The HEFCE Grant Letter

BIS have published their annual grant letter to HEFCE. This letter sets out not just the sums of money to be distributed by the Council, but also gives (increasingly precise) policy guidance about how those funds should be spent.

There are rarely great surprises in this letter, and this year is no real exception. That doesn't mean that there are no points worth noting. Consider

This letter confirms that our priorities for teaching funding remain unchanged and include:

• The additional costs of high-cost subjects at undergraduate and postgraduate levels including, but not limited to, medicine, science, engineering and agriculture;
• Those subjects which are strategically important and vulnerable and require support to avoid undesirable reductions in the scale of provision;
• The additional costs associated with attracting and retaining students from non-traditional backgrounds, and disabled students, including the funding the Council provides to support widening participation and retention;
• The additional costs of high-cost specialist institutions, such as arts institutions, some of which are relatively small;
• Services which support the whole higher education sector, such as the Joint Information Systems Committee, the Higher Education Academy and the Quality Assurance Agency;
• Costs associated with the transition to the new funding arrangements; and
• Funding to support institutions’ knowledge exchange activities and their engagement with business and the community through the Higher Education Innovation Fund (HEIF).

Change in these priorities, especially WP and retention funding, was widely expected.

You should also bear in mind that, for budgetary reasons, the Government does not expect to see any increase in the average length of undergraduate or post-graduate taught courses.

is also surprising. Currently HEFCE has no control over this issue although controls could possibly be put in place. I'm also unclear what impact the average length of postgraduate courses has on the Government's budget (longer UG courses obviously mean more fee loans).

You should continue to take forward funding both for research and for support for the next generation of researchers, by selectively funding on the basis of only internationally excellent research, and protecting funding leveraged from external sources such as the charitable and business sectors.

is another restatement of current policy where a shift to greater concentration of research funding was predicted by many, but it turns out that concentration will be achieved under another name:

On research, you should deliver efficiency savings from Quality Related (QR) recurrent research funding of £45 million in 2012-13, £73 million in 2013-14 and £104 million in 2014-15 to be reinvested within QR....In achieving these efficiencies you should encourage HEIs to collaborate for example through greater sharing of research equipment and infrastructure.

I will lay money that these efficiency savings will be achieved neither (a) by allocating more funding to the institutions with the best proportion of QR to research grant and contract nor (b) by allocating funds to 'spoke' institutions so that they can procure appropriate services from 'hubs'.

Due to over-recruitment HEFCE is being given a budget cut of £62 million, taken partly from unallocated voluntary giving match (which no-one will miss), and partly from Access to Learning Fund, which will be missed by many.

The 12/13 Student Number Control will be reduced by a further 5,000 as HEFCE have already announced.

David Willetts has just missed another opportunity to deny that the HE Bill has been delayed so it is worth stressing that the HEFCE budget remains very substantial: £5,402 million of recurrent grant in 2012/13 and £4,456 (provisional) in 2013/14. HEFCE can continue to control the institutions for a while yet - and HEFCE can keep control of the research-led ones indefinitely, even with current powers. My view is that the private providers are not coming into the market in any quantity, perhaps due to the continued regulatory uncertainty (it can't be for lack of profits given the average fees in England now). The Government can afford to delay the Bill for a while.