Hefce funding for 2010/11

Thursday, 18 March 2010

Dear colleagues,

You may have seen reports of Hefce's funding for higher education for 2010/11 and be concerned that Reading has suffered disproportionately. I would like to reassure you that funding for the University is in line with our expectations and accords with the financial forecasts for the coming year.  

If you recall, last year's funding letter from Hefce included a moderation payment for one year only of £3.7 million, which related to the Research Assessment Exercise 2008 (RAE). Since then, we have been planning on the basis of the loss of this funding. For 2010/11, the removal of this payment from our funding agreement makes up a very large part of the £4.2 million reduction in our total Hefce funding.

The moderation payment was designed to cushion us from the year one impacts of the changes in the QR funding stream for different units of assessment in the RAE. In a number of units, for example, our research excellence and improved performance was rewarded by funding cuts, while we performed disappointingly in units where funding pots were increased. The payment was intended by Hefce to help us reduce our costs and we are using it in this way. For example, it will be available to the Restructuring Committee with regard to potential job losses or for bringing forward retirements, as appropriate.

Now that we have had our financial forecasts confirmed by the funding letter, the completed three year plans will be circulated to Schools and Departments. These plans will be funded in the expected way.

The work of the Reshaping project derives from our financial forecasts and will continue over the next two years in order that we meet our target of running at a deficit for only a further two years and to ensure we are in a stronger position in time for the 2014 Research Excellence Framework. To date we have identified savings of £9 million towards the minimum £10.6 million savings we require but there is still work to be done.

While we can be reassured today that our financial planning is in line with funding allocations, it would be wrong to overlook what will be a potentially difficult period ahead.  We face the prospect of three Government budgetary announcements in the next six months and considerable political uncertainty with regard to higher education.

We have worked hard to adapt the University to the harsher economic climate in which we now have to operate. There is a clear need for prudent planning and playing to our strengths to ensure we emerge from this period in a stronger position, with an enhanced reputation as a leading, research-intensive centre of excellence for scholarship, teaching and learning.

Funding detail

Total Hefce funding 2009/10                                             £54,971,318

Total funding 2010/11                                                       £50,699,816

Reduction in funding                                                          £4,271,502 (7.7%)

Moderation payment component of funding reduction            £3.7 million

Without the moderation funding element, the University's reduction in Hefce funding would be 0.8%, placing us in the middle range of universities affected by funding cuts.

Professor Gordon Marshall

Vice Chancellor