26th January 2012

The Secretary of State for Business, Innovation and Skills (BIS) and the Minister for Universities and Science yesterday confirmed funding allocations to the Higher Education Funding Council for England (HEFCE) for 2012-13 and the Government’s priorities for the Council for the coming year.
The grant letter confirms government funding and priorities for HEFCE and for higher education in a year when the new financial arrangements for higher education in England will be implemented. From 2012-13, universities and colleges will increasingly obtain their income for learning and teaching from publicly funded tuition fee loans. HEFCE's funding settlement reflects these new circumstances.
The letter asks HEFCE to ensure a smooth transition to the new arrangements in the interests of students and the public. It highlights HEFCE's role in supporting postgraduate students, and outlines the steps Ministers are taking to manage pressures on government budgets as a result of unanticipated student support costs.
The ring-fenced settlement for science and research means that we will be able to maintain overall funding for research at the same cash levels as for 2011-12.
We will provide further information on the distribution of the grant following the HEFCE Board meeting on 27 January. Individual institutional grants will be published on 22 March.
The Secretary of State will write again to confirm the Government’s policy on student number controls for 2013-14 and HEFCE will then consult on the implementation of this policy.
Tim Melville-Ross, Chair of HEFCE's Board, said:
'The Secretary of State's grant letter sets out guidance for HEFCE during a period of considerable change in higher education.
'In challenging financial times, we will focus our efforts on supporting activity which is in the student and wider public interest: providing resource, in line with the priorities set out in the letter, where it is most needed.
'We welcome the Secretary of State's recognition of the crucial part that universities and colleges are playing to support economic recovery.'
The grant letter can be read online in full here
So far, reactions from the HE sector to the letter have been gloomy:
A spokesperson for the 1994 Group of Universities said:
“This much delayed letter answers none of the questions people across the sector have been asking about postgraduate study and student number controls. In fact it fudges important decisions, putting them off to a vaguely defined future date.
“Instead we have been hit with tough rhetoric on how the Government will clamp down on universities if they take on students that exceed centrally allocated numbers. To add insult to injury, 5000 of these places will be cut.
“As today’s dismal economic figures have shown we need to create more opportunities for people to study and develop high-level skills. The uncertainty over undergraduate numbers and funding for postgraduate teaching and research is causing major problems for UK Higher Education. The Government has to offer reassurance that talented students will not be denied places at excellent universities.”
Russell Group Director General Dr Wendy Piatt, said:
“Although this settlement is largely in line with earlier indications, let’s not forget this is still a huge cut for universities in England.
“This settlement shows just how important the tuition fee income will be to universities to replace what they have lost in the teaching grant.
“We are worried that the ‘core and margin’ policy could result in a cut in student places at the world-leading Russell Group universities - despite the fact they have high demand from well-qualified students. We hope that the future announcement on contestable places for 2013/14 will take this into account.
“On the plus side we are pleased that BIS has asked HEFCE to prioritise funding for high-cost subjects such as STEM, and others of strategic importance like modern foreign languages. These subjects are vital for our universities, economy and society and are vulnerable in times of tighter funding. We urge HEFCE to continue to focus its remaining grant on these subjects in subsequent years, at both undergraduate and postgraduate levels.
“We hope that the planned shared HEFCE/OFFA strategy for promoting access will build on existing work our institutions are already doing to ensure that every student with the qualifications, potential and determination to succeed at a Russell Group university has the chance to do so. We remain concerned that the Government’s access policies risk focusing too much on universities rather than resolving underachievement at school and poor information, advice and guidance. Universities can and do help - but we simply cannot solve these problems alone.
“Capital funding, particularly for research, is under great pressure, and this will really begin to bite in 2012-13. World-class infrastructure, particularly buildings and equipment, is needed to facilitate the very best environment for research and teaching. These cuts will make it increasingly difficult for our institutions to compete with better resourced institutions internationally.”
UCU General Secretary, Sally Hunt, said:
“The government’s university funding plans are a dangerous experiment untried anywhere else in the world that could well be disastrous for our universities.
“Our universities are globally-renowned, yet the government’s plans put that proud standing at risk. For all the talk of empowering students under a new market system, they will ultimately have less choice as fewer courses will be on offer.
“This is an ideological move that will not save the country money, because millions of pounds will have to be pumped into the loans system so students can borrow money to fund their courses.”
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