Much has changed in England over the last five years: the higher education ‘market’ has opened up to new providers, the student number control cap on expansion has been removed for publicly funded higher education institutions, and a transition from block grant-based funding to student loan-based funding of teaching has taken place. 


We expect tough constraints on public funding to continue over the next five years as a new Government seeks to reduce the country’s deficit. This means higher education providers will need to be even more agile and innovative, increasingly efficient, and prepared to collaborate with a range of (new) partners in the UK and overseas if they are to achieve and sustain excellence and ensure their own financial future.

It is in this context that we are today launching our Business Plan for the next five years. The plan aims to strike a balance between continuity and the need for new or re-focused activity. Both elements are required to support a dynamic, world-leading higher education sector. Our work over the period of this Business Plan will be underpinned by our expertise in data analysis, modelling, synthesis and interpretation of evidence, and by continuing to develop our extensive knowledge of the higher education sector. We will continue to work closely with a range of other organisations in the sector to effectively meet our objectives.

Below I would like to highlight some of the major areas of work for HEFCE in the next five years.

Research lies at the heart of the sector’s success and international reputation. The recent results of the 2014 REF are absolute testament to this. We have put in place a considerable programme of evaluation, which will be fed back to the sector and other stakeholders in March of this year. This work will be critical in informing our discussions with Government about our future research policy.

Teaching and learning are also fundamental to our world-leading sector, and teaching excellence must be a major priority within this. Over the coming year we will explore with the sector how we might build better ways of capturing excellent educational outcomes, and refining existing indicators of students’ learning experiences and progression to employment or further study. We will also make appropriate changes to the National Student Survey after consultation and careful piloting.

Universities and colleges are major contributors to inter- and intra-generational social mobility. They enable individuals from all backgrounds to achieve their full potential as citizens, as professionals, and as highly skilled and valued employees. We have seen significant progress in the last five years in improving access to higher education from under-represented groups.

But there is still more to do. Continuing the improvement in participation from all under-represented groups, and eliminating unacceptable disparities in achievement and progression outcomes are important objectives on which HEFCE will continue to lead. We have commissioned a critical review of the available literature and existing practice around interventions that close the differential gap in degree outcomes and in success in obtaining graduate jobs for students from certain ethnic backgrounds and lower socio-economic groups. This will be a first step in what will be a major focus for the use of Student Opportunity funding in the future. Alongside this, we are working with a group of economists and a sample of institutions in order to define sharper measures of return on investment for Student Opportunity funding.

Continuing the theme of social mobility, access to postgraduate study – particularly in the light of changes to undergraduate tuition fees in 2012 – is a major concern for us. Through our Postgraduate Support Scheme, we supported 20 projects in the 2014-15 academic year, piloting different approaches to supporting students to progress to postgraduate education; in 2015-16 we’ll provide £50 million to universities, who will match our funding to provide 10,000 scholarships of £10,000 for postgraduate students.

Knowledge exchange remains a major priority for both HEFCE and the Government, reflected in the recent Science and Innovation Strategy. Over the coming year, we’ll be working with Government to explore options for future funding to support higher education innovation. We will also be working closely with universities and colleges to support their engagement with Local Enterprise Partnerships and Combined Authorities, developing a programme of work which seeks to develop further the critical role that universities and colleges play as ‘anchor institutions’ in their locality.

A successful and sustainable sector which embraces many different types of competing provider requires intelligent regulation to retain its reputation. Our work in this area is gathering pace: we are working very closely with Government in relation to the entry of alternative providers to the higher education sector. We’re working with the sector to explore how we might work together to improve student protection in the face of course closure or institutional failure. And fundamentally we are working with BIS, Universities UK and others on the building blocks of future legislation to ensure that we have a risk-based, proportionate, and comprehensive regulatory system in place fit for the future. And we have just launched a deep discussion with the sector, students and stakeholders as to how quality assessment arrangements should evolve if they are to support and recognise excellent teaching and learning and retain their fitness for purpose in a rapidly changing, increasingly diverse higher education landscape.

Finally, we will continue to work with higher education institutions to ensure that they are managed on a financially sustainable basis. We will work with the sector to continue their strong record for delivering efficiencies while maintaining high-quality teaching and research.