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5 March 2009

HEFCE invests nearly 8 billion in higher education in England to secure future prosperity

HEFCE announced today that it will allocate 7,994 million to universities and colleges in 2009-10, representing an increase of 4 per cent from the previous year.

The major elements of the grant are:

  • 4,782 million for teaching, including 269 million for teaching enhancement and student success, and 143 million for widening participation
  • 1,572 million for research
  • 134 million for business and community engagement
  • 1,154 million capital funding including 219 million brought forward from later years to help combat the recession.

Professor David Eastwood, Chief Executive of HEFCE, said:

'This represents a good settlement for universities and colleges. It also represents a crucial investment in developing people and ideas, and provides a major step in helping the country through and beyond the current recession.

'For teaching we have maintained the unit of resource which is key to maintaining quality and affording flexibility to institutions to invest in meeting the needs of an increasingly diverse student population. Funding for research has increased by 7.7 per cent, enabling us to build on the country's world-class research base and continue to invest in curiosity-driven research and applied research as determined by universities.

'Following the 2008 Research Assessment Exercise (RAE), we are allocating research funding selectively by reference to robust judgements of quality. We are funding research of the highest quality in whichever higher education institution and in whatever discipline it is found, but will also be seeking to establish incentives for research collaboration between institutions.

'The 2008 RAE provides the major reason for the significant variations in funding levels between 2008-09 and 2009-10. To enable institutions to manage changes in funding levels we are providing 24 million in moderation funding so no institution sees a reduction in cash terms compared with the equivalent unmoderated figure for 2008-09.

'Although this settlement provides universities and colleges with resources to help weather the economic downturn, they still face longer-term, difficult challenges and will need to plan prudently and invest selectively. I am confident that through the exceptional contribution they are making to the country's wellbeing and future prosperity they will remain a priority for public investment, enabling them to emerge from the recession with a strong sense of purpose and direction.'

Other features of the announcement are:

  • In 2009-10 there will be growth in fully funded student numbers of 10,000. These have already been committed. As a result of this and previous commitments DIUS will be providing 30,000 more fully funded places in 2009-10 compared to 2007-08. The Secretary of State in his grant letter to HEFCE in January said he wanted to review the position of additional student numbers for 2010-11 later this year.
  • The position of science subjects is being protected. In teaching 25 million is being provided for very high cost laboratory subjects as a targeted allocation within the recurrent teaching grant from 2009-10
  • In research the share of mainstream quality-related grant in science, engineering, medicine and mathematics is being maintained. We are also providing a further 12 million of temporary funding to smooth the impacts of the RAE on the 'pots' available for individual subjects.
  • Within the overall funding for teaching, 30 million is being transferred from the funding currently related to improving retention, to widening access. Alongside other priorities this will allow universities and colleges to do still more in collaboration with schools to ensure that young people with the potential to benefit from higher education are identified and helped to apply successfully
  • Funds have been released to universities and colleges from a reduction in special funding from £411 million in 2008-09 to £316 million in 2009-10. This money is being reinvested in the sector in a number of ways including supporting expansion and employer co-funded provision.


1.   Full details of the recurrent grants and tables showing allocations to individual institutions are given in 'Recurrent grants for 2009-10' (HEFCE 2009/08).

2.   These allocations are provisional; final allocations will be announced in July 2009.

3.   HEFCE is directly funding 130 higher education institutions and 124 further education colleges for 2009-10. Grants for individual universities and colleges are largely calculated by formula, according to the number of students and the subject mix, and the volume and quality of research.

4.   Funding is provided as block grant which institutions can spend as they choose on teaching, research and related activities.