HEFCE statement regarding funding

On 4 June, the Chancellor of the Exchequer announced a number of measures to bring down public debt in the current financial year (1 April 2015 – 31 March 2016). These included £3 billion in departmental savings, of which £450 million is attributable to the Department for Business, Innovation and Skills (BIS). We (ie HEFCE) have still to receive confirmation from BIS of the cuts in funding to the higher education budget. We anticipate there will be a reduction in the teaching funding provided by government and that this reduction will inevitably affect the funding we are able to provide to institutions. In March we did warn institutions that we reserved the right to review our allocations for the 2014-15 and 2015-16 academic years in the event of such changes to the grant available to us. Any reduction in funding will impact on our allocations to institutions in both the 2014-15 and 2015-16 academic years. We recognise that there is a significant amount of uncertainty in the sector around the potential changes in funding. We are waiting on written confirmation from BIS on the actual changes in funding, and as soon as we receive this we will let institutions know the changes to their allocations. As part of any funding settlement with government we expect them to confirm that we should implement grant reductions for 2015-16 on institutions that over-recruited against their student number control up to 2014-15, consistent with their policy in previous years. We expect any cash re-profiling (including to 2014-15 academic year) to take place in the autumn, so whilst this might not have an immediate impact on cash-flow it will have a bearing on year-end accounts.