Ministers have told England’s funding council that it will deliver a future version of the teaching excellence framework (TEF) and also dished out a warning about the council’s quality assurance plans.

The Higher Education Funding Council for England has today received the annual , covering 2016-17.

The letter, signed off by business secretary Sajid Javid and universities and science minister Jo Johnson, is seen by some as setting out a longer than usual list of requirements from Hefce.

It confirms moves to “retarget” student opportunity funding for the poorest students in the coming year ahead of future cuts.

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Total Hefce funding will be £3.712 billion in 2016-17, projected to fall to £3.476 billion the following year.

Once projected fee income is included, the letter says, funding for universities will be £12.3 billion in 2016-17, up from £12.1 billion the previous year.

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Teaching grant will be £1.539 billion in 2016-17, down from the £1.671 billion figure in last year’s grant letter. Teaching grant is projected to be £1.457 billion in 2017-18.

The letter also addresses the government’s move to switch nursing and allied health professional students into the standard student support system, with ministers saying that they will “allocate teaching grant to the funding council to contribute to the additional teaching costs of any science-based subjects”.

Some in the sector said this meant that teaching grant would have to cover more students, at the same time as being cut.

Capital funding for teaching, which was £300 million in 2015-16, falls to £140 million in 2016-17 and is projected to fall again to £100 million the following year.

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Dave Phoenix, chair of Million+ and vice-chancellor of London South Bank University, said: “Teaching grant will continue to decline, and universities and Hefce are being asked to deliver more with less direct government investment. Ministers should now make clear that they will agree to allow fees to rise by inflation while the teaching excellence framework is being developed.”

He added: “The prime minister has rightly set challenging goals to improve access to university by those from less advantaged communities, so it is particularly disappointing that the student opportunity fund is being cut, and this goal is being undermined.”

Some of the main points made by the grant letter, addressed to Hefce chair Tim Melville-Ross, are:

• The BIS ministers “would like Hefce to take responsibility for delivering the TEF in Year 2”.
• They want Hefce to “look into the two issues of…the contractual status of academic staff and…teaching intensity/weighted contact hours across different subjects” to judge how both “could be measured and potentially feed into TEF assessments for future years”.
• Ministers also hand Hefce a warning on its decision to contract out quality assurance work, saying they would “encourage you to ensure that any new approach maintains the broader assurances that are needed to support Home Office visa activity, act as a potential gateway into TEF, and maintain the UK HE global reputation, including by maintaining compatibility with our obligations under the Bologna process. We also support your ongoing work to ensure that assurance mechanisms for England fit smoothly within a whole-UK approach.”
• Universities establishing free schools is important, the ministers say, “both in the context of efforts to widen participation and the wider context of the government’s commitment to establish more free schools. We would like the council to establish how many institutions have established free schools and how many plan to and to report to ministers on this”.
• Hefce “should continue to work closely with BIS to support implementation of the new Master’s loans scheme and design of the Doctoral loan scheme”, ministers say.
• The government “is taking forward the recommendation from Sir Paul Nurse that the seven Research Councils are brought together under Research UK”, ministers say. “We are also considering responses to the Higher Education Green Paper proposals, including on moving QR research funding to the proposed new body, Research UK”.

john.morgan@tesglobal.com