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Dear Vice-Chancellor or Principal

1.   This circular letter sets out our arrangements for notifying institutions of limits on the number of students starting HEFCE-fundable or employer co-funded full-time (FT) undergraduate (UG) or postgraduate/professional graduate certificate in education (PGCE) studies in 2011-12. No action is required in response.

2.   Our grant letter from the Department for Business, Innovation and Skills (BIS) of 20 December 2010 stated:

'For 2011/12 we must ask you to keep in place your mechanisms to minimise and preferably eliminate over-recruitment. Any over-recruitment in the coming year could result in a transfer of HEFCE grant back to this Department in that or future years, in order to meet the consequent unanticipated student support costs.' (paragraph 15)

3.   We will therefore again set student number control limits for each institution for 2011-12. The population covered by the control will be the same as for 2010-11 (subject to an updating of the academic years concerned). If institutions exceed their limit, they will be subject to a reduction in grant, calculated at a rate of £3,750 for each student above the limit, or such other rate as may be specified by BIS. This grant reduction may be applied in 2011-12 and each subsequent year for which we estimate the excess student numbers will continue their studies.

4.   The baseline for the 2011-12 student number control limit will be calculated as:

  • the 2010-11 limit
  • minus 2010-11 FT UG places awarded through the University Modernisation Fund (UMF): as previously notified, these additional places were allocated for 2010-11 only
  • plus 2011-12 fully funded and employer co-funded FT UG additional student number (ASN) allocations to which we are already committed from previous ASN exercises
  • plus positive or negative adjustments for transfers of FT UG or PGCE students between institutions for 2010-11 or 2011-12.

5.   The December grant letter from BIS explains that entrant places for 2011-12 should be maintained at the level that applied in 2010-11. Our calculation of the baseline for 2011-12 set out in the previous paragraph results in some reduction at the sector level compared to 2010-11, because of the deduction of the 8,400 FT UG places awarded through the UMF, which is only slightly offset by the small number of FT UG ASNs to which we are committed for 2011-12. Our Board will therefore decide at its meeting on 28 January how any residual places should be distributed. Shortly after that Board meeting we will announce provisional student number control limits in letters to institutions; those letters will set out the approach on distributing the residual places and the process for institutions wishing to appeal for a change to their provisional limit.

6.   In addition, where we are reducing funding for institutions for over-recruiting FT UG and PGCE entrants in 2010-11, those adjustments may be repeated, in whole or part, in subsequent years unless the institutions concerned take action to offset the over-recruitment in 2010-11 by recruiting below their 2011-12 student number control limit. Our approach on this will be similar to that adopted for 2010-11, set out in paragraph 64 of 'HEFCE grant adjustments 2010-11' (HEFCE 2010/22).

7.   The grant letter from BIS does not state what measures might be required from 2012-13 to reduce the risk that student support costs exceed the Government's planned budgets. (We anticipate that more information on this will be provided in the forthcoming higher education White Paper.) In the meantime, institutions should assume that there will be no advantage to be gained in 2012-13 onwards from over-recruiting in 2011-12. The BIS grant letter also states that, as a provisional planning assumption, universities and colleges should work on the basis that 10,000 entrant places for 2011-12 are temporary and will not be repeated in 2012-13.

Yours sincerely

Sir Alan Langlands
Chief Executive

Date: 14 January 2011

Ref: Circular letter 02/2011

To: Heads of HEFCE-funded higher education institutions, Heads of universities in Northern Ireland

Of interest to those
responsible for:

Planning, Finance

Enquiries should be directed to:

HEFCE institutional teams