Changes to OfS teaching grants prioritise ‘high-value’ subjects

Education secretary Gavin Williamson has instructed the OfS to remove London weightings in teaching grant funding

Thirty-seven ‘lower-tariff’ universities will, on average, next year see a six percentage point reduction in higher education teaching grant funding, according to estimates from the Department for Education (DfE).

In a letter to the Office for Students, education secretary Gavin Williamson set out his spending priorities for the forthcoming financial year – including changes to the teaching grant, boosts for student hardship and mental health projects and cuts to Uni Connect.

The letter comes as the DfE releases an interim response to the Augar report.

Last year, the OfS distributed £1.276 billion in recurrent teaching grants and on facilities and regulation initiatives – next year, that figure will reach £1.287 billion. The overall teaching grant, which amounts to £1.4 billion, will remain, effectively, frozen.

High-cost, high-value subjects, such as medicine, engineering and other STEM subjects, will gain increased T-Grant funding (renamed the strategic priorities grant) next year. Based on indicative figures, those high-value, high-cost subjects identified will receive £85m more from this September, bringing total spending to £735m.

Other high-cost subjects (performing arts, creative arts, media studies and archaeology) will have SPG funding cut by 50% – with further reductions sought in future years. These subjects, awarded £40m this academic year, would see funding fall to £20m.

This is a result of changes to the course level classifications. C1 subjects, the third most expensive to provide, will be divided into two sub-sects: C1, including information technology, and C3, including high-cost subjects such as performing arts and media studies.

According to DfE estimates, 27 higher tariff providers, likely to be Russell Group members, will on average gain £0.7m each in T-Grant funding. On average, 37 lower-tariff universities will each lose approximately £0.3m (-6%). Some providers will gain as much as 11%, the DfE letter adds.

Around 7% of Russell Group students are enrolled on courses to be classified as C3 – whereas 14% of students at low-tariff providers are enrolled on these types of courses. The majority of students at some specialist providers, like art and music colleges, will be enrolled on these C3 courses. “World-leading” specialist providers – with national “cultural value” – are set to receive a £10m boost this year, the DfE confirmed yesterday, but is unclear the impact these changes will have on the financial stability of providers.

The DfE told the OfS to remove London weighting as it sought to “level-up” funding to universities in deprived parts of the UK. This will reduce T-Grant funding by 13.7% in the capital, the DfE predicts.

Uni Connect has established 29 regional partnerships, comprising universities, colleges, employers and local providers, to undertake outreach with young people in areas of low HE participation.

Although described as a success, the DfE now thinks it is better to direct funding to support “targeted activities to fulfil specific policy objectives”. The £20m saved from Uni Connect will be spent on student hardship funds (£5m) and student mental health projects (£15m).

Specialist performing and creative arts providers will receive more funding next year, representing a collective £10m boost.

Capital bidding processes are to change, and the OfS was instructed to prioritise “high-cost subjects of strategic importance”, and providers in “less prosperous parts of England” that are prioritising “modular, part-time and flexible provision”.

Read more: Freedom of speech: vice-chancellors must defend ‘diversity of perspective’, says OfS chair

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