Capital funding for financial year 2021-22: Allocations and invitation to bid

A provider can submit a bid for funding for a project that is already underway. A bid can be submitted for expenditure that has been committed prior to submission of the bid if:

• this is for an eligible project that meets the criteria as defined in the invitation to bid document
• the money is spent within the 2021-22 financial year, meaning from 1 April 2021 to 31 March 2022.

For those bids that are funded, all monies must have been spent in full by 31 March 2022. This means that we would accept committed expenditure that is clearly identified as such within your finance system as at 31 March 2022, i.e. in accounting terms you would expect to be able to accrue for this expenditure and that auditors could confirm this treatment if required.

We are not permitted to provide grants in advance of need and our grant specifically covers the period to 31 March 2022. Capital grants are allocated on a government financial year basis so the grant needs to be spent in that period.

A provider can bid for capital funding for financial year 2021-22 as part of a longer-term project, such as a multi-year project. However, any funding awarded by the OfS in the current bidding exercise must be spent during the 2021-22 financial year.

Providers should give some explanation and context of the overall financing of the capital project across all years of the project in their narrative answers.

We are unable to commit to or confirm capital funding beyond 2021-22 as this is dependent on the government’s spending review and confirmation of their priorities beyond this financial year.

Any future capital funding competition will necessarily reflect OfS and government priorities at that time.

Where a bid is successful in being awarded capital funding for financial year 2021-22 for a long-term (multi-year) project, the same project may be submitted in any future competition for capital funding from the OfS for subsequent years, subject to meeting the criteria that will apply for such a competition. Success or otherwise in the competition for 2021-22 capital funding will not in itself influence the success of a bid for the same project for a future year. Each annual competition will be treated wholly independently and will reflect the priorities at that time.

Providers are allowed to submit one bid for up to £3 million. One bid can be for multiple projects that contain multiple items of appropriate capital expenditure that meet the OfS criteria set out in the invitation to bid document.

The provider will need to make sure that the overall bid, with its constituent projects, meets the OfS criteria as specified in the invitation to bid document. We envisage that this may include:

• multiple items of capital expenditure that meet the definition under ‘relevant expenditure’, so that a single capital project may cover multiple facilities. The bid must meet the criteria as laid out in the invitation to bid document including relevant expenditure and be well managed and provide value for money (paragraphs 40 to 61)
• a bid may include a number of capital projects, that meet the definition of relevant expenditure and address one or more of the three priority categories under criterion 1 as specified under paragraphs 45 to 54 of the bidding guidance. It must also be well managed and demonstrate value for money as set out in paragraphs 55 to 61.

Where a bid relates to multiple items of appropriate capital expenditure, it will be scored as a whole and in its entirety – we will not score individual projects within a bid, rather it will be scored, as set out in paragraph 62 onwards in the invitation to bid document, as one complete submission against each of the categories in criterion 1 and against criterion 2 (value for money, project and risk management). As such, providers should consider whether the inclusion of particular projects within a multi-project bid may enhance or detract from the overall strength of their bid.

As detailed in paragraph 71 of the invitation to bid document, providers are asked to submit as part of their submission a form that collects numerical data in a structured format about the financing for capital expenditure. This should set out the total cost of the project in financial year 2021-22 and in subsequent years, together with details of the funding sought from the OfS (capped at £3 million) and any other sources of finance for the capital project or items for 2021-22.

The form also collects narrative information in which providers should provide a summary overview of their bid, including a clear explanation of the relevant facilities that form part of the bid and (in answering question 5 of the form) the financing for them to ensure this is clear and aids our understanding of the bid.

As stated in paragraph 35 in the invitation to bid document, should the fund be oversubscribed we may reduce below £3 million the level of the cap on how much funding any successful bid might receive. This may be necessary to ensure funding for the bids to be supported comes within budget.

We will consider new courses (those that are starting in 2021-22 or later years) as demonstrating growth in student numbers.

The invitation to bid document asks providers to submit, in answering the narrative questions of the bidding form, details of courses and student numbers that are relevant to their capital expenditure proposals under each category within criterion 1. These should reflect recent or planned student number growth. For each category, the bidding document states: ‘While it is not a requirement for these student numbers to increase over time, significant recent or planned increases will score more highly.’

We are not collecting information on student numbers in a structured way as part of the bidding template. Providers should specify and quantify in the narrative part of their bids how their proposed capital project will support particular student populations relevant to the priority categories of capital expenditure for which they are bidding.

Paragraph 63 of the invitation to bid document states: ‘Irrespective of the scores for criterion 1 for each category of eligible project, we will not support a bid that scores 0 or 1 under criterion 2 (value for money, project and risk management).’ As such, any bid which scores less than 2 on criterion 2 will not be successful and will not be awarded funding. Where a bid covers multiple projects, our assessment of criterion 2 will be for the bid as a whole, not for individual projects within it.

We will accept bids only from eligible providers: that is, those registered with us in the Approved (fee cap) category. This reflects the limit of our funding powers under section 39 of the Higher Education and Research Act 2017. Consistent with this, bids that concern projects for provision to teach and support students under a sub-contractual arrangement should be submitted by the lead provider. The lead provider has responsibility for the students (and would report the students in its student data returns). This also means that the lead provider must be the one that incurs the capital expenditure and owns the capital asset.

We will be asking providers to submit monitoring returns after the end of the financial year to demonstrate that this funding has been spent in full by the deadline as per our terms and conditions of funding and detailed in the invitation to bid document (set out in paragraph 77 onwards).

Given the timescales involved, we are unable to accept bids that are submitted after the deadline.

We expect to announce the outcomes of the bidding competition in late October 2021.