We are currently consulting on the approach to capital funding for financial year 2021-22. This follows the Department for Education’s guidance letter which has made available £150 million in capital funding for the Office for Students to distribute. This consultation sets out our proposals for the distribution of capital funding to providers.
Read more about the capital funding consultation and how to respond.
Our capital funding supports sustainable investment in higher education learning and teaching.
For the financial year 2020-21 (1 April 2020 to 31 March 2021), we are allocating £150 million in formula teaching capital funding:
- up to £140 million of this funding is being allocated to providers registered with the OfS in the ‘Approved (fee cap)’ category
- £10 million is provided to Jisc to support information technology infrastructure.
In March 2020, we announced allocations of £136 million, made to those providers that were registered in the ‘Approved (fee cap)’ category on 17 March 2020.
The balance was set aside as provision for providers that may join the OfS Register in this category before the end of the financial year (31 March 2021), and to support development costs for the Higher Education Statistics Agency's (HESA's) Data Futures programme.
Teaching capital
Capital grants are made to higher education providers registered with the OfS in the Approved (fee cap) category.
Teaching capital allocations are provided to enhance the learning experience of higher education students, by helping raise the quality of their learning and teaching facilities.
Providers might use their grants to invest in high-quality buildings, equipment or information technology and e-learning.
How funding is calculated
We have calculated capital funding using:
- student numbers reported in the HESES19 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
- methods agreed by our board in March 2020.
Providers receive a share of the £140 million budget 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)
- higher costs associated with students studying in London
- 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.
Capital grants are made for (and have to be spent within) a specific financial year. For 2020-21 providers will have to completely spend their allocation by the end of March 2021.
Our 2020-21 capital allocations were announced in March 2020. A list of these allocations can be found in ‘Formula capital funding for 2020-21’.
Other capital grants
We are providing £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.
Release of additional capital funding for 2020-21
In October 2020, we consulted on the allocation of an additional £10 million of capital funding made available by the Department for Education for the financial year 2020-21.
On 18 November 2020, in the light of responses to consultation, we published our initial decisions on the approach to distributing £10 million of additional capital funding for 2020-21. The bidding exercise for additional capital funding closed on 30 November 2020, with provisional awards announced to successful providers in January 2021. A list of these allocations can be found in Additional recurrent and capital funding for 2020-21 and monitoring of medical and dental intake targets: Outcomes of consultation.
We will seek assurance from providers receiving this additional capital funding that it has been used for the purposes intended. To minimise burden, we will monitor the use of this additional grant alongside our annual monitoring of formula capital funding for the financial year 2020-21 as set out below.
Funding for previous years
For the financial year 2019-20 (1 April 2019 to 31 March 2020), we allocated £90 million in formula teaching capital funding.
Teaching capital
Teaching capital grants were made to higher education providers registered with the OfS in the Approved (fee cap) category.
Teaching capital allocations were provided to enhance the learning experience of higher education students, by helping raise the quality of their learning and teaching facilities.
Providers could use their grants to invest in high-quality buildings, equipment or information technology.
Providers received a share of the £90 million budget in proportion to weighted student FTEs.
We used providers' weighting factors that reflected those broad characteristics of their students which give rise to additional capital costs, including:
- course characteristics and associated teaching costs
- level of study (undergraduate or postgraduate)
- higher costs associated with students studying in London
- 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.
Capital grants were made for (and had to be spent within) a specific financial year. For 2019-20, providers had to completely spend their allocation by the end of March 2020.
Our 2019-20 capital allocations were announced in March 2019, and subsequently updated in July 2019, October 2019 and March 2020.
A list of these allocations can be found in ‘Formula capital funding for 2019-20’.
Other capital grants
We also provided £10 million to Jisc to support network upgrades, cybersecurity and learning analytics
For the financial year 2018-19 (1 April 2018 to 31 March 2019), we allocated £150 million in capital funding.
Teaching capital
Teaching capital grants help providers develop and improve their higher education infrastructure.
Providers might use their grants to invest in high-quality buildings, equipment or information technology.
Providers received a share of the £104 million budget based on their share of teaching resource (which comprises our recurrent teaching grant and an assumption of their income from tuition fees). But providers only receive a capital grant if their share will be at least £10,000.
Capital grants are made for (and have to be spent within) a specific financial year. For 2018-19 providers will have to have completely spent their allocation by the end of March 2019.
Our 2018-19 capital allocations were announced in May 2018.
A list of these allocations can be found in ‘Recurrent and formula capital funding for 2018-19’. We published a revised version of Annex A to this document in October 2018 to show updated allocations for some providers (including to capital grants). Changes arose from amendments to their student data and for other reasons.
Other capital grants
We also provided:
- £10 million to Jisc to support network upgrades, cybersecurity and learning analytics
- £36 million to meet the costs of commitments made by HEFCE that extend beyond March 2018.
How formula teaching capital funding is monitored
Every provider in the Approved (fee cap) category that received a formula teaching capital allocation must submit a short report providing assurance over how the funding has been spent.
Monitoring for teaching capital funding allocated in the 2018-19 financial year was completed in February 2020.
Monitoring for teaching capital funding allocated in the 2019-20 financial year was originally planned to run in February 2021. However, in response to the challenges that providers continue to face during the coronavirus pandemic, we will now not request such a report.
All providers receiving formulaic capital funding for 2020-21 must submit a monitoring return on their expenditure in late 2021, after the end of the 2020-21 financial year. This will provide us with assurance that the funding has been used for the purposes given, and an understanding of the impact of the capital grant at individual providers. We will write to you following the end of the financial year 2020-21 with further guidance on how to complete the monitoring return for the year.
For providers receiving additional capital funding in 2020-21, following submission of a successful bid, we will monitor that the funding has been used for the purposes intended. To minimise burden, we will monitor the use of this additional grant alongside our annual monitoring of formulaic capital funding for the financial year 2020-21
