Capital funding

We distributed capital funding for financial years 2022-23 to 2024-25 through both a small formula-based allocation together with a full bidding competition.

Providers eligible for this financial support were those registered with us in the Approved (fee cap) category.

Formula-based allocations 2024-25

The formula distributed funding to eligible providers whose allocation met a minimum threshold of £10,000 and was subject to a cap of £50,000 per provider.

How formula-based funding was calculated

We calculated this capital funding using student numbers reported in the HESES23 survey. Students were counted in terms of student full-time equivalents (FTEs), which are a measure of how much a student studies over a year, compared with someone studying full-time.

Providers received a share of the budget available in proportion to weighted student FTEs.

We used providers' weighting factors that reflect those broad characteristics of their students which give rise to additional capital costs. Weighting factors included:

• course characteristics and associated teaching costs
• level of study (undergraduate or postgraduate)
• additional support for successful outcomes for disabled students
• higher costs faced by specialist institutions because of the nature of their provision.

Not all providers received a capital grant. We only gave a provider a capital allocation if their share was more than £10,000.

Annual formula capital grants are made for (and have to be spent within) a specific financial year. For allocations made in July 2024, providers had to spend funding by the end of March 2025. Annual formula capital grants for 2024-25 were subject to a cap of £50,000 per provider.

Allocations for 2024 were announced in two stages:

• In March 2024, we released the formula capital allocations to those providers that were in receipt of an allocation subject to the cap of £50,000 per provider.
• In July 2024, we released the formula capital allocations to all other providers that were in receipt of an allocation.

Full details can be found in our Formula capital funding: 2024 allocations publication. Annex A shows the formula capital allocations announced in 2024-25.

Bidding competition for capital funding for 2022-23 to 2024-25

The bidding competition for capital funding for 2022-23 to 2024-25 has now concluded. 

The bidding competition was open to all eligible providers (those registered with us in the Approved (fee cap) category), whether they received a formula allocation or not.

We distributed total funding of about £400 million over the three financial years (1 April to 31 March) 2022-23, 2023-24 and 2024-25.

See the outcomes and decisions

Aims of the competition

Our aim in distributing capital funding through a competitive exercise was to enhance the learning experience of higher education students at providers, and to prioritise in particular:

1. Facilities for high-cost science, technology, engineering and maths (STEM) subjects, healthcare disciplines and other technical subjects.
2. Facilities that are designed to meet the specialist skills needs of industry and employers, including at Levels 4 and 5, and through degree apprenticeships.
3. Facilities that will support the development of flexible provision and modes of delivery, including for part-time study, e-learning and blended learning, and higher education short course study.
4. Capital expenditure that will demonstrate value for money and support environmental sustainability in reducing energy usage.

We considered these objectives would:

• promote choice and opportunities for students in relation to high-cost subject areas that require specialist teaching facilities
• support access to higher education for those who need more flexibility in how they study
• help to meet the skills needs of students and employers.

For further detail on the approach we took, see Capital funding for financial years 2022-23 to 2024-25: Formula allocations and invitation to bid.

Other capital grants

We committed about £50 million (over the three financial years) to meet existing commitments, support national facilities and regulatory initiatives and fund the annual formula capital allocation.

We provided capital funding to Jisc, which provides UK universities and colleges with shared digital infrastructure and services, such as the superfast Janet Network. The capital grant to Jisc was to support network upgrades, cybersecurity and learning analytics.

We also provided capital funding for the Higher Education Statistics Agency (HESA) Data Futures programme and to support previous commitments arising from the former Higher Education Funding Council for England’s catalyst fund.

How capital funding is monitored

All providers that are in receipt of OfS formula or bidding competition capital funding are required to report on their use of that funding at the end of each financial year and those reports may be subject to audit. Details about reporting requirements are notified separately.

All funding allocated through the bidding competition needed to be spent in full, and in accordance with the terms and conditions, by 31 March 2025.

We proactively monitor the spend of our funding and expect that any funding awarded by the OfS for a specific financial year to be spent during that year, and that the outlined scope and scale of the project or activities is being delivered as intended.

Capital funding was provided by the government to support sustainable investment in higher education.

It supports capital expenditure – that is, money used to acquire or maintain fixed assets, such as land, buildings and equipment, which is normally capitalised in the provider’s audited annual accounts.

The capital funding available for distribution was specified in the guidance letter from the Secretary of State. For financial years 2022-23 to 2024-25, this sum is £450 million. We expect about £50 million (over the three financial years) will be required to meet existing commitments, support national facilities and regulatory initiatives, and fund the annual formula capital allocation to providers registered with the OfS in the Approved (fee cap) category.

