HEFCE grant letter – good or bad?

The higher education sector has responded in force to the government’s grant letter for funding in England

By Tim Cox

In early March, the Secretary of State for Business, Innovation and Skills (BIS) and the Minister for Universities and Science released the Higher Education Funding Council (HEFCE) grant letter for funding for higher education in England 2016-17.

The grant letter confirmed funding of £3.7bn, including capital funding of £478m for HEFCE and for higher education and sets out the following Government priorities and funding allocation for the coming year with regards to teaching and research:


         •        HEFCE to protect in real terms the total amount of funding for STEM and other high cost subjects, as announced in last year’s Autumn Statement

         •        HEFCE to target Student Opportunity funding to support the Prime Minister’s participation goals for students from disadvantaged backgrounds, in particular in geographical areas with lower than expected participation levels. HEFCE is also asked to focus on institutions recruiting the highest proportions of at risk students from disadvantaged backgrounds

         •        HEFCE to take responsibility for implementing the second year of the Teaching Excellence Framework (TEF)


         •        The Government reaffirms its commitment to the dual support system and emphasises the importance of quality-related research funding in supporting sustainable economic growth

         •        HEFCE to work with the sector and other HE funding bodies to support and engage with the work of the Stern Review of the Research Excellence Framework (REF), and to take account of outcomes in developing proposals for the next REF, to be completed by end of 2021

         •        A further £400m to be allocated via the UK Research Partnership Investment Fund (UKRPIF) through to 2021

In addition to this, the grant letter states HEFCE will maintain Higher Education Innovation Fund (HEIF) allocations at current levels, and asks HEFCE to work with the Government, students and the sector on a range of other aspects of higher education reform, including: 

         •        A review of teaching funding

         •        Supporting BIS implementing the new postgraduate masters loan scheme and assisting on the design of the doctoral loan scheme

         •        Working with Universities UK and the sector to implement the recommendations of the Diamond efficiency reviews

In response to the letter, Dr Wendy Piatt, Director-General of the Russell Group said that the Government’s decision to maintain the science and research budget was “a positive step” and that HEIF allocations staying at current levels was “encouraging” as HEIF results in a six-fold return. She added: “[We] appreciate the Government’s recognition of properly funding high-cost STEM subjects with the overall budget for these increasing in real terms. However, the benefits of this will soon be eroded if more students take them up leading to cuts per student.”

Dr Platt also had some concerns on how the TEF would be able to assess teaching fairly, commenting: ‘Not all university disciplines require the same teaching methods. Some subjects, for example Medicine, require a high number of contact hours, but the same approach simply wouldn’t be appropriate for students in many arts and humanities subjects.“

The response from the Chief Executive of the University Alliance, Maddalaine Ansell, was broadly positive. She supported the decision to maintain the HEIF and QR funding for the dual support system, however she went on to say: ‘It is crucial that adequate provision is made for student nurses, midwives and allied health professionals in light of the changes the government has made in this area.”

She continued: ‘There are real concerns that halving Student Opportunity Funding will make it far more difficult to meet the Prime Minister’s ambitious targets on widening participation, therefore we are pleased that the remaining allocation will be targeted at institutions which do the heavy lifting on both access and retention.’ 

A copy of the original grant letter can be found on the HEFCE website. Universities UK has provided further analysis of the HEFCE grant letter on their Blog.

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