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February 2012/04
Policy development

Responses should be made online by Friday 25 May 2012

Student number controls and teaching funding
Consultation on arrangements for 2013-14 and beyond

This consultation seeks views on changes to student number controls and teaching funding in higher education from academic year 2013-14.

To: Heads of further education colleges
Heads of HEFCE-funded higher education institutions
Heads of non-HEFCE-funded providers of higher education
Of interest to those responsible for: Senior management, Finance, Governance
Reference: 2012/04
Publication date: February 2012
Enquiries to:

HEFCE-funded colleges and universities should raise any questions with their HEFCE institutional team (see our searchable list of contacts)

Higher education providers which are not currently funded by HEFCE should contact Derek Hicks, Regional Consultant, e-mail

Queries from other interested parties should be sent to

Table of contents and executive summary (read online)


  • Executive summary
  • Introduction
  • Part 1: Student number control and teaching funding: policy, priorities and principles
  • Part 2: Student number controls
  • Part 3: Proposals for funding teaching from 2013-14 onwards
  • Annex A Consultation questions
  • Annex B Comparison of non-mainstream funding streams 2012-13 and 2013-14
  • Annex C Summary of TRAC(T) costing data 2007-08 to 2009-10
  • Annex D Summary of method for calculation of widening participation funding 2012-13
  • Annex E Providers currently in receipt of funding after review of exceptional funding for providers in 2008
  • Annex F Glossary of terms and abbreviations

Executive summary


1.   This consultation seeks views about changes to student number controls and teaching funding policy for implementation from 2013-14.

2.   The proposals cover all aspects of our teaching grant except the method for phasing out the subject-related elements of funding for students who began their courses before 1 September 2012 which has already been agreed following consultation in 2011 ('Teaching funding and student number controls: Consultation on changes to be implemented in 2012-13', HEFCE 2011/20).

3.   We aim to continue to ensure a smooth transition to the new finance arrangements for higher education introduced by Government from 2012-13.

4.   We encourage responses to the consultation from all higher education providers, including potential providers of higher education and those we do not currently fund, because the developments we propose may affect them in the future.


5.   In 2011, the Government published its higher education White Paper, 'Students at the heart of the system', and a technical consultation 'A new, fit-for-purpose regulatory framework for the higher education sector' (both available at These documents set out proposals for fundamental changes to the financing and regulation of higher education in England including a policy that, for students entering higher education from 1 September 2012, tuition fees should be a much more significant source of teaching income for higher education providers. A new role was also proposed for HEFCE as independent lead regulator for higher education.

6.   Our consultation has been developed in the context of those government policies. It sets out, in relation to the operation of student number controls and teaching funding grant, how HEFCE will:

  • support student choice and encourage greater competition between higher education providers
  • create a level playing field for all higher education providers (which may in the future include those we do not currently fund directly)
  • ensure the overall public financing of higher education remains affordable to Government
  • provide continuing support for teaching disciplines and other areas which are a priority to Government and in the public interest, and which carry additional costs that cannot be met through tuition fees.

7.   We are consulting now so that funding changes for 2013-14 can be agreed in time to enable the usual timetable of grant announcements.

8.   Public funding for teaching costs comes from two main sources: tuition fees paid by students; and grants from public sources including HEFCE. For students entering higher education from 1 September 2012, tuition fees will become a much more significant source of teaching income.

9.   For some groups of students attending publicly funded institutions (mostly undergraduates), there are overall limits set out by law on the fees that can be charged. Publicly funded tuition fee loans will be available to these students, so that there is no up-front cost to them. These loans are repayable once the student is earning above a certain amount. Publicly funded maintenance grants and loans are also available to help with the living costs of those studying full-time.

10.   Providing loans and grants to students has a cost for Government, which it needs to control. It does this by limiting the overall number of students that can be recruited and who may be a call on student support. Thus, currently, HEFCE sets a ‘student number control’ limit on entrants for each provider that we fund.

11.   From 2012-13 undergraduates with entry qualifications equivalent to grades AAB at A level, or higher, are excluded from the student number control. Providers are therefore unrestricted in how many students with these qualifications they can recruit.

Key points

Student number control

12.   This consultation seeks views on how the student number control should be implemented from 2013-14.

13.   Government is expected to issue further guidance to HEFCE about its exact policies for 2013-14. Once we receive this guidance we will consult about how these are implemented in as timely and effective manner as can be achieved. Meanwhile, we consider there are some aspects of implementation that lie within known policy about which we can consult now.