For 2022-23, we introduced a new method of distributing capital funding. It was distributed primarily through a bidding competition, but we also made a small formulaic allocation to eligible providers in the Approved (fee cap) category.

Formula-based allocations 2023-24

The formula will distribute funding to eligible providers whose allocation meets a minimum threshold of £10,000 and will be subject to a cap of £50,000 per provider.

How formula-based funding is calculated

We have calculated capital funding using student numbers reported in the HESES22 survey. Students are counted in terms of student full-time equivalents (FTEs), which are a measure of how much a student studies over a year, compared with someone studying full-time.

Providers receive a share of the budget available in proportion to weighted student FTEs.

We use providers' weighting factors that reflect those broad characteristics of their students which give rise to additional capital costs. Weighting factors include:

• course characteristics and associated teaching costs
• level of study (undergraduate or postgraduate)
• additional support for successful outcomes for disabled students
• higher costs faced by specialist institutions because of the nature of their provision.

Not all providers receive a capital grant. We only give a provider a capital allocation if their share will be more than £10,000.

Annual formula capital grants are made for (and have to be spent within) a specific financial year. For 2023-24, providers will have to spend their whole allocation by the end of March 2024. Annual formula capital grants for 2023-24 were subject to a cap of £50,000 per provider.

Full details can be found in our Formula capital funding: 2023 allocations publication. Annex A shows:

• the formula capital allocations for financial year 2023-24.

Bidding competition for capital funding for 2022-23 to 2024-25

The bidding competition for capital funding for 2022-23 to 2024-25 has now concluded. 

The bidding competition was open to all eligible providers (those registered with us in the Approved (fee cap) category), whether they have received a formula allocation or not.

We will distribute total funding of about £400 million over the three financial years (1 April to 31 March) 2022-23, 2023-24 and 2024-25.

See the outcomes and decisions

Aims of the competition

Our aim in distributing capital funding through a competitive exercise is to enhance the learning experience of higher education students at providers, and to prioritise in particular:

1. Facilities for high-cost science, technology, engineering and maths (STEM) subjects, healthcare disciplines and other technical subjects.
2. Facilities that are designed to meet the specialist skills needs of industry and employers, including at Levels 4 and 5, and through degree apprenticeships.
3. Facilities that will support the development of flexible provision and modes of delivery, including for part-time study, e-learning and blended learning, and higher education short course study.
4. Capital expenditure that will demonstrate value for money and support environmental sustainability in reducing energy usage.

We believe these objectives will:

• promote choice and opportunities for students in relation to high-cost subject areas that require specialist teaching facilities
• support access to higher education for those who need more flexibility in how they study
• help to meet the skills needs of students and employers.

For further detail, see Capital funding for financial years 2022-23 to 2024-25: Formula allocations and invitation to bid.

Other capital grants

We expect about £50 million (over the three financial years) will be required to meet existing commitments, support national facilities and regulatory initiatives and fund the annual formula capital allocation. We are providing capital funding to Jisc, which provides UK universities and colleges with shared digital infrastructure and services, such as the superfast Janet Network. The capital grant to Jisc is to support network upgrades, cybersecurity and learning analytics.

We are also providing capital funding for the Higher Education Statistics Agency (HESA) Data Futures programme and to support previous commitments arising from the former Higher Education Funding Council for England’s catalyst fund.

Capital funding was provided by the government to support sustainable investment in higher education.

It supports capital expenditure – that is, money used to acquire or maintain fixed assets, such as land, buildings and equipment, which is normally capitalised in the provider’s audited annual accounts.

The capital funding available for distribution was specified in the guidance letter from the Secretary of State. For financial years 2022-23 to 2024-25, this sum is £450 million. We expect about £50 million (over the three financial years) will be required to meet existing commitments, support national facilities and regulatory initiatives, and fund the annual formula capital allocation to providers registered with the OfS in the Approved (fee cap) category.

For 2022-23, we introduced a new method of distributing capital funding. It was distributed primarily through a bidding competition, but we also made a small formulaic allocation to eligible providers in the Approved (fee cap) category.

Formula allocations 2022-23

The formula distributed funding to eligible providers whose allocation met a minimum threshold of £10,000 and was subject to a cap of £30,000 per provider.

How formula-based funding is calculated

Changes to the formula capital funding method compared to previous years were to reflect the different overall budget available, remove London weighting (in response to terms and conditions issued by the Secretary of State) and introduce a cap of £30,000 per provider.

We calculated capital funding using student numbers reported in the HESES21 survey. Students were counted in terms of student full-time equivalents (FTEs), which are a measure of how much a student studies over a year, compared with someone studying full-time. Providers receive a share of the budget available in proportion to weighted student FTEs.

