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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 The information on this website is historical and is no longer maintained.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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Higher education institutions that are eligible for funding should complete and return Annexes A1 and A2 to HEFCE by email by noon on Monday 31 October 2016.

Executive summary


1. This document presents policies and priorities for the use of Higher Education Innovation Funding (HEIF) for 2016-17 onwards in the context of the Government’s long-term commitment to knowledge exchange (KE) and government priorities, and HEFCE strategic objectives. It also:

  • invites HEFCE-funded higher education institutions (HEIs) with previously notified 2016-17 HEIF allocations to submit institutional five-year KE strategies from 2016-17, as the basis for release of future allocations
  • summarises details of current policy for knowledge exchange and the HEIF method
  • introduces a change to the HEIF method: annual HEIF allocations, with an annual modifier which provides a planning assumption for institutions to draw up long-term KE strategies
  • outlines our future approaches to monitoring.

2. HEIF is designed to support the range of knowledge exchange activities that result in economic and social impact. The funding provides incentives for HEIs to work with businesses, public and third sector organisations, community bodies and the wider public. Activity that can help the country’s economic growth and productivity is currently a high priority.

Key points

3. HEIF is supported from ring-fenced government science and research funding and from HEFCE funding, reflecting that knowledge exchange is linked with research and teaching. The Government has confirmed its commitment to long-term support of KE in the context of the 2015 Spending Review, the HEIF method, and strategies processes. The Government intends that the HEFCE KE policy function will become part of Research England, in UK Research and Innovation (UKRI), but that KE will be an area of joint working between UKRI and the Office for Students (OfS).

4. Eligible English HEIs were allocated a total of £160 million for August 2016 to July 2017. As previously notified allocations for 2016-17 are given in Annex A of ‘Recurrent grants for 2016-17’ (HEFCE 2016/09). Full allocations, including top-ups with HEIF qualifying income, are at under ‘HEIF qualifying income’.

5. We invite HEIs with 2016-17 allocations to submit five-year KE strategies. Future, annual, HEIF allocations are dependent on our acceptance of strategies.

6. We will continue to use the current method of allocating HEIF, but will implement a new approach of annual allocations to HEIs, based on latest data, to reward up-to-date performance. This will be coupled with an annual modifier to provide some predictability in allocations: no HEI will gain or lose more than 10 per cent of its allocation year-on-year from operation of the formula alone. Allocations to HEIs annually will vary due to changes in their performance data, the effects of the modifier, and the total sum available to allocate for HEIF.

7. HEIs will continue to have flexibility to use their HEIF allocations for the full range of knowledge exchange activities in line with the policies and priorities set out in this publication. We expect institutional strategies to be based on enduring institutional and academic capabilities, long-term partnerships, and intended outcomes and impacts and hence should not change frequently. We will ask HEIs for details of their achievements in priority areas of their strategies and use of their HEIF allocation annually in monitoring. We outline in this document our future approaches to monitoring.

Action required

8. HEIs that are eligible for funding should complete and return Annexes A1 and A2, available below. Guidance notes for their completion are at Annex B. Institutional strategies should be emailed to by noon on Monday 31 October 2016

Timetable for acceptance of institutional strategies and annual HEIF allocations

1 August 2016

Commencement of spend of 2016-17 HEIF allocations.

August 2016

This document is published, providing: policy guidance; future HEIF method change; and call for institutional five-year KE strategies.

Noon on Monday 31 October 2016

Deadline for strategies to be submitted to HEFCE.

November 2016

Data collection begins for HE-BCI survey to the Higher Education Statistics Agency (HESA).

November 2016 onwards

Expert analysis of institutional strategies conducted. HEFCE will notify each HEI on a rolling basis when their strategy is accepted.

16 December 2016

Return deadline for HE-BCI returns to HESA, checking period commences (final data following checks to be submitted to HESA by 25 January 2017).

January/February 2017

Some HEIs may be asked to clarify their strategies or to make more substantial changes in a resubmitted strategy.

Spring 2017

All eligible HEIs should have received confirmation of the approval of their strategy.

HEFCE grant letter. HEFCE Board confirms 2017-18 allocations.

Confirmation of monitoring of KE strategies and returns on use of HEIF.

Summer 2017

Overview report of strategies published with details of institutional strategies that have been commended.

Date: 1 August 2016

Ref: HEFCE 2016/16

To: Heads of HEFCE-funded higher education institutions

Of interest to those
responsible for:

Knowledge exchange; Innovation; Entrepreneurship; Interactions between higher education and business, public and third sectors; Contract and collaborative research; Continuing professional development; Community and public engagement; Local economic development; Strategic planning 

Enquiries should be directed to:

Rachel Tyrrell, tel 0117 934 7463, email