Our capital funding supports sustainable investment in higher education learning and teaching.
We aim to enhance the learning experience of higher education students by helping raise the quality of their learning and teaching facilities.
For the financial year 2021-22 (1 April 2021 to 31 March 2022), we are allocating £150 million in capital funding:
- up to £131 million of this funding will be allocated to providers registered with the OfS in the ‘Approved (fee cap)’ category
- £19 million is set aside as provision for existing commitments and support for national facilities and regulatory initiatives.
We have recently consulted on the approach to distribution of capital funding for the financial year 2021-22. This follows a statutory guidance letter from the Secretary of State for Education, which announced capital funding of £150 million to support the government’s priorities.
We have provided an analysis of the consultation responses we received and full details on the decisions we have taken in response.
Revised approach to funding
We are modifying our approach to capital funding to reflect the responses we received from consultation. We will distribute capital funding for 2021-22 through both a small formula-based allocation of approximately £7.4 million together with a full bidding competition of approximately £123.6 million.
Providers eligible for financial support are those registered with us in the Approved (fee cap) category.
Formula-based allocations
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 £30,000 per provider.
Formulaic allocations must be used for projects which meet the priorities as set out through consultation.
How formula-based funding is calculated
Changes to the formula-based capital funding method compared to previous years are 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 have calculated capital funding using student numbers reported in the HESES20 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 £7.4 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)
- 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 2021-22 providers will have to spend their whole allocation by the end of March 2022.
Our 2021-22 formulaic capital allocations were announced in July 2021. A list of these allocations can be found in Capital funding for financial year 2021-22: Allocations and invitation to bid.
Bidding exercise
The majority of capital funding (approximately £123.6 million) will be distributed through a bidding competition open to all eligible providers (whether they have received a formula allocation or not).
The minimum threshold is £50,000. We are also setting an initial cap for funding of £3 million. Successful bids must meet the priorities as set out in consultation.
Eligible providers are invited to submit a competitive bid, following the guidance in Capital funding for financial year 2021-22: Allocations and invitation to bid.
Our aim in distributing capital funding for 2021-22 through a competitive exercise is to enhance the learning experience of higher education students at providers, and to prioritise in particular:
- 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.
- Facilities that will support the development of flexible provision and modes of delivery, including for part-time study, e-learning and blended learning.
- Capital expenditure that will demonstrate value for money.
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.
Providers wishing to submit a bid must do so using the bidding template available to them via the OfS Portal. Bids from eligible providers must be received by 1700 on 10 September 2021. We expect to announce the outcomes of the competition in October 2021.
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.
£9 million is 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.
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 teaching capital funding is monitored
Formula-based allocations
Every provider in the Approved (fee cap) category that received a formulaic teaching capital allocation must submit a short report providing assurance over how the funding has been spent.
Financial year 2020-21
Providers which received 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. 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. T
o 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.
Financial year 2021-22
Providers receiving formulaic capital funding for 2021-22 must submit a monitoring return on their expenditure after the end of the 2021-22 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 2021-22 with further guidance on how to complete the monitoring return for the year.
Bidding exercise in the financial year 2021-22
All providers that are in receipt of OfS capital funding for financial year 2020-21 following a successful bid will be required to report on their use of that funding after the end of the year and those reports may be subject to audit. Providers will be notified separately on the details of reporting requirements.