We use providers' weighting factors that reflect those broad characteristics of their students which give rise to additional capital costs. Weighting factors include:

• course characteristics and associated teaching costs
• level of study (undergraduate or postgraduate)
• additional support for successful outcomes for disabled students
• higher costs faced by specialist institutions because of the nature of their provision.

Not all providers received a capital grant. We only gave a provider a capital allocation if their share would be more than £10,000.

Capital grants were made for (and had to be spent within) a specific financial year. For 2022-23, providers had to spend their whole allocation by the end of March 2023.

Bidding exercise 2022-23 to 2024-25

The competitive bidding exercise for 2022-23 to 2024-25 has concluded. See full details on the Approach to capital funding webpage. 

Other capital grants

As noted above, the capital funding available for distribution for financial years 2022-23 to 2024-25 is £450 million. We expect about £50 million (over the three financial years) will be required to fund the annual formula capital allocation to providers registered with the OfS in the Approved (fee cap) category, and to meet previous commitments arising from the former Higher Education Funding Council for England’s catalyst fund. In addition, it will support national facilities and regulatory initiatives, including:

• capital funding for Jisc, which provides UK universities and colleges with shared digital infrastructure and services, such as the superfast Janet Network. The capital grant to Jisc is to support network upgrades, cybersecurity and learning analytics.
• development of Data Futures by the Designated Data Body.

Capital funding was provided by the government to support sustainable investment in higher education.

It supports capital expenditure – that is, money used to acquire or maintain fixed assets, such as land, buildings and equipment, which is normally capitalised in the provider’s audited annual accounts.

The capital funding available for distribution was specified in the guidance letter from the Secretary of State. For financial year 2021-22, this sum was £150 million. From this, we provided £19 million to meet existing commitments and support for national facilities and regulatory initiatives. The remaining balance in capital funding was allocated to providers registered with the OfS in the Approved (fee cap) category.

For 2021-22, we introduced a new method of distributing capital funding. It was distributed primarily through a bidding competition, but we also made a small formulaic allocation to eligible providers in the Approved (fee cap) category.

Formula allocations

The formula distributed funding to eligible providers whose allocation met a minimum threshold of £10,000 and was subject to a cap of £30,000 per provider.

How formula-based funding is calculated

Changes to the formula capital funding method compared to previous years were to reflect the different overall budget available, remove London weighting (in response to terms and conditions issued by the Secretary of State) and introduce a cap of £30,000 per provider.

We calculated capital funding using student numbers reported in the HESES20 survey. Students were counted in terms of student full-time equivalents (FTEs), which are a measure of how much a student studies over a year, compared with someone studying full-time. Providers receive a share of the budget available in proportion to weighted student FTEs.

We use providers' weighting factors that reflect those broad characteristics of their students which give rise to additional capital costs. Weighting factors include:

• course characteristics and associated teaching costs
• level of study (undergraduate or postgraduate)
• additional support for successful outcomes for disabled students
• higher costs faced by specialist institutions because of the nature of their provision.

Not all providers received a capital grant. We only gave a provider a capital allocation if their share would be more than £10,000.

Capital grants were made for (and had to be spent within) a specific financial year. For 2021-22, providers had to spend their whole allocation by the end of March 2022.

Bidding exercise

The remainder of the funding was distributed through a bidding competition open to all eligible providers (whether they have received a formula allocation or not).

Our aim in distributing capital funding for 2021-22 through a competitive exercise was to enhance the learning experience of higher education students at providers, and to prioritise in particular:

1. Facilities for high-cost science, technology, engineering and maths subjects, healthcare disciplines and other technical subjects that are designed to meet the specialist skills needs of industry and employers, including at Levels 4 and 5.
2. Facilities that will support the development of flexible provision and modes of delivery, including for part-time study, e-learning and blended learning.
3. Capital expenditure that will demonstrate value for money.

We believed these objectives would:

• promote choice and opportunities for students in relation to high-cost subject areas that require specialist teaching facilities
• support access to higher education for those who need more flexibility in how they study
• help to meet the skills needs of students and employers.

Capital funding for financial year 2021-22 provides further detail of the process and outcomes for the distribution of capital grant by the OfS for the financial year (April to March) 2021-22.

Other capital grants

We provided £10 million to Jisc, which provides UK universities and colleges with shared digital infrastructure and services, such as the superfast Janet Network. The capital grant to Jisc is to support network upgrades, cybersecurity and learning analytics.

£9 million was set aside as provision for the Higher Education Statistics Agency (HESA) Data Futures programme and previous commitments arising from the former Higher Education Funding Council for England’s catalyst fund.