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May 2008/15

This report is for information

HEFCE strategic plan 2006-11
Updated May 2008

An updated version of the plan was published in June 2009.

This plan sets out our strategy for the development of higher education in England to 2011. It was developed through extensive consultation and discussion with a wide range of stakeholders and has now been updated for 2008-09.

Foreword and introduction (read online)

Foreword by Tim Melville-Ross, CBE

Higher education in this country continues to be recognised throughout the world for the quality of its teaching and research. Its rich diversity is a significant strength in responding to new and varied challenges.

HEFCE's role through policy development, better regulation and the effective distribution of public funding is key to maintaining the dynamism of the sector. Through this strategic plan we are continuing the process of enhancing the pivotal role that higher education plays in our economy and society.

We are fortunate to be working within a sector where the unit of public funding is being maintained from year to year by the Government, and the capacity for and ingenuity in attracting other types of funding is growing. These factors provide the conditions for English higher education to prosper and continue to deliver benefits to all in society.

Universities and colleges are addressing a wide variety of issues. Through interaction with employers and the community, they stimulate innovation across England, enriching our lives and strengthening the economy. They strongly contribute to addressing current and future challenges such as an increasingly competitive global economy, an ageing population and environmental issues. They also have a key role in ensuring that all who are able to benefit from higher education have the opportunity to do so. We are committed to working with universities and colleges in tackling the highly entrenched inequalities in access to higher education.

In this my first year as HEFCE chair, I am looking forward to playing my role in ensuring the funding council is effective in supporting the higher education sector so that it can further increase its positive impact locally, regionally, nationally and worldwide.

Introduction by Professor David Eastwood
Chief Executive

Our annual strategic plan review provides an excellent opportunity to take stock of the priorities for higher education, and how we can continue to support them. As we begin to develop a new plan for 2009-14, it is also a chance to consider how we should prepare for future challenges.

We do so in a climate of considerable change. The Government's spending review has linked increased funding with new priorities. Growth in student numbers, employer links and widening participation remain as key challenges, reflecting national social and economic priorities; at the same time, population changes could mean fewer school leavers as undergraduates in the next decade, making both older and overseas students more important to the continued health of the sector.

Increased Government funding for higher education in 2008-09, coupled with a commitment to maintain the unit of resource over three years, represents a good settlement in relation to other sectors. This reflects the importance that the Government places on higher education. There is no doubt, however, that this period will be particularly challenging for universities and colleges. They face rising costs - particularly in relation to pay and pensions - during a time of increasing macro-economic pressures. Within these tighter fiscal conditions we will continue to monitor the financial health of institutions, working with them to ensure that diversity is maintained and they continue to play to their strengths.

Much of the research in this country is world class. It is essential that we continue to invest in quality and underpin the research base to maintain the UK's position as second only to the United States. We will do this by developing the Research Excellence Framework as a new system of assessment which will offer a lighter touch with robust disciplinary and institutional benchmarking.

We also see as vital to the country's global competitiveness the growing demand for innovation, which we will support through the Higher Education Innovation Fund. I am particularly pleased that this fund will be increased and extended through the new spending review. Allocated largely by formula, the fund will give a greater incentive to universities and colleges in their work with small firms and other aspects of their contribution to the wider economy and society.

Higher education makes a major contribution to our economy: well over 45 billion a year, according to some estimates. Many universities and colleges already work closely with employers, through work placements, course development and research collaborations. Such engagement must increase to meet the global challenge for higher-level skills, research excellence and knowledge transfer.

That engagement also means developing increasingly flexible courses and study programmes. Foundation degrees are growing in importance, offering more access and greater flexibility. Higher education should also make a fuller contribution to workforce development, with more places co-funded by employers. With our support universities and colleges are vigorously developing appropriate courses.

HEFCE is also working in the regions to help integrate skills development with business support, to meet the needs of employers and the labour market. Part of that role involves improving access to higher education in parts of England, including Cumbria and Cornwall, where students would otherwise have to travel long distances.

Universities and colleges are doing more than ever to connect with communities where there is no tradition of higher education. Further education colleges have a significant to play in these partnerships. Despite many successes in this area, the majority of entrants to higher education continue to be those with better-off backgrounds, and even more needs to be done to close the gap for those from more deprived areas. Through the Aimhigher programme and other initiatives we will build on and extend the partnerships between schools, universities and colleges, including summer schools, expert guidance, and mentoring and staff links.

When variable fees were introduced, there was a commitment to maintaining the real-terms value of the teaching grant, a commitment to stability honoured in the latest spending review. By working with our partners, such as the Higher Education Academy, the Quality Assurance Agency and the Unistats web-site, we will continue to ensure that the quality of the students' learning experience remains paramount throughout higher education. We will also continue to recognise the different costs of teaching, and the need to support key national priorities. So we will continue to target some allocations outside the mainstream teaching grant.

There are also concerns about the numbers of people studying or researching science and related subjects. We will continue to address these through developing our programme for supporting strategic and vulnerable subjects. As the environment and global warming top the world's agenda, our sector has a responsibility to ensure its own sustainability, and to contribute to the debate and research. A new 'Revolving Green Fund' will support institutions in their work to cut their own 'greenhouse gas' emissions.

Finally, just as Government has changed its focus with a new Department for Innovation, Universities and Skills, we have been taking a good look at our own organisation. We are making some internal changes so that we can most effectively respond to these changing priorities. Under these new arrangements better regulation and the financial health of the sector will remain key areas of work.

Behind these objectives lies one overriding objective: to ensure that our higher education system matches the best in the world. By combining the new investment and new opportunities with the talent of those who work in our universities and colleges, we can realise this ambition together.