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1 March 2006

Funding of over 6.7 billion provides a solid platform for future development of higher education

The Higher Education Funding Council for England (HEFCE) announced today the distribution of 6,706 million in recurrent funding for 2006-07 to universities and colleges in England.

The total grant, which represents an overall cash increase of 5.9 per cent compared with 2005-06, provides an uplift for inflation for teaching, plus increases of 98 million for additional student numbers, 60 million for widening participation and 91 million more for research. Provision is made for an additional 26,000 full-time equivalent student places.

Steve Egan, Acting Chief Executive of HEFCE said:

'This represents a good settlement for universities and colleges. Building on previous announcements, funding for 2006-07 continues to make significant inroads into the cumulative effect of years of under-funding of higher education. Although universities and colleges still face significant pressures, the grants we have announced and the additional income from variable fees provide them with a solid platform, enabling them to develop their distinctive missions and meet the growing expectations of students.

'We are particularly pleased with the additional funding for research which will enable higher education institutions to develop through the dual support system the world class research effort in this country. The additional resources that we and the Government are providing for widening participation will enable us to increase support to institutions in their recruitment and retention of full-time and part-time students from under-represented groups. Tackling low rates of participation in HE of people from the lowest socio-economic groups still represents one of the biggest challenges facing the sector.'

The funding for 132 higher education institutions and 145 further education colleges provides funding for 1,001,000 full-time equivalent taught student places. The recurrent funding is made up of the following elements:

  • £4,228 million for teaching, representing an increase of 6.3 per cent over the current year
  • £1,342 million for research, representing an increase of 7.3 per cent.

In addition, we are providing £704 million of capital funding representing an increase of 8.5 per cent. This includes an additional £88 million for research capital including equipment.

Funds for teaching and student numbers

The largest element of the grant - £4,228 million - is for teaching, which includes the following elements:

  • £344 million to support the widening participation of students from under-represented groups, or who are at greatest risk of not completing their studies. This is an increase of 21 per cent compared with the current year
  • £98 million for additional student places, of which £18 million is for new medical and dental students.

Funds for research

The £1,342 million for research will:

  • increase the average unit of funding by 6.1 per cent for departments rated 5 and 5* in the 2001 Research Assessment Exercise (RAE)
  • maintain the average unit of funding in real terms for departments rated 4 in the RAE
  • establish a significantly enhanced charities research element within our research funding
  • provide £22 million for the Research Capability Fund for emerging research subjects.


1.    Full details of the recurrent grants and tables showing allocations to individual institutions are given in HEFCE 2006/08, available on the HEFCE web-site.

Summary tables

Regional tables

2.    HEFCE funds 132 higher education institutions and directly funds higher education courses at 145 further education colleges. Grants for individual universities and colleges are calculated by formula according to the number of students and subject mix and the volume and quality of research.

3.    None of the increases shown in the publication 'Recurrent Grants for 2006-07' take account of the additional income from the introduction in 2006 07 of variable fees for full-time undergraduates.

4.    The publication summarises provisional allocations of recurrent funding to institutions for the academic year 2006-07. Final allocations will be announced in July 2006.

5.    The figure for teaching grant of £4,228 million given in this release does not tally with the figure of £4,209 million total in the grant tables because £19 million is kept in reserve for additional teaching allocations, as explained in paragraph 21 of HEFCE 2006/08.