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Bringing forward capital spending from 2010-11: round two

December 2011 | ref: Circular letter 05/2009


Heads of HEFCE-funded higher education institutions

Dear Vice-Chancellor or Principal

1.   This letter asks higher education institutions to look again at their capital investment plans for 2010-111 to see if there is further scope for capital expenditure to be brought forward.

2.   In December 2008 (Circular letter 35/2008) we asked all universities and colleges to consider bringing forward capital expenditure from 2010-11 to 2009-10, to enable us to bring forward £200 million of capital funding into 2009-10.

3.   We received a very strong response to this request, especially in view of the complications of reviewing capital programmes in such a short timescale. This reflects the extent to which universities and colleges have seen this as an opportunity to contribute to addressing the challenges of the economic downturn.

4.   On 26 February 2009 the HEFCE Board agreed to bring forward capital funding of £150 million for 97 projects at 54 institutions. In total this will support increased capital expenditure in 2009-10 of £280 million.

5.   The HEFCE Board also agreed that it wished to invite all universities and colleges to look again to see what further scope there might be for further capital expenditure to be brought forward. This is to identify further projects so that the full £200 million of capital funding brought forward to 2009-10 (as confirmed in the January 2009 grant letter2) can be utilised.

6.   Projects submitted for consideration should include those for which there is a reasonable expectation that they can be started earlier than originally planned, even if planning permission has not yet been secured. Projects that are predominantly equipment should not be included as these are considered not to meet the criteria set out in paragraph 7 of this letter.

7.   The criteria to be used in selecting those projects that should be accepted are:

  • the direct impact on the construction and supporting industries in the UK
  • the direct impact on the local, regional or national economy and on jobs
  • the environmental impact of the proposed project(s), in particular their contribution to reducing carbon emissions
  • the project(s) start on site dates to be brought forward into 2009-10; recognising that completion may be after March 2010
  • the expenditure is not on the residential estate.

8.   As before we will use the external, panel to review the outcomes of the internal assessments.

9.   Reflecting the commitment made by government departments and agencies in the Pre-Budget Report3, we also ask that universities and colleges, in letting contracts, consider making it a requirement that successful contractors have apprentices as a proportion of the project workforce. Office of Government Commerce guidance is available on the inclusion of skills requirements in procurement processes in this way.

10.   In the event that the eligible proposals submitted exceed £200 million we may consider pro rata funding.

Submission of proposed projects

11.   Universities and colleges should submit their proposed projects to be brought forward via the HEFCE extranet by midnight on 26 March 2009. The template and access details are the same as provided in January for the previous round of submissions, but will also be re-sent to all institutions in the next few days.

12.   Your submission should include:

  • a description of the project(s) to be brought forward
  • details of the cost of the projects(s)
  • details of the increase in economic impact in 2009-10 and how this has been assessed
  • the reasons why you are confident that the start date(s) of the project(s) can be brought forward.

13.   Submissions should be signed by the head of the university or college to certify that this is genuinely additional activity being brought forward.

14.   We will ask successful institutions to confirm in May 2010 that the activity has been brought forward, the actual costs and that it was genuinely additional. We therefore expect you will maintain sufficient records to demonstrate these things and we may select a sample of proposals for audit.

Notifying universities and colleges

15.   On 7 May 2009 the HEFCE Board will consider which projects should be brought forward from 2010-11 to 2009-10. We will then confirm the outcomes to universities and colleges and inform them of the changes to the profile of capital funding (increasing funding in 2009-10 and reducing funding in 2010-11).

Yours sincerely

Steve Egan
Deputy Chief Executive


1.   All years referred to in this Circular letter are the Government's financial year, that is to 31 March each year, because this is the year that applies to capital funding.

2.   Grant letters to HEFCE from the Department for Innovation, Universities and Skills can be read in full on the HEFCE web-site.

3.   'Pre-Budget Report 2008: Facing global challenges: supporting people through difficult times' (HM Treasury Cm 7484, November 2008).

Enquiries should be directed to:

For further information contact Ian Lewis, tel 0117 931 7336, e-mail i.lewis@hefce.ac.uk

Page last updated 14 March 2012

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