HEFCE funding for higher education 2013-14

07 February 2013

The Higher Education Funding Council for England (HEFCE) has announced its high-level funding decisions for higher education in England, following the annual grant letter from the Department for Business, Innovation and Skills and subsequent decisions by the HEFCE Board on 31 January. Allocations to individual universities and colleges will be announced on 21 March.

In 2013-14, the second year of the transition to the new funding arrangements for higher education, HEFCE will continue to invest for the benefit of students and the wider public. We remain committed to sustaining a high-quality teaching experience and to supporting high-cost and strategically important subjects, widening participation and smaller specialist institutions. We also support the Government’s drive to improve efficiency, and will continue to work with universities and colleges to deliver savings.

The total amount the Board agreed for distribution for the 2013-14 academic year is £4.47 billion. This breaks down as follows:

£2.3 billion for teaching

Overall HEFCE teaching funding has reduced from £3.2 billion last year. This reflects a reduction in the numbers of students who entered higher education under the old funding regime, as they complete their studies, and an increase in the numbers of ‘new-regime’ students as they commence and continue theirs.

The increase in tuition fees for new-regime students is in most cases significantly greater than the reduction in HEFCE grant and, on average, will result in higher income per student for universities and colleges in 2013-14 than in 2011-12.

We have increased the rates at which we fund both old-regime and new-regime students by around 1 per cent compared to the current academic year. Under the new funding arrangements HEFCE will continue to fund widening participation activity (£105 million in 2013-14) and student retention (£228 million in 2013-14).

In recognition of the importance of postgraduate provision we are continuing to provide additional funding for taught postgraduate students, who are not eligible for publicly funded tuition fee loans.

We recognise the complexity of having two funding regimes running in parallel and the administrative burden that this places on universities and colleges. We will support them in adjusting to the new regime, and keep any change to a minimum.

£1.6 billion for research

This is the same cash level of funding that we have allocated for research in the past two years; we are not changing our funding formula for research this year. HEFCE remains the single biggest funder of university research in England.

The single largest element of our funding, for mainstream quality-related research (QR), is just over £1 billion (including London weighting). We will continue to support research degrees, with £240 million. The other elements of research funding comprise QR charity funding (£198 million), QR business funding (£64 million) and funding for National Research Libraries (£6 million).

£160 million for knowledge exchange

This is an increase of £10 million for knowledge exchange over last year, and will allow us to increase the amount of Higher Education Innovation Funding (HEIF) for the year, reflecting the success of HEIF and the important contribution that it makes to stimulating economic growth.

£429 million in non-recurrent funds

This year’s non-recurrent funding comprises:

  • £280 million in capital grants (for teaching and research)
  • as part of the capital grant, £120 million for the UK Research Partnership Investment Fund (UKRPIF)
  • £149 million in special funding for national programmes and facilities such as Jisc, and for university museums and galleries
  • support for improving sustainability through the Revolving Green Fund, and to develop strategic change in the HE sector through the Catalyst Fund.

A full breakdown of funding is given in 'Funding for universities and colleges for 2012-13 and 2013-14: Board decisions' (HEFCE Circular letter 04/2013).

Numbers of students entering higher education

On the basis of data submitted by universities and colleges in January, we expect the total number of students on higher education courses in 2012-13 to be a little under 2 million (this includes home, European Union and international students). Of these, the number of students fundable by HEFCE is around 1.3 million.

We expect numbers of full-time undergraduate entrants for 2012-13 to be around 28,000 below government spending review assumptions. This shortfall is largely due to fewer students than usual having deferred entry from 2011-12 into 2012-13. We note significant falls in part-time student numbers, and will monitor this situation. Our expectation is that intakes in 2013-14 will recover, at least in part.

Student number allocations 2013-14

Our priority for student number allocations is to encourage flexibility in student choice by allowing some recruitment above the student number control allocation (without this resulting in a reduction to HEFCE grant). We need also to help manage the risk of overspend by the Government on student support costs, and to avoid the risk of under-recruitment.

We informed higher education institutions of their provisional student number allocations on 18 January. We expect to finalise these allocations at the end of February once any appeals by institutions have been resolved.

Sir Alan Langlands, HEFCE’s Chief Executive, said:

‘This year’s funding allocations will allow universities and colleges to continue to provide a high-quality experience for students. HEFCE is sustaining funding for high-cost and strategically important subjects, student opportunity, and for small and specialist institutions.

‘We recognise the importance of postgraduate provision, and are continuing to provide additional funding for taught postgraduates. This builds on the interim allocation we made available last year.

‘The Government’s continuing commitment to science and research funding is a clear recognition of the vital part that higher education plays in driving economic growth. Funding for the second year of the UKRPIF, which requires double matched funding and hard-headed investment decisions from industry and world-leading charities, demonstrates this commitment and the success of the scheme.’


  1. The grant letter from the Department for Business, Innovation and Skills to HEFCE was published on 14 January. The grant letter provides funding in financial years. HEFCE allocates funding in academic years, starting on 1 August each year.
  2. Further details are given in 'Funding for universities and colleges for 2012-13 and 2013-14: Board decisions' (HEFCE Circular letter 04/2013).
  3. We will announce the allocation of grants for teaching, research and other activities to individual universities and colleges on 21 March.
  4. General information about the new funding arrangements for teaching is available on the HEFCE web-site.


Page last updated 7 February 2013

Share this: