To: Heads of Research England-funded higher education providers
Reference: RE-CL-2024-06
Publication date: 29 July 2024
Enquiries to: annualfunding@re.ukri.org
Dear Vice-Chancellor or Principal
This letter sets out our budget decisions on Research England’s funding streams for higher education providers (HEPs) for the academic and financial year 2024 to 2025. Capital funding is allocated by financial year from April to March, and all other formula-based funding is allocated by academic year from August to July.
Decisions on funding are delegated from the Chief Executive Officer of UK Research and Innovation (UKRI) to me as Executive Chair of Research England. The Executive Chair acts with the endorsement and support of the Research England Council.
Guidance from the Department for Science, Innovation and Technology (DSIT)
Alongside this letter, we publish the specific guidance UKRI has received from the Department for Science, Innovation and Technology (DSIT). This sets out the government’s priorities and budget allocations for Research England in financial year 2024 to 2025.
Our settlement from DSIT is in line with the indicative budgets provided in 2022 and 2023, adjusted for some movement of funds between financial years that does not affect our academic year budgets. The balance of dual support funding continues to be maintained at around 64p in the pound across the current funded period.
Budget decisions for 2024 to 2025
The budget allocations received from DSIT have allowed us to maintain our recurrent formula funding budgets and provide stability for the sector. Following endorsement by the Research England Council, we have set budgets for:
- research and knowledge exchange for the 2024 to 2025 academic year (tables 1 and 2)
- capital grants for the 2024 to 2025 financial year (table 3)
Research and knowledge exchange funding for academic year 2024 to 2025
In making budget decisions for the 2024 to 2025 academic year we have assumed that the funding we receive will continue for financial year 2025 to 2026. This includes our allocations from DSIT, and funding from the Department for Education to support the Higher Education Innovation Funding programme (HEIF).
Any significant future changes to our funding by government could affect the funding we are able to distribute to HEPs in the 2024 to 2025 academic year, and this may include revising allocations after they have been announced.
We also reserve the right to make retrospective revisions to allocations for 2023 to 2024 and earlier years if there is specific need, for example if we find that terms and conditions of grant have not been met or that formula allocations have been informed by incorrect HEP data.
Table 1: academic year budgets for research and knowledge exchange funding
| Research funds | 2023 to 2024 (£ million) | 2024 to 2025 (£ million) |
|---|---|---|
| Quality-related research (QR) | 1,981 | 1,986 |
| Policy Support Fund | 29 | 29 |
| Enhancing Research Culture | 30 | 30 |
| Participatory Research | 6 | 6 |
| Specialist Provider Element | 20 | 20 |
| National facilities and initiatives | 55 | 86 |
| School of Advanced Study and Institute of Zoology | 11 | 13 |
| Total academic year research funding | 2,132 | 2,170 |
| Knowledge exchange funds | 2023 to 2024 (£ million) | 2024 to 2025 (£ million) |
|---|---|---|
| HEIF formula funding | 260 | 260 |
| HEIF business and commercialisation supplement | 20 | 20 |
| Research England Development (RED) fund | 20 | 20 |
| Connecting Capability Fund-RED (CCF-RED) | 28 | 28 |
| Total academic year knowledge exchange funding | 328 | 328 |
| Total academic year funding | 2023 to 2024 (£ million) | 2024 to 2025 (£ million) |
|---|---|---|
| Total research funding | 2,132 | 2,170 |
| Total knowledge exchange funding | 328 | 328 |
| Total academic year funding | 2,460 | 2,498 |
Notes for table 1
Figures may not add up to the total due to rounding differences.
Table 1 excludes short-term financial year budgets DSIT allocated to Research England during 2023 to 2024 for Regional Innovation Fund (£49 million) and International Science Partnerships Fund (ISPF) institutional support grant official development assistance (ODA) funding (£26 million for 2023 to 2024, and £21 million for 2024 to 2025).
Funding for research
Budgets for the separate elements of QR are being maintained at their 2023 to 2024 levels, except the QR Research Degree Programme (RDP) supervision fund, which is increasing as shown in table 2. This recognises Research England’s mission to create and sustain the conditions for a healthy and dynamic research and knowledge exchange system in English HEPs.
Table 2: academic year budgets for individual elements of QR funding
| Elements of QR funding | 2023 to 2024 (£ million) | 2024 to 2025 (£ million) |
|---|---|---|
| Mainstream QR research funds (including London weighting) | 1,303 | 1,303 |
| QR RDP supervision funds | 339 | 344 |
| QR charity support fund | 219 | 219 |
| QR business research element | 114 | 114 |
| QR funding for national research libraries | 7 | 7 |
| Total QR funding | 1,981 | 1,986 |
Notes for table 2
Figures may not add up to the total due to rounding differences.
As confirmed in 2023, we will maintain the Policy Support Fund, Enhancing Research Culture fund and Participatory Research fund across the funded period. This will enable HEPs to continue existing work and develop longer term initiatives to address these important aspects of research activity.
Specialist Provider Element funding also continues for the final year of the £80 million package, across five years, announced by the government in the March 2020 budget.
The QR RDP supervision fund and Enhancing Research Culture funding will be distributed differently from our usual processes in 2024 to 2025 as described in our circular letter issued on 27 June 2024.
Funding for knowledge exchange
We have maintained our main HEIF formula funding at £260 million, as shown in table 1. This includes £48 million contributed by the Department for Education to support student and teaching elements of knowledge exchange through HEIF, which we expect to be confirmed annually.
The HEIF funding method, weightings and modifiers are expected to remain the same as in 2023 to 2024. We have undertaken work to update our policy on the criteria for HEP eligibility for knowledge exchange funding. We will consider implementation as part of further review work and confirm our approach in due course.
Two funding streams were initiated in 2022 to 2023, in response to government policy guidance for the spending review period to increase funding for activity supporting commercialisation and university-business collaboration. These are being maintained as expected:
- the HEIF business and commercialisation supplement (issued in addition to the main HEIF formula funding) will continue to be allocated on the basis outlined in November 2022
- funding for the Connecting Capability Fund (CCF) programme agenda of support for scale and collaboration in commercialisation is being allocated through Research England Development (RED) Fund processes
Capital funding for financial year 2024 to 2025
The budget for the Research Capital Investment Fund (RCIF) has increased slightly, in line with indicative budgets published in 2023. This is shown in table 3.
We provide capital grants on a financial year basis, so capital grants for 2024 to 2025 must be spent in full by March 2025.
Capital developments funded under the seventh round of the UK Research Partnership Investment Fund (UKRPIF) are now underway, and the profile of funding has been adjusted to reflect their needs.
Table 3: financial year budgets for capital funding
| Research Capital Investment Fund (RCIF) | 2023 to 2024 (£ million) | 2024 to 2025 (£ million) |
|---|---|---|
| HEI Research Capital England | 113 | 120 |
| Higher Education Research Capital (HERC) England | 107 | 113 |
| Total RCIF | 220 | 233 |
| Capital funding | 2023 to 2024 (£ million) | 2024 to 2025 (£ million) |
|---|---|---|
| National facilities and initiatives | 5 | 5 |
| UKRPIF | 7 | 77 |
| RCIF | 220 | 233 |
| Total capital funding | 232 | 316 |
Notes for table 3
Figures may not add up to the total due to rounding differences.
Further information
Following a period of consultation, an updated set of terms and conditions for 2024 to 2025 will be published on 1 August 2024.
We plan to publish HEPs’ formula grant allocations for 2024 to 2025 in September 2024.
As outlined in our circular letter issued on 27 June 2024, we will pay HEPs in August and September 2024 based on amounts paid in August and September 2023 for the following funds:
- QR funding
- HEIF
- RCIF
An explanation of our allocation methods for formula funding streams can be found in our publication ‘Research England: how we fund higher education providers’, noting the exceptions for 2024 to 2025 described in our circular letter issued on 27 June 2024.
Any questions about this letter should be addressed to annualfunding@re.ukri.org
Specific questions about research or knowledge exchange funding should be addressed to researchpolicy@re.ukri.org or kepolicy@re.ukri.org respectively.
Yours sincerely
Professor Dame Jessica Corner FMedSci, MAE, RN
Executive Chair, Research England