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HEFCE closed at the end of March 2018. The information on this website is historical and is no longer maintained.

Many of HEFCE's functions will be continued by the Office for Students, the new regulator of higher education in England, and Research England, the new council within UK Research and Innovation.

The HEFCE domain - - will continue to function until September 2018. At this point we will close the site entirely and all its information will only be available from the National Web Archive.


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Executive summary


1. This document summarises our provisional allocations to institutions of recurrent funding for teaching and research, and transitional research allocations, for the academic year 2015‑16.

Key points

2. The overall grant we will distribute for the 2015-16 academic year is £3,971 million, comprising:

  • £1,558 million for recurrent research grant
  • £1,418 million for recurrent teaching grant
  • £160 million for knowledge exchange
  • £52 million for transitional research allocations
  • £130 million for national facilities and initiatives
  • £603 million for capital funding
  • £50 million for the Postgraduate Support Scheme.

3. The Board agreed these 2015-16 academic year budgets, assuming that the funding available for the 2016‑17 financial year (for which we have no indicative allocations) will be the same in cash terms as for the 2015-16 financial year. There is, however, particular uncertainty about the funding that may be available after the spending review that is expected to follow the forthcoming general election. This means that any subsequent changes to the funding available to us from Government for 2015-16, or that we have assumed for 2016-17, are likely to affect the funding we are able to distribute to institutions in the 2015-16 academic year. This may include revising allocations after they have already been announced. Accordingly, institutions should plan their budgets prudently.

4. The 2015-16 academic year is the first in which research accounts for a greater proportion of recurrent grant than teaching, and the first year of research funding informed by the results of the 2014 Research Excellence Framework (REF). Given the changes to the underlying data from REF 2014, compared to the 2008 Research Assessment Exercise (RAE), in particular the significant increase in research volume counted for funding, we have reviewed aspects of the research funding method for 2015-16 so as to maintain the policy approach of the current spending review period. While the total we have available to allocate for recurrent research funding remains constant, we are making two one-off transitional research allocations for 2015‑16, totalling £52 million, to provide further support for research degree programme supervision and to mitigate the impact on institutions of changes in the amounts we are allocating for certain science, technology, engineering and mathematics subjects.

5. The amount of recurrent teaching grant continues to decline as a result of the progressive shift from HEFCE grants to students’ tuition fees. The reduction is substantially less than for previous years, as the transition is largely complete. Because of this, we have been able to bring to an end for 2015-16 the previous three-stage process of recalculating teaching grants that applied between 2012-13 and 2014-15. This was necessary to ensure our allocations reflected the changing mix of students who had started their courses before the new fee regime was introduced on 1 September 2012 and those who started on or after that date.

6. Our teaching funds increasingly focus on areas where costs incurred by universities and colleges cannot be met by tuition fees, or where it is in the public interest that provision receives additional support, particularly high-cost and strategically important subjects, student opportunity, and small and specialist institutions.

7. The student number control no longer applies to HEFCE-funded institutions from 2015-16. This had applied between 2010-11 and 2014-15 as a limit on the numbers of certain students starting full-time undergraduate study or a postgraduate initial teacher training course, to reduce the risk to Government of excess student support costs.

Action required

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

Date: 26 March 2015

Ref: HEFCE 2015/05

To: Heads of HEFCE-funded higher education institutions
Heads of HEFCE-funded further education and sixth form colleges

Of interest to those
responsible for:

Finance, planning

Enquiries should be directed to:

HEFCE institutional teams or email