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1. HEFCE distributes government funding for higher education. This guide explains how we calculate how much each university or college gets, the principles that underpin those calculations, and the components of an institution’s grant. It also explains how we set controls for the number of students that institutions may enrol, to reduce the risk that over-recruitment could create excess costs to Government in providing student support. (Student support includes loans to meet tuition fees, and ‘maintenance’ grants and loans to support students’ living costs.)

2. This guide is intended for those working in higher education, and others who wish to understand our funding methods. It gives an introduction to those methods, but does not provide the full technical definitions and specifications used in our allocation and monitoring processes.

3. It is our practice to be open about our allocation methods and policies, and this guide is intended to explain them. It is divided into three main sections.

  1. ‘Overview’ gives a basic summary of how we distribute funding, why we do it this way and how we ensure the money is well spent. It also gives a short introduction to how we operate our student number control.
  2. Section 1, HEFCE’s funding methods, contains more detail about each funding stream, our methods and the principles behind them. However, it does not include comprehensive technical details: more information is in the further reading suggested at the end of this guide.
  3. Section 2, Conditions of funding and the student number control, contains more detail about the reasons for the control we set, the populations it covers, and the method that we use for calculating allocations for universities and colleges. It includes details of other funding conditions such as medical and dental targets.

4. Some terms are explained in ‘jargon busters’ throughout the document, and there is an explanation of terms and abbreviations at the end. 

Date: 27 March 2014

Ref: HEFCE 2014/06

To: Heads of HEFCE-funded higher education institutions, Heads of HEFCE-funded further education colleges

Of interest to those
responsible for:

Funding, finance