University response: BIS letter to HEFCE

The Department for Business, Innovation and Skills (BIS) has written to the HEFCE setting out funding for 2011/12 and indicating funding levels to 2014/15.

In response to the letter, Deputy Vice-Chancellor Professor John Fisher said: "The government's decision to cut HE funding to this extent is pretty much as we had expected. It's something we have been preparing for through the economies exercise initiated last year. 

"This letter from the Department of Business, Innovation and Skills (BIS) gives us no reason to look for any further savings: the economies exercise target of £35m remains valid. So far, around two-thirds of the savings have been identified. The remaining savings will be found through this year's planning exercise.

"BIS have given us clarity about 2011/12 in this letter and set an expectation of a series of major funding reductions for future years which will be offset by increases in student contributions. Whilst the letter does not explicitly say that cuts to teaching funding will total 80 per cent over the planning period, this does appear to be the case.

"The government's White Paper on the future of higher education is expected in the spring and will give us more information about longer term funding arrangements.

"It's crucial we now look to the future and prepare for the new funding regime, in which a much greater proportion of our income will depend upon our ability to attract high-quality students and provide them with an excellent student experience.  We must also work even harder to increase participation of students from less well-off backgrounds. I am confident that by working together and focusing on delivering world-class research, scholarship and education we will maintain our position of strength."

The BIS letter confirms that the HEFCE's settlement for teaching in 2011/12 will be reduced by over 6 per cent (£300m), bringing it down to £4.6bn. Due to an overlap between the academic year and government year, there may be a further in-year reduction in 2010/11.

There will be further, major reductions in 2012/13 as student contributions increase, bring the teaching grant down to £3.8bn. BIS have also highlighted that social mobility, fair access and widening participation should be a key strategic objective for HE. Institutions wishing to charge over £6,000 from autumn 2012 will need to meet 'tough conditions', including an agreed programme of progress each year against a university's access measures and benchmarks.

Quality Related (QR) income  - our core research funding -  will fall by 4 per cent in 2011/12. Longer term, research funding is forecast to fall by 9 per cent in real terms by 2014.  

Read the letter

What happens next?
Late January- February 2011
HEFCE writes to the sector about their high level funding decisions for 2011/12

Government White Paper expected to provide more information about the future of higher education.

March 2011 
HEFCE writes to individual institutions detailing their funding allocations.   
The University submits its Access Agreement to the Office for Fair Access.

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