Capital funding

We will distribute 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 financial support are those registered with us 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.

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.

How capital funding is monitored

The terms and conditions that apply to OfS capital funding for the 2022-23 financial year, including the arrangements for payment, how it may be used and monitoring arrangements are detailed in our Terms and conditions of funding for 2022-23.

All providers that are in receipt of OfS formula or bidding competition capital funding will be 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 will be notified separately.

All funding allocated through the bidding competition must be spent in full and in accordance with the terms and conditions by 31 March 2025. However, we will actively monitor spend during the period 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 is being delivered.