The 1995/96 allocations differ from those of the past two years because research as well as teaching has been subjected to an efficiency gain of 1.5 per cent. Total research allocations of Pounds 636 million are dominated by the quality-related Q component, which accounts for Pounds 600 million. The remainder is divided into DevR, Pounds 16 million, and the new generic research classification GR, which has Pounds 20 million and is still to be allocated.

Tuition Fee Compensation This element in the 1994/95 allocations has subsequently been consolidated into core funding and so does not appear in 1995/96.

Non-consolidated funding Introduced last year, this element in teaching funding is allotted pro rata with the core teaching allocation. It aims to assist institutions in developing infrastructure and is up this year from Pounds 38 million to Pounds 56million.

Marginal funding This sum of Pounds 4 million is allocated to assist growth in part-time students. Over a third - Pounds 1.357m - has gone to the Open University and the former polytechnics have taken the bulk of the reminder - Nottingham Trent and Teesside both winning more than Pounds 200,000 Non-formula funding It is HEFCE policy to reduce this category to the minimum possible, and it is down from Pounds 338 million to Pounds 287 million this year following the ending of some fixed-term programmes. So far Pounds 93 million has been allocated - much of it in London weighting, which accounts for institutions in the capital taking the bulk of money under this heading - and a further Pounds 194 million is still be to handed out.

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Transitional funding This allocated Pounds 2.35 million to nine institutions who would otherwise have fallen below the 0.5 per cent cash increase line. A de minimis clause means that amounts below Pounds 20,000 are not paid - this means that Exeter, while falling very marginally below 0.5 per cent, receives nothing. The same reasoning accounts for Sheffield College receiving an increase of only 0.3 per cent.

Maximum aggregate student number This number, allocated to each institution, is the number of home or EU award-holding students they are contracted to deliver in 1995/96. In spite of consolidation there are differences against 1994/95 - in some cases institutions failed to deliver contracted numbers and have had MASNs reduced, while others still have built-in growth. Institutions will be allowed to recruit up to 1.5 per cent above MASN without penalties - any recruitment above this level will be penalised so that the institution receives no extra income, and may be penalised in the 1996/97 allocations.

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A marginal reduction of around 6,000 students is expected in next year's MASNs due to a shift in the mix of students towards more expensive subjects.