14.   We propose to continue to operate a student number control on full-time undergraduate students expressed in terms of entrants, rather than students in all years of study. It would apply to the population of students eligible to claim student support, rather than those that actually claim it.

15.   We also seek views about freeing-up the admission of certain groups of 'top-up' students, and about establishing a clear process for determining equivalent qualifications for entrant-control purposes.

Funding for teaching

16.   HEFCE’s funding responsibility is to fund the activity of providers. We do not fund individual students, although we count students in our funding method as a proxy measure for providers' activity.

17.   In future a much more significant proportion of public funding for teaching will come through tuition fee loans. However HEFCE will still have a budget to support teaching, albeit reduced in scale. Our funding interventions will need to be carefully focused in order to make the best use of public funds.

18.   Our role will be to invest on behalf of students to ensure a high-quality experience for them. We will prioritise funding on government priorities and invest where tuition fees cannot cover costs, or where it is in the public interest to support provision that is vulnerable.

19.   We wish to minimise major changes to funding mechanisms in these early years of implementing the Government’s funding reforms. This will avoid additional volatility in funding which may affect students, and will limit the complexity for providers in managing two finance and funding regimes simultaneously (one relating to students that start before 1 September 2012 and one relating to those who start after this date).

20.   In particular, we wish to:

  • ensure that annual funding changes reflect the shift in the balance of student numbers between old- and new-regime students, so our allocations need to reflect the student numbers reported in the year and be reviewed as more accurate data becomes available about those numbers
  • be consistent, wherever possible, with previous approaches, particularly in our method for counting students, so as to limit complexity and burden on providers.

21.   In the consultation we discuss rates of grant and total allocations. All of these figures are indicative only and are very likely to change. They do not represent a commitment by HEFCE, but indicate our broad intentions and the comparative scale of allocations, to clarify our proposals. Our total budget, provided by Government, is fixed each year. So we will adjust allocations and funding rates as necessary to ensure they remain affordable within that total, and taking account of the student numbers that providers report in future data returns.

22.   Initial rates of HEFCE grant to providers for academic year 2013-14 will be published in March 2013.

High-cost subjects

23.   We propose to fund provision only in subjects where data show that average costs for providers exceed £7,500.

24.   The rates of grant for different subject-related price groups will broadly reflect average costs, but with a reduction to reflect that tuition fees pay a significant part of these costs, and also to reflect our level of grant from the Department for Business, Innovation and Skills.

25.   We propose that rates of funding for high-cost part-time provision should be the same, pro rata, as for full-time provision.

26.   From 2013-14, we propose to provide higher rates of grant for postgraduate (PG) taught provision than for undergraduate (UG) provision. This is prompted by the lack of loan facilities for postgraduate students. It is an interim approach which we will review after the transitional period, in around 2015-16. The rates of grant for postgraduate taught students will comprise:

  • the same rates of grant provided for undergraduate provision, plus
  • a further supplement for all subjects in price groups A to C, other than where students have access to the undergraduate student support regime (PGCE students and some studying architecture).

27.   Funding for high-cost subjects will be as follows (see paragraph 186 for an explanation of 'price groups'):

Price group Subjects
A Clinical years of study in medicine, dentistry and veterinary science UG and PG
B Laboratory-based science, engineering and technology

Agriculture and forestry

UG and PG
C1 Archaeology

Design and creative arts

Information technology and systems sciences, software engineering

Media studies

UG and PG
C2 Other intermediate cost subjects with a laboratory, studio or fieldwork element. This includes sports science, which previously was split for some providers between price groups B, C and D. It also includes all students on sandwich year-out placements PG only
D Classroom-based subjects No allocation
Allocations to support clinical subjects

28.   We have historically provided some additional funding for providers to help them meet the additional costs of pay settlements from 2003-04 for clinical academic staff and of increases in employers’ contributions from 2004-05 to the National Health Service (NHS) pension scheme. We will continue to allocate these to providers at the same levels as before. They comprise:

  • clinical consultants' pay
  • senior academic general practitioners' pay
  • NHS pension scheme compensation.
Allocations to support highest-cost science, technology, engineering and mathematics subjects

29.   We propose to continue to provide an additional allocation for undergraduate and postgraduate provision in four subjects (chemistry; physics; chemical engineering; and mineral, metallurgy and materials engineering) which are particularly expensive and whose costs are understated in our subject costing data. This will be at the same levels as 2012-13.

