England¡¯s funding council is still planning to punish universities that recruit too many students by cutting their grant, despite the fact that institutions no longer receive teaching funds from the council for the majority of new students.

From next year, universities must also prove compliance with the research integrity concordat in return for research grant.

The plans are contained in the Higher Education Funding Council for England¡¯s consultation on 2013-14 funding arrangements. This includes a draft of a funding agreement that is part of the financial memorandum - the contract between Hefce and universities.

While Hefce was able to use the withdrawal of grant as a sanction against universities in the past, the government¡¯s failure to introduce a higher education bill means that, as yet, Hefce has no official power over the billions of pounds in public-backed funding being routed via the student loans system. Hefce is therefore having to draw up a new financial memorandum without legislation.

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¡°The council will seek to implement grant reductions for any recruitment in excess of the 2013-14 student number control allocation plus the additional [3 per cent] flexibility available above it, and no minimum threshold will apply to such grant reductions,¡± Hefce¡¯s draft funding agreement says.

The document does not state whether Hefce would seek to reduce teaching grant (which some newer institutions without high-cost subjects may no longer receive for new regime students) or research grant (received in only very small quantities by some newer universities).

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Hefce¡¯s document does not amount to a new financial memorandum and appears to be more of a one-year stopgap.

Sir Martin Harris, president of Clare Hall, Cambridge and the former director of the Office for Fair Access, said in a letter to Times Higher Education in April that under current legislation, any conditions imposed by Hefce on income received from undergraduate tuition fees ¡°would be unlawful¡±.

Sir Martin added: ¡°To infringe this principle for any reason would be a disastrous first step on a slippery slope potentially leading to political control of universities whatever the sources of their funding.¡±

Hefce also says that each institution is required to comply with Universities UK¡¯s Concordat to Support Research Integrity.

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¡°Institutions in receipt of research grant from the council are also required to provide assurance of their compliance with the concordat,¡± it adds.

However, for 2013-14 only, institutions may state that they are ¡°working towards compliance¡±.

john.morgan@tsleducation.com