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Outcomes of the consultation

Summary of responses and decisions made.

New arrangements for teaching funding - 2012-13 and beyond

We are currently in a two-stage process that will establish our approach to funding teaching and allocating student numbers in higher education (HE) in England from 2012-13. This follows the Government's policy to change the way in which it funds teaching at universities and colleges as set out in the recent White Paper 'Higher education: students at the heart of the system'.

The two stages take the form of two consultations. The first ran between June and September 2011 and proposed largely interim arrangements for the 2012-13 academic year. The second stage will propose arrangements for 2013-14 and beyond.

Stage one: consultation and bidding for student places

Between June and September we consulted on interim funding arrangements for teaching in the academic year 2012-13. This consultation closed on 2 September.

Part of this consultation set out ways in which we plan to introduce greater dynamism and competition in the higher education sector through the control of student places (see 'principles' below).

Following the consultation we have now published details of decisions on setting these controls for 2012-13.

This included an invitation to bid for the available 'margin' of 20,000 student places set out in the consultation's proposals. This invitation has now closed.

Another of the other key proposals for greater dynamism and competition in student recruitment allows universities and colleges to recruit an unlimited number of students with grades AAB or above at A-level or equivalent qualifications. We have now published a list of these equivalent qualifications.

AAB+ equivalences

[ Download AAB+ equivalences as Adobe PDF 40K | Download AAB+ equivalences as MS Word 43K ]

Please note that the list of frequently asked questions now includes the protection of non AAB+ SIVS from the cut to create the margin and the opportunity for specialist institutions in the performing and creative arts to opt out of the AAB+ core and margin process.

Stage one: principles

The proposals in the first stage of our consultation on the new funding arrangements for teaching are based on the following principles:

  • Interim funding to smooth transition

    In 2012-13, most students - those who started university in previous years - will have entered HE under the old fees regime. We believe that teaching funding for 2012-13 needs to take account of these circumstances to ensure an orderly transition to the new arrangements.

    We are therefore proposing an interim funding system for students entering HE in 2012-13. This interim system will maintain considerable elements of the present teaching funding method, subject to adjustments that recognise the Government's new policy priorities. For new regime students we are proposing a modified version of our current funding method for 2012-13 only. The arrangements for funding new regime students and allocating numbers will be reviewed in stage two of the consultation in winter 2011-12, when we will consult on funding arrangements for 2013-14 and beyond.

  • Phasing out the current funding method

    We propose an approach to phasing out the current funding method. We also set out proposals for non-mainstream funding in which some allocations are phased out over a two-year period, and others are maintained in 2012-13 but will be subject to review in stage two of the consultation.

  • Dynamism and competition

    The consultation also sets out our proposals for implementing two elements of the Government's policy of introducing dynamism and competition through student choice while controlling the overall cost of HE to the taxpayer. The first is the unrestrained recruitment by institutions of students who have achieved grades of AAB or above at A-level, or equivalent qualifications. The second is the removal of up to 20,000 places from the total of new entrants, and their reallocation to institutions that have an average full-time fee of 7,500 or less (net of fee waivers), and who can demonstrate clearly the quality of their provision.

Background to the reforms

At present, the majority of the public funding for HE teaching received by institutions comes via the 'block grant' that we administer (see our 'Guide to funding' for full details). Institutions use this grant to fund a wide range of courses.

The Government's White Paper, 'Higher education: students at the heart of the system', sets out its intention to change the ways in which teaching is funded and student numbers are managed. This aims to increase student choice and support greater diversity in HE.

Under these new arrangements more public funding will be provided directly to students, as up-front tuition loans, and less funding will be provided to institutions as teaching grants. This means that a high proportion of public funding for teaching will be channelled through the Student Loans Company, and we will have substantially less funding available to support teaching.

From 2012, students entering HE will pay graduate contributions to HE providers at higher regulated levels. The standard maximum fee level will be 6,000 per year for a full-time undergraduate student (although institutions may choose to charge below this level), with a higher rate of up to 9,000 permitted for institutions that have an access agreement with the Office for Fair Access. Students will be able to access loans which they will not need to start repaying until they are earning more than £21,000 a year.


June 2011 Stage one of the consultation begins addressing:
  • the phase-out of funding for old-regime students
  • numbers control and teaching funding for new regime students for 2012-13 only.
July 2011 Consultation events on 8, 13, 15 July.
September 2011 Stage one of the consultation closes on 2 September
End October 2011 Subject to the outcome of the consultation, we will issue a call for bids and detailed criteria for re-allocating 20,000 places
November/December 2011 Decision of the HEFCE Board published
11 November 2011 Deadline for proposals for 20,000 places
Winter 2011-12 Stage two consultation begins addressing number controls and teaching funding for new -regime students from 2013-14
March 2012 Initial allocations for 2012-13 announced and forecast of 2012-13 student numbers
May 2012 Stage two of the consultation closes
July HEFCE Board decisions on stage two of the consultation which are published shortly after the Board meeting

Sector impact assessment of the stage one consultation

In developing the proposals for teaching funding and allocating student numbers for 2012-13 we have assessed the impact on the HE sector in terms of regulatory burden, equality and diversity, sustainable development and privacy.

Sector impact assessment of the stage one consultation

[ Download Sector impact assessment of the stage one consultation as  Adobe PDF 81K | Download Sector impact assessment of the stage one consultation as MS Word 93K ]

Last updated 20 October 2011