlement will mean reductions in HEFCE funding for higher education institutions in 2014-15 and again in 2015-16 beyond those accounted for by the switch to publicly funded tuition fees. The Government has asked HEFCE to deliver the reductions in ways which protect as far as possible high-cost subjects (including STEM), widening participation (which is funded via the HEFCE Student Opportunity allocation), and small and specialist institutions.

HEFCE is asked to continue its work with the Research Councils and others to support internationally excellent research and the delivery of the impact agenda through the dual-support framework. The ring-fenced settlement for science and research means that recurrent funding is maintained at £1,573 million, the same cash levels as 2013-14.

Overall, the amount of capital funding for teaching and research will increase in 2014-15 to £440 million.

The grant letter confirms the Government’s provision of a maximum of 30,000 additional student places in academic year 2014-15 for HEFCE-funded institutions. The student number control will be removed entirely from 2015-16, and the Government has asked HEFCE to ensure that higher education institutions maintain the quality of the student experience in these circumstances.

The HEFCE Board will consider the grant letter at an extraordinary Board meeting on 25 February. We plan to publish institutional funding allocations on 27 March 2014.

Tim Melville-Ross, Chair of HEFCE's Board, said:

‘At a time of considerable pressure on public finances, the funding settlement for 2014-15 and the indicative allocation for 2015-16 incorporate significant reductions. Nevertheless, the Government continues to recognise the key contribution that higher education makes to the economy and society. We will work to implement the settlement in as fair and sensible a way as possible.’

Notes

  1. HEFCE's annual grant letter from the Department for Business, Innovation and Skills (BIS) sets out HEFCE's allocations for funding higher education for financial year 2014. All HEFCE's annual grant letters can be read on the HEFCE web-site.
  2. Annex 2 to the grant letter shows that HEFCE will have a total of £4,091 million to distribute for the 2014-15 financial year.
  3. Annex 2 also sets out funding for higher education across recurrent and capital funding for education and research.  
  4. The Higher Education Funding Council for England (HEFCE) distributes public money for teaching, research, knowledge exchange and related activities.