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Institutions' finances

Higher education institutions in England receive funding from many different public and private sources. We are the largest single source of income for the higher education sector.

We provide funding for teaching and research to institutions as a block grant. Institutions are free to distribute the money internally at their discretion, as long as it is used to support teaching, learning and related activities. Institutions are accountable to HEFCE, and ultimately to Parliament, for the way they use HEFCE funds.

Financial memorandum

The financial memorandum between HEFCE and the institutions we fund sets out the terms and conditions for payment of HEFCE grants.

Each year we draw up a funding agreement - or ' Part 2' of the memorandum . This gives:

  • conditions specific to the institution
  • the funds available to the institution 
  • the educational provision the institution has agreed in return for those funds.

Memoranda of understanding

We agreed with three key regulators a protocol for the exchange of institutional risk information. This is an efficient way of promoting institutional accountability and easing the regulatory burden on HEIs.

Financial health of the sector

We also compile annual reports that summarise the financial health and future financial sustainability of the English higher education sector.

Page last updated 13 October 2011

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