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Dear Principal

1.   This letter sets out the allocation of capital funding for learning and teaching infrastructure in further education colleges (FECs) funded directly by HEFCE for the financial years 2011-12 and 2012-13. No action is required in response.

2.   A total of £6.3 million is available for the two years to fund activity undertaken from April 2011 until March 2013. This amount includes the reinstatement of budget reductions of £3.8 million that were announced in HEFCE Circular letters 02/2010 and 14/2010. These funds will be paid automatically in instalments in May, August, November and February of each year. We will advise institutions of the profile of payments in due course.

3.   Funding of £3.3 million within the total of £6.3 million, to be paid in the financial year 2012-13, is indicative, as this is subject to confirmation in a future grant letter.

Purpose of the funds

4.   These allocations of capital funding are to help raise the quality of higher education (HE) learning and teaching facilities in FECs, in order to enhance the learning experience of their HE students. We expect colleges to use the funds in ways that will support their strategy for HE most effectively. The funds may be used to contribute towards:

  • investment in equipment, particularly IT-related equipment, used in learning and teaching, and in e-learning
  • replacement of premises for learning and teaching
  • refurbishment of existing teaching spaces, particularly with regard to IT-related enhancements, including improvements to internal IT networks or supporting infrastructure.

5.   The funds should be used for HE provision, and may be subject to audit in the normal way. We recognise, however, that it may be neither feasible nor desirable to create ring-fenced boundaries between higher and further education (FE). For example, equipment purchased using these funds may be used by both HE and FE students. So we look to colleges to adopt a pragmatic approach, whereby the primary focus of the projects is on HE even if there are links with, and spin-off benefits at the margin for, FE.

Eligibility and allocation method

6.   This is not a competitive bidding process. All directly funded FECs that meet the conditions in paragraphs 8 and 9 will receive an allocation.

7.   As with previous allocations of capital funds to colleges, we have a formula method for distributing funds that is consistent with our wider policies for funding FECs. These aim to encourage collaboration between institutions, while supporting diversity of provision. We want to discourage small, isolated pockets of HE, and to help strengthen HE portfolios in the larger HE providers and where there are networks between HE providers.

Allocations and payment of funds

8.   The allocations for each directly funded FEC are at Annex A. They are based on:

  • 2010-11 standard teaching resource for mainstream provisionsee note&1
  • 2010-11 Training and Development Agency for Schools initial teacher training resource
  • 2010-11 widening participation allocations
  • 2010-11 improving retention allocationssee note&2
  • 2010-11 research-informed teaching allocations
  • 2010-11 institutional learning and teaching strategiessee note&3
  • 2010-11 targeted allocations for part-time undergraduates, accelerated/intensive provision and maintaining capacity in SIVS following ELQ policysee note&3

9.   The total amount per FEC has been weighted according to the size of the college, based on 2010-11 full-time equivalent (FTE) higher education students. FECs with 800 or more directly funded HE FTE students will receive twice the rate of funds per FTE that are allocated to colleges with fewer than 800 FTEs. Colleges with fewer than 100 directly funded HE FTE students can access the funds allocated in Annex A, provided that they are developing their HE activity in collaboration with other FECs and/or higher education institutions so that the aggregate HE provision is at least 100 FTE places. We have set a threshold of £1,000 as the minimum for any college.

10.   We shall request information from colleges on how the funds have been used via a monitoring return for the full two years' funding, in April 2013. These returns may be subject to audit. In the event that we are not satisfied that the funds have been used for the purposes described in paragraph 4 we may seek to reclaim some or all of the funding provided.

11.   We expect colleges to take account of the need to reduce carbon emissions – as well as securing value for money – in making decisions about how these funds are spent.

Yours sincerely

Sir Alan Langlands
Chief Executive


  1. The grant element of standard resource was adjusted for the June 2010 and January 2011 pro rata savings of 1.08868 per cent and 2.81095 per cent respectively
  2. Adjusted for the June 2010 pro rata saving
  3. Adjusted for the June 2010 and January 2011 pro rata savings

Date: 17 March 2011

Ref: Circular letter 10/2011

To: Heads of HEFCE-funded further education colleges

Enquiries should be directed to:

HEFCE higher education policy advisers