The Higher Education Funding Council for England published on 7 February its response to the grant letter it received last month from the Department for Business Innovation and Skills.

The response outlines a total funding distribution of ?4.47 billion, including ?2.3 billion in teaching funding and ?1.6 billion for research.

Teaching funding allocated to universities by Hefce is falling under the new system, as fees replace teaching grant.

¡°Overall Hefce teaching funding has reduced from ?3.2 billion last year,¡± Hefce says. ¡°This reflects a reduction in the numbers of students who entered higher education under the old funding regime, as they complete their studies, and an increase in the numbers of ¡®new-regime¡¯ students as they commence and continue theirs.

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¡°The increase in tuition fees for new-regime students is in most cases significantly greater than the reduction in Hefce grant and, on average, will result in higher income per student for universities and colleges in 2013-14 than in 2011-12.¡±

The statement says that Hefce has also increased the rates at which it funds both old-regime and new-regime students by around 1 per cent compared with the current academic year.?

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Hefce says on research funding: ¡°This is the same cash level of funding that we have allocated for research in the past two years; we are not changing our funding formula for research this year.¡±

Funding for knowledge exchange increased by ?10 million to ?160 million, which Hefce says ¡°will allow us to increase the amount of Higher Education Innovation Funding (HEIF) for the year, reflecting the success of HEIF and the important contribution that it makes to stimulating economic growth¡±.

Capital funding for teaching was set at ?59 million, which the Million+ group of newer universities described as ¡°an all-time low¡±.

Funding for widening participation fell to ?105 million from ?140 million. But a Hefce spokesman said this reflected the loss of a dedicated payment for part-time students, which applied when those students were not eligible to access tuition fee loans, and the change had been agreed with the sector.

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On student numbers, Hefce says: ¡°We expect numbers of full-time undergraduate entrants for 2012-13 to be around 28,000 below government spending review assumptions. This shortfall is largely due to fewer students than usual having deferred entry from 2011-12 into 2012-13.¡±

john.morgan@tsleducation.com