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The Higher Education Funding Council for England (HEFCE) will allocate £3.88 billion to 130 universities and higher education colleges and 212 further education colleges for the academic year 2014-15 

This funding is allocated for the following key areas and activities:

• £1.6 billion for research
• £160 million for knowledge exchange
• £1.6 billion for teaching
• £440 million in capital grants
• £143 million for national facilities and initiatives funding.

Further details are given in ‘Recurrent grants and student number controls for 2014-15: Initial allocations’ (HEFCE 2014/05).

Priorities for funding higher education

HEFCE will continue to invest on behalf of students and the wider public to support world-leading higher education. Our funding supports quality and diversity in learning and teaching; widening access and successful student outcomes; and world-leading research and knowledge exchange activity. We will continue to support the Government’s reforms of higher education, implementing them in a way that works for students and develops world-class higher education in England.

• Research funding is maintained in cash terms. HEFCE will continue to fund research selectively, focusing on world-leading and internationally excellent activity. Support for universities undertaking research funded by charities or business and industry will also be maintained at current levels (£198 million and £64 million respectively).We remain the largest single source of research funds for universities in England.
• Knowledge exchange between universities and business continues to make a significant contribution to economic recovery and growth. We are supporting universities in their work with Local Enterprise Partnerships (LEPs), which are playing an increasingly prominent role in strategic planning for local growth. Knowledge exchange funding, which supports a wide range of high-performance knowledge-based activity, is maintained at £160 million.
• Teaching funding: In 2014-15, the third year of the transition to the new funding arrangements for higher education, HEFCE teaching funding is increasingly aimed at meeting the costs of teaching that cannot be covered by tuition fees alone: support for widening access and student retention; high-cost subjects; and small and specialist institutions. The most significant changes to this year’s allocations for teaching reflect the continuing shift from the old to the new funding regime. HEFCE’s funding for teaching incorporates a reduction of around 5.9 per cent in cash terms.
• Student number control: In response to the Chancellor’s 2013 autumn statement, we have allocated up to an additional 30,000 full-time undergraduate student places at HEFCE-funded universities and colleges for 2014-15. This is a precursor to the removal of student number controls in 2015-16 at HEFCE-funded institutions.
• Postgraduate education: Around £130 million will be allocated to support postgraduate study in 2014-15. Postgraduate research is supported through the £240 million research degree programme supervision fund. These sums are the same as in 2013-14. We are also testing ways of supporting progression into taught postgraduate education in England through pilot projects at more than 40 universities through the £25 million Postgraduate Support Scheme.
• Capital funding totals £440 million. This includes:
  • £160 million for the third year of the UK Research Partnership Investment Fund which, with double-matched funding from private sources, will bring total investment to at least £480 million
  • £106 million for the Research Capital Investment Fund
  • £129 million for the Teaching Capital Investment Fund.
  • In addition, there is a welcome £200 million for science and engineering capital for teaching which will be doubled through matched funding, to be allocated in 2015-16.
• Catalyst. promotes excellence and innovation in higher education by funding initiatives which support economic growth or lead to significant changes in key areas such as efficiencies, student engagement and success, and learning and teaching. The fund will also, where necessary, support universities and colleges in managing the transition to the new funding arrangements while ensuring no detriment to students.

Professor Madeleine Atkins, Chief Executive of HEFCE, said:

‘Public funding is experiencing continuing constraints, and the higher education sector is no exception. The cuts to teaching funding and the continued cash standstill in research funding will hurt universities. They come at a time of considerable change in higher education.

‘The HEFCE Board has made some difficult decisions, balancing several competing interests. We are asking the sector to do more with fewer resources, but, with care, the reductions are manageable.’