Flexible learning: part-time and alternative modes of study

30.   We propose to provide funding where students are on accelerated undergraduate degree programmes or intensive postgraduate taught courses, recognising the additional costs that these types of provision incur each year. This will be available in relation to undergraduates in price groups B, C1, C2 and D and to postgraduates in price groups B, C1 and C2. This will be at the same levels as 2012-13.

31.   There are extra costs associated with part-time provision. Providers can meet some of these costs through tuition fees, but the scope for this is more limited in higher-cost subjects. We therefore propose to provide additional funding for part-time undergraduate students in price groups A, B and C1. Funding will no longer be provided for students in price groups C2 and D.

Costs of providers in London

32.   Teaching at campuses in London incurs additional costs, relating mainly to staff salaries and estates. We therefore propose to provide funding for providers in relation to students attending courses in London. This will apply to subjects in all price groups at broadly the same rates as 2011-12.

Student opportunity

33.   We propose to provide funding for providers to recognise their additional costs in addressing inequalities in higher education, and of raising the attainment of students from disadvantaged backgrounds and enabling them to succeed in higher education. This funding is distinct from, but complementary to, the expenditure arising from access agreements with the Office for Fair Access, which is provided predominantly in the form of direct financial support to students through fee waivers, bursaries and scholarships. Many providers do not have access agreements.

34.   We propose two main elements to this funding:

  1. A Student Opportunity allocation. This will comprise separate elements for full-time and part-time undergraduate provision and separate calculations to reflect:
    1. The recruitment and retention of students from geographical areas with traditionally low educational achievement and/or higher education participation rates, who have the potential to succeed in higher education.
    2. The recruitment and retention of students who have the potential to succeed in higher education but are likely to need more support than others to enable them to complete their studies. This will reflect the characteristics that we have observed are indicators that a student may require extra support.
  2. A Student Opportunity allocation for Disabled Students. This will be allocated to reflect the student numbers at each provider and the proportions that are in receipt of Disabled Students’ Allowance.

35.   Our proposals for student opportunity funding include the withdrawal in 2013-14 of £40 million of additional funding for widening access for part-time students that was introduced in 2006-07, when part-time provision did not benefit from the introduction of variable fees and increased tuition fee loans for full-time undergraduates. Student support arrangements have now been extended to part-time undergraduates so this additional funding is no longer required.

Funding for providers with distinctive provision: institution-specific allocation

36.   We recognise that some higher education providers, particularly specialist institutions with distinctive provision of public value, have costs that cannot reasonably be met through tuition fees and which our main funding allocations do not adequately address.

37.   We propose to review, during 2012, which providers have a case for exceptional support in our allocations from 2013-14. The review will consider both the existing recurrent institution-specific and non-recurrent 'London whole institutions' allocations.

38.   This consultation invites comments on the main criteria that we propose for that review, relating to public benefit and distinctiveness, as well as evidence that exceptional costs arise that cannot be met through other income sources.

Strategically important and vulnerable subjects

39.   The consultation outlines how we propose to identify, monitor and support strategically important and vulnerable subjects (SIVS) in our approaches to funding, student number controls and providing information.

40.   In the new funding context we will no longer have a single list of SIVS: we will continue to support those subjects which have until now been identified as strategically important and vulnerable, but we will also monitor the health of all subjects and make selective interventions targeted on the specific risks to those subjectssee note 1 .

41.   Our support for SIVS is a cross-cutting priority and reflected throughout this consultation, including in our proposals relating to high-cost subjects and postgraduate taught provision.

Responding to this consultation

42.   Responses should be made by 1700 on Friday 25 May 2012 using the online form, which can be accessed alongside this document.

43.   We will hold consultation events during March and April 2012. We have sent invitations to HEFCE-funded higher education institutions, further education colleges and non-HEFCE-funded providers of higher education. Further places are available but limited, so early booking is advisable. To book, e-mail For further information contact Nicholas Dibley (, 0117 931 7414).


  1. Subjects which have until now been identified as SIVS are chemistry, physics, engineering, mathematics, modern foreign languages and related area studies, and quantitative social sciences.