OfS announces decisions on 2020-21 teaching grant budget

In January this year the Secretary of State for Education announced a reduction to recurrent teaching grant in financial year 2020-21 (April to March) of £58 million - affecting the funding available to the Office for Students (OfS) to distribute to higher education providers in both the 2019-20 and 2020-21 academic years. This reduction sits alongside an increase of £50 million in capital funding.

Following consultation with higher education providers and stakeholders in January and February, the OfS has today published its approach to implementing these savings as agreed by the OfS board. 

Approximately £26 million of the reduction in recurrent funding is attributable to the four month period, from April to July 2020, that falls within the 2019-20 academic year. The OfS will secure these savings from funds not yet committed and will not reduce grants already announced for universities and colleges in this academic year.

While the total recurrent grant for financial year 2020-21 is a reduction of £58 million, it includes funding for additional student numbers in medicine, following the expansion of intakes from 2018-19. This takes the underlying gross reduction to around £70 million.

Within this saving the OfS will protect the rate of funding for pre-registration courses in nursing, midwifery and allied health disciplines (see note three). It will also protect the overall funding for the Uni Connect outreach programme and the disabled students premium; and a funding allocation that supports world-leading specialist providers. 

The funding outcomes for higher education providers for academic year 2020-21 will vary according to their activities and, in particular, the year-on-year changes to their student numbers compared to other providers. The OfS is working closely with the government to monitor the effects of the coronavirus (COVID-19) pandemic on higher education providers, recognising the exceptional steps they are having to take to protect their students and staff and the implications for their financial sustainability. We will continue to work with government to support higher education providers in managing the effects of the pandemic and, where necessary, keep our funding decisions under review. This announcement should be read in that context. On 4 May 2020, the government announced a support package for providers and students. 

Also published today are updated terms and conditions of funding that apply for the academic year 1 August 2020 to 31 July 2021. These apply to the recurrent and capital funding the OfS will distribute to providers that are registered in the Approved (fee cap) part of the OfS Register of higher education providers.

For more information, contact Richard Foord on 0117 905 7676 or email [email protected].

Notes

1. The OfS board’s decisions on funding were taken at its meeting on 16 March 2020 and made in the context of the funding settlement from government announced to us in January 2020 for financial year 2020‑21 and our consultation. That grant settlement was determined before the onset of the coronavirus pandemic in the UK, the full implications of which are not yet known.
2. The budget for academic year 2020-21 has to support an increase in student numbers that count towards OfS grants, including those arising from the government’s health education reforms.
3. The allied health professions for which (along with nursing and midwifery) we will protect the rate of funding are dietetics, occupational therapy, operating department practice, orthoptics, orthotics and prosthetics, physiotherapy, podiatry, radiography (diagnostic), radiography (therapeutic), and speech and language therapy.
4. We intend to notify providers in confidence of their initial allocation of recurrent grant for academic year 2020-21 on Tuesday 12 May 2020, and will publish all allocations on Wednesday 13 May 2020. 
5. We are committed to reviewing our approach to funding for the longer term, reflecting the purpose of OfS funding for providers as one of the regulatory levers through which we can support our strategic objectives and general duties. The development of the OfS’s funding method has to be set in the context of the wider finance arrangements for higher education as a whole. There remains continuing uncertainty about this wider context, pending the government’s response to the report of the independent panel chaired by Philip Augar for the post-18 education and funding review and the outcomes of the next spending review. We are aiming to develop our funding method so that changes are generally introduced for academic year 2022-23, but we will keep this timetable under review to reflect the context of wider government developments and the impact of the current coronavirus pandemic.