The Office for Students (OfS) has received guidance from the government which sets out the Strategic Priorities Grant funding available for distribution in 2026-27.
The letter from the Department for Education (DfE) confirms £1,252 million of funding for the OfS to allocate in the financial year 2026-27. This represents a reduction of £50.9 million, compared to 2025-26.
In addition, we have received guidance on the allocation of £88 million in capital funding to be distributed to providers compared to £92 million last year. Funding to support knowledge exchange, distributed through UKRI, remains at £48 million.
The letter sets out the government’s priorities for how the OfS must distribute the funds. It explains that the funds should be used to support strategically important high-cost subjects, programmes which advance equality of opportunity and funding for world-class specialist providers. It also includes terms and conditions set by the DfE, which the OfS must adhere to when distributing the funds.
Nolan Smith, Director of Resources and Finance at the OfS said:
‘The letter from DfE has come to us later than it has previously, and we’re grateful to universities and colleges for their patience during this time, especially given the current financial pressures across the higher education sector.
‘These reductions in funding will be more sharply felt by some institutions than others. All institutions will now need to plan for how best to adjust their budgets to ensure they continue to deliver high-quality courses and resources to students.
‘We are now working at speed to ensure that we can share indicative funding allocations with institutions this week. We will then confirm funding allocations as soon as possible. We will keep universities and colleges updated as we continue this work and we will engage directly with the institutions most affected.’
Notes
- The Office for Students is the independent regulator for higher education in England. Our strategy for 2025 to 2030 seeks to ensure that students from all backgrounds benefit from high-quality higher education, delivered by a diverse, sustainable sector that continues to improve.
- The headline sum in the Strategic Priorities Grant (£1,252 million) has gone down by £50.9 million compared to 2025-26. This is a net reduction after taking into account some changes to how funding is allocated by the Department for Education. The main change relates to the funding for Higher Education Innovation Funding (HEIF) which is now being funded by a separate capital funding stream. The amount of funding remains at £48 million.
- We also plan to consult on the future approach to the Strategic Priorities Grant funding later this year, as our approach to allocating this funding has remained largely unchanged since 2012-13. This consultation will consider how the OfS implements government priorities for the funding from 2027-28 onwards.