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Executive summary

Purpose

1. This document summarises our provisional allocations to institutions of recurrent funding for the academic year 2017-18.

Key points

2. The overall grant we will distribute for the 2017-18 academic year is £3,536 million, comprising:

  • £1,595 million for recurrent research grant
  • £1,320 million for recurrent teaching grant
  • £160 million for knowledge exchange
  • £93 million for national facilities and initiatives
  • £353 million for capital funding
  • £14 million for other non-recurrent initiatives (Degree Apprenticeships Development Fund and the Institute of Coding).

3. The Board agreed these 2017-18 academic year budgets on the assumption that the indicative funding available for the 2018-19 financial year will be confirmed. As usual, any future changes to the grant made available to us by Government could affect the funding we are able to distribute to institutions in the 2017-18 academic year, and this may include revising allocations after they have already been announced. Accordingly, institutions should plan their budgets prudently.

4. In the Spending Review and Autumn Statement 2015, the Government announced that it would reduce our teaching grant by £120 million in cash terms by the 2019-20 financial year, but allow funding for high-cost subjects to be protected in real terms. It also asked us to retarget and reduce by up to half the funding previously provided for student opportunity. These priorities have been reflected in our teaching allocations for the 2017-18 academic year:

  1. Total teaching grant is reduced by £40 million compared with 2016-17.
  2. For 2017-18, students starting undergraduate courses that on successful completion lead to first registration as a professional in nursing, midwifery and certain allied health professions (pre-registration courses) will be supported through the higher education finance system, including access to student loans. As a result of the transfer of funding responsibility, HEFCE has £32 million to support these courses in 2017-18 for the first entry cohort of students under the new finance arrangements.
  3. We are maintaining in real terms the total teaching grant budgets for our main high‑cost subject allocation, before the addition of £16 million required for undergraduate pre-registration courses in nursing, midwifery and allied health professions.
  4. We have discontinued the formula-based widening access targeted allocation (£54 million in 2016-17), and are supporting investment in this area solely through the national collaborative outreach programme, which has increased by £30 million to £60 million.
  5. We have developed our funding methods for full-time and part-time student premiums and the disabled students’ premium following consultation in 2016. We have doubled our funding (to £40 million in 2016-17 and 2017-18 compared with £20 million in 2015-16) to support students with disabilities, in particular to support institutions to meet the rapid increase in the numbers of students reporting mental health problems. While the part-time students’ premium has been maintained in cash terms, the total distributed through the full-time student premium has reduced by £20 million.
  6. We are continuing to phase out funding for old-regime students (those who started their studies before 1 September 2012). The supplement for old‑regime students has reduced by £23 million to £14 million in 2017-18, its final year.

5. We are increasing by £17 million the 2017-18 budget for mainstream quality-related research (QR) and its London weighting to a total of £1,087 million. The other streams within recurrent research funding are maintained in cash terms at the same level as for 2016‑17. While research funding methods are largely the same as for previous years, there are a small number of technical changes for 2017-18.

6. Funding for knowledge exchange has been maintained in cash terms at £160 million. We have developed our funding method following review in 2016.

Action required

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

Date: 9 June 2017

Ref: 2017/05

To: Heads of HEFCE-funded further education colleges, Heads of HEFCE-funded higher education institutions

Of interest to those
responsible for:

Finance, Planning

Enquiries should be directed to:

HEFCE institutional teams (contact details at www.hefce.ac.uk/contact/search/) or email recurrentgrant@hefce.ac.uk.