Recurrent grants for 2007-08

This document summarises our provisional allocations of recurrent funding to institutions for the academic year 2007-08. Final allocations will be announced in July 2007.

To:	Heads of HEFCE-funded higher education institutions Heads of HEFCE-funded further education colleges Heads of universities in Northern Ireland
Of interest to those responsible for:	Finance, Planning
Reference:	2007/06
Publication date:	March 2007
Enquiries to:	HEFCE higher education advisers

Executive summary (read online)

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Table 1 Recurrent grant for academic year 2007-08
Table 2 Comparison with 2006-07 academic year recurrent grant

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Table 3 Special funding and earmarked capital allocations for 2007-08

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Executive summary

Purpose

1. This document summarises our provisional allocations of recurrent funding to institutions for the academic year 2007-08.

Key points

2. The total HEFCE grant available for the 2007-08 academic year is £7,137 million. This represents an overall cash increase of 6.4 per cent compared with 2006-07. The total includes recurrent funding of £4,510 million for teaching (of which £354 million is for widening participation), and £1,415 million for research. In addition, we are providing a further £738 million for earmarked capital grants, £449 million for special funding, and £25 million additional funding for very high cost and vulnerable science subjects.

3. The institutional allocations for teaching and research announced in this publication show an average 5.3 per cent increase in recurrent grant for the sector. If funding for additional student numbers is excluded, the average increase is 3.1 per cent, a real-terms increase in funding for the sector as a whole. None of the increases referred to in this document take account of the additional fee income in 2007-08 that is expected following the introduction of variable fees for full-time undergraduates. Our recurrent grant allocations therefore provide stability and some financial security while the more dynamic environment created by the 2004 Higher Education Act is introduced.

4. There are substantial increases in funding for research, in keeping with the Government's commitment to enhancing the research base through both sides of the dual support system.

5. We have provided a full uplift for inflation to the main teaching grant allocation for each institution. Many institutions have also gained significant additional funded student numbers. The total funding for widening participation is also being increased for inflation.

6. Funding for earmarked capital has increased by 4.8 per cent compared with last year. The distribution of this funding between institutions has been announced separately and is not included in this document (paragraphs 50 and 51 provide further information).

Teaching

7. The total recurrent funding for teaching that is available has increased by 7.2 per cent over the equivalent figures for 2006-07. This has allowed us to provide for a significant number of additional full-time equivalent (FTE) student places, while providing an uplift for inflation to teaching grant, including widening participation. We have made commitments for approximately 33,000 FTE additional funded places for 2007-08, and will shortly allocate a further 16,000 FTE across the two academic years 2007-08 and 2008-09. The overall rate of grant per FTE student for teaching has increased in cash terms by 2.75 per cent compared with 2006-07.

8. The total of £4,510 million for teaching includes the following:

£354 million to support widening participation for students from under-represented groups or who are at greatest risk of not completing their studies.
£176 million for additional funded places awarded mainly through our initiatives for managed and strategic growth, or through earlier exercises to distribute additional student numbers.
£11 million for increases in medical and dental student numbers.

Research

9. A total of £1,415 million is allocated for research. This is an increase of 5.4 per cent compared with the equivalent funding for 2006-07. Within this overall increase we have:

Established a business research element within quality-related research (QR).
Increased the total of the QR charity support fund to £180 million.
Increased the average rate of grant by 4.9 per cent for departments rated 4, 5 and 5* in the 2001 Research Assessment Exercise (RAE). This takes account of all the main recurrent elements of QR with the exception of the new business research element.
Maintained in real terms the total recurrent funds for research degree programmes (RDPs).

Moderation of teaching and research

10. We have continued our policy of phasing in changes by moderating the allocations. In general, institutions will receive an increase in resource (teaching and research grant, plus regulated fee income) of at least 2 per cent, compared with the equivalent unmoderated figure for 2006-07.

Special funding and earmarked capital

11. Funding for earmarked capital has increased by 4.8 per cent compared with last year. Special funding has increased by 3.9 per cent, but continues to represent a declining proportion of our total budget.

Action required

12. No action is required in response to this document.

March 2007/06 Core funding/operations Allocation of funds

This report is for information