Office for Students announces £1.2 billion in recurrent grant funding allocations to universities and colleges

Today (13 May) @OfficeStudents (OfS) has announced details of £1.2 billion in recurrent grant funding allocations to universities and colleges.

The funding is a core part of the OfS’s regulatory work and helps support high-cost subjects such as medicine, nursing, science and engineering; and further improvements in outreach and student access.

The total recurrent budget for academic year 2020-21 is £1,255 million – of which £1,192 million has been allocated today to the 327 providers registered in the Approved (fee cap) category of the OfS Register. This total represents a reduction of £48 million compared with the revised budget total for 2019-20. This follows a reduction to the funding made available to OfS as announced by the Secretary of State for Education in January. Following consultation with higher education providers and stakeholders in January and February, the OfS published its approach to implementing these savings last week. The total includes:

• £895 million for high cost subjects including medicine, nursing, science engineering and technology
• £256 million to support providers to enhance student access and success
• £60m for partnerships of universities, colleges and others delivering the Uni Connect outreach programme, and which is not included in the allocations to providers announced today.

The funding outcomes for higher education providers for academic year 2020-21 vary according to their activities and the year-on-year changes to their student numbers compared to other providers.

The OfS is working closely with the government to monitor the effects of the coronavirus (COVID-19) pandemic on higher education providers, recognising the exceptional steps they are having to take to protect their students and staff and the implications for their financial sustainability. We will continue to work with government to support higher education providers in managing the effects of the pandemic and, where necessary, keep our funding decisions under review. On 4 May 2020, the government announced a support package for providers and students.

For the 2020-21 academic year, the overall grant funding to be distributed totals £1.4 billion. As well as the recurrent funding of £1,255 million, we are also providing:  

• £150 million for capital funding. Allocations are made to support sustainable investment in higher education learning and teaching facilities and equipment. This funding was announced earlier this year. 
• £21 million for national facilities and regulatory initiatives, such as Challenge Competitions to drive innovative practice across a range of fields. Previous Challenge Competitions have supported student mental health and local graduate opportunities.

Read more about recurrent funding for 2020-21Read more about how the OfS allocates its funding

The OfS is committed to reviewing our approach to funding for the longer term, reflecting the purpose of OfS funding for providers as one of the regulatory levers through which we can support our strategic objectives and general duties. The development of the OfS’s funding method has to be set in the context of the wider finance arrangements for higher education as a whole.

There remains continuing uncertainty about this wider context, pending the government’s response to the report of the independent panel chaired by Philip Augar for the post-18 education and funding review and the outcomes of the next spending review.

We are aiming to develop our funding method so that changes are generally introduced for academic year 2022-23, but we will keep this timetable under review to reflect the context of wider government developments and the impact of the current coronavirus pandemic.