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Dear Principal

Capital funding for directly funded further education colleges: 2013-14

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 year 2013-14. No action is required in response.

2. A total of £2 million is available to fund activity undertaken from April 2013 until March 2014. These funds will be paid automatically in three instalments in August 2013, November 2013 and February 2014.

Purpose of the funds

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

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

4. 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 HE and further education (FE). For example, equipment purchased using these funds may be used by both HE and FE students. 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 marginal spin-off benefits for, FE.

5. We expect colleges to take account of the need to reduce carbon emissions as well as securing value for money in deciding how these funds are spent.

Eligibility and allocation method

6. This is not a competitive bidding process. 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

7. The allocations for each directly funded FEC are listed at Annex A. For those colleges for who we had funding agreements prior to August 2012, the allocations are based on:

  • 2011-12 standard teaching resource for mainstream provision
  • 2011-12 Training and Development Agency for Schools initial teacher training resource
  • 2011-12 widening participation allocations
  • 2011-12 improving retention allocations
  • 2011-12 research-informed teaching allocations
  • 2011-12 institutional learning and teaching strategies
  • 2011-12 targeted allocations for part-time undergraduates, accelerated or intensive provision, and maintaining capacity in strategically important and vulnerable subjects following the equivalent or lower qualification policy.

(Note that resource calculations have not been increased or decreased to take into account the impact of any transfer of provision since 2011-12.)

8. For those colleges where new funding agreements have been established from 2012-13 (except in a few cases to reflect mergers, de-mergers or other exceptional circumstances), the allocation for each college is based on a sum of £31.56 per annum per full-time equivalent student (FTE) in the 2012 Higher Education in Further Education: Students survey 2012 Tables 1 to 3.

9. For those colleges where new funding agreements have been established from 2013-14, the allocation for each college is based on a sum of £31.56 per annum per FTE place awarded through the margin.

10. The total amount per FEC has been weighted according to the size of the college. FECs with 800 or more directly funded FTE HE students will receive twice the rate of funds per FTE as are allocated to colleges with fewer than 800 FTEs. Colleges with fewer than 100 directly funded FTE HE students can access the funds allocated in Annex A, provided that they are developing their HE activity in collaboration with other FECs,  higher education institutions or both 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.

11. In April 2014 we shall request information from colleges on how the funds have been used, via a monitoring return. These returns may be subject to audit. If we are not satisfied that the funds have been used for the purposes described in paragraph 3, we may seek to reclaim some or all of the funding provided.

Yours sincerely

Sir Alan Langlands

Chief Executive

Date: 3 May 2013

Ref: Circular letter 09/2013

To: Heads of HEFCE-funded further education colleges

Of interest to those
responsible for:

Finance, Estates, Information technology

Enquiries should be directed to:

Donna Iafrati, tel 0117 931 7357, e-mail