Office for Students to allocate £1.5 billion for higher education in England for 2018-19

The Office for Students (OfS) aims to ensure that every student, whatever their background, has a fulfilling experience of higher education that enriches their lives and careers (Note 1). The funding we distribute supports that aim.

The OfS’s chief executive, Nicola Dandridge, said:

‘The OfS’s funding allocations to higher education providers reflect our commitment to ensuring quality and choice for students – particularly in our support for high-cost subjects, including healthcare disciplines, and for specialist providers with world-leading teaching. They also reflect the priority we give to promoting access and successful outcomes for students and delivering value for money in higher education.

‘We are continuing to fund the National Collaborative Outreach Programme, which aims to increase the number of young people from underrepresented groups going into higher education. We have maintained our premium funding for part-time undergraduates and for disabled students, which supports providers as they move towards inclusive models of support and meet the rapid rise in students reporting disabilities and mental health issues. We are establishing an Evidence and Impact Exchange to support effective, evidence-based approaches to access and student success.

‘Our emphasis this year is on a smooth transition to the full implementation of the new regulatory arrangements in August 2019. During this time we will be reviewing our approach to funding for the longer term to ensure that it secures the best outcomes for students.’

Funding for the 2018-19 academic year totals £1.5 billion across four key areas of activity:

• £1,290 million for recurrent teaching grant
• £47 million for knowledge exchange
• £51 million for national facilities and regulatory initiatives
• £150 million for capital funding.

In distributing recurrent teaching grant, we have:

a. Maintained in real terms the total funding for high-cost subjects, while allocating additional funding to support the government’s health education reforms, relating to the transfer to the higher education finance arrangements for courses in nursing, midwifery and allied health professions and increased undergraduate medical school places (Notes 2 and 3).

b. Protected, as far as possible, funding for widening access and supporting successful student outcomes (Note 4).

c. Retargeted funding for postgraduate taught students so that it better complements the impacts of the postgraduate loan system (Note 5).

The allocations reflect the priorities set out in the strategic guidance letter from the Minister of State for Universities, Science, Research and Innovation to the OfS chair (Note 6), and decisions taken by the OfS board.

Total funding for 2018-19 has reduced by £22 million in cash terms compared with the equivalent total for 2017‑18. This follows the reductions to teaching grant announced in the 2015 ‘Spending review and autumn statement’ (Note 7).

The OfS allocations for each provider are shown in ‘Recurrent and formula capital funding for 2018-19’ (OfS 2018.20) (Note 8).

Notes

1. More information on the OfS’s aims and objectives is set out in ‘Office for Students strategy 2018 to 2021’ (OfS 2018.18) and ‘Office for Students business plan 2018-19’ (OfS 2018.19), both published in April 2018.

2. Funding for high-cost subjects has increased by £29 million (4 per cent) to £681 million for the 2018-19 academic year. This is sufficient to maintain the budget in real terms, but the rate of funding per student reduces by 0.6 per cent in cash terms. The increased total includes additional funding to support the government’s health education reforms (see Note 3). A separate supplement for nursing, midwifery and allied health courses has increased by £8 million.

3. The Government’s health education reforms comprise:

a. Changes to the finance arrangements for nursing, midwifery and allied health students following NHS bursary reforms. These apply to students on courses that lead on successful completion to first registration as a qualified practitioner, and are being phased in with successive entry cohorts.

b. An increase of 1,500 medical school training places in England, which was first announced by the government in 2016. An initial increase of 630 places has been made for 2018-19.

4. A total of £337 million is targeted at activities to widen access and support successful student outcomes. Within this total, funding is maintained at:

• £60 million for the National Collaborative Outreach Programme
• £40 million for the disabled students premium
• £72 million for the premium to support successful student outcomes for part-time undergraduates.

The premium to support successful student outcomes for full-time undergraduates has reduced by £30 million, to £165 million.

5. A supplement for postgraduate taught students is being retargeted towards students on courses that are not eligible for postgraduate masters’ loans. We are making overall savings of £14 million by reducing the rate of funding where students are on courses that are eligible for masters’ loans.

6. See the letter, ‘Strategic guidance to the Office for Students: Priorities for the financial year 2018-19’.

7. The government’s ‘Spending review and autumn statement’ 2015 announced a reduction to teaching grant of £120 million between the financial years 2015-16 and 2019-20. Within this reduced total, funding for high-cost subjects was to be maintained, while funding for widening access and to support student success was to reduce by up to half.

8. Higher education providers were notified of their allocations on Wednesday 9 May 2018. These allocations do not include the funding for:

a. Knowledge exchange, which is to be distributed by UK Research and Innovation through Research England.

b. The National Collaborative Outreach Programme, which is allocated to 29 regionally based consortia. See details of the funding for these consortia.

c. National facilities and regulatory initiatives. This supports facilities such as Jisc, and activity such as the National Student Survey and the Evidence and Impact Exchange, which will help to ensure that interventions, activity and approaches to support access, student success and progression are evidence-based and effective. It also includes the Innovation Challenge Fund to support project-based activity to deliver regulatory and other strategic priorities.

Further information about how we allocate funding is in our ‘Guide to funding: How the Office for Students allocates money to higher education providers’ (OfS 2018.21).

9. Formula teaching grants are not directly comparable between 2017-18 and 2018-19 because of:

a. The phased transfer of funding responsibility for students starting courses leading to first registration in nursing, midwifery and allied health professions. Additional funding for these courses from OfS is substituting for income that previously would have come through NHS bursaries.

b. The continuing transition with successive student cohorts from the old (pre-September 2012) fee and funding regime to the current one. This continues to affect a small number of institutions that offer longer courses, such as large part-time providers and those with medical schools.

10. The period from 1 April 2018 to 31 July 2019 is a transition period pending full implementation of the new regulatory framework in August 2019.