Funding for higher education will increase to just over ?7.8 billion next year, the Government has said. The settlement, which was unveiled in the annual grant letter released today, is up from about ?7.1 billion this year.

The teaching grant for 2009-10 will increase by more than 3.2 per cent from ?4.92 billion to ?5.08 billion. Research funding will rise more than 4 per cent from ?1.44 billion to just over ?1.5 billion.

The figures were welcomed by Universities UK, although it noted that the overall figure includes ?220 million in capital spending that John Denham, the Universities Secretary, has ordered the sector to bring forward from 2010-11 to 2009-10. UUK also expressed concern that the funding letter does not look beyond next year.

Diana Warwick, chief executive of UUK, said: ¡°What the sector needs is stable, sustainable funding to assist higher education institutions in their forward planning.¡±

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Mr Denham said the two priorities for the sector in the coming year would be supporting the economy through the recession and building a framework for the future of higher education. He said it was time for it to repay years of investment by offering ¡°practical help¡± to those who need it.

¡°By 2011, funding for higher education will have increased by over 30 per cent in real terms since 1997, which reflects the Government¡¯s belief that a well-funded, successful, independent higher education sector is a vital part of our economic infrastructure, both locally and nationally,¡± Mr Denham said.

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¡°One of my main priorities for the Higher Education Funding Council for England in 2009 is to support and encourage the sector to use all of its huge capacity to train, research, innovate and inspire, reaching into local communities to offer practical help to individuals and businesses through these tougher economic times while laying the foundations for the future.¡±

Wes Streeting, president of the National Union of Students, said: ¡°This year¡¯s increase in funding for the higher education sector demonstrates the vital importance of sustainable funding to combat recession and rising unemployment.

¡°It is therefore essential that increased funding is made available in future years, enabling people to enter higher education and gain new skills.

¡°New educational opportunities are infinitely preferable to the consequences of long-term unemployment, which are both devastating for individuals and their families and poisonous to the health of the economy.¡±

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For a full report and further reaction to the grant letter, see next week¡¯s Times Higher Education.

john.gill@tsleducation.com