Higher Education Innovation Fund

We provide funding for knowledge exchange (KE) via the £213 million Higher Education Innovation Fund (HEIF) to support and develop a broad range of knowledge-based interactions between higher education providers (HEPs) and the wider world, which results in benefits to the economy and society.


The aim of HEIF is to create and sustain a range of KE activities in response to demand across the economy and society.

It is designed to support and develop a broad range of knowledge-based interactions between HEPs and the wider world, which result in economic and societal benefit to the UK.

In September 2019, the Universities Minister  announced a new strategic direction for university knowledge exchange funding to drive the high performance needed to deliver the government's commitment to raise research and development investment to 2.4% of GDP. This included confirmation that that the total amount of HEIF funding will increase by £25 million in 2020-21.

What HEIF supports

HEIF supports and incentivises providers to work with business, public and third-sector organisations community bodies and the wider public, to exchange knowledge and increase the economic and societal benefit from their work.

HEIF provides a strong return on investment, with £9.90 generated for every £1 of funding.

Performance-based allocation

HEIF allocations are performance based, informed by the results of the annual Higher Education Business and Community Interaction (HE-BCI) survey and other data, and underpinned by institutional strategies for KE.

Institutional accountability for use of HEIF for 2020-21

In response to the Covid-19 pandemic we have separated the reporting requirements for 2020-21 from the remainder of the new five year funding period.  As set out in RE-CL-2020-04 for the 2020-21 academic year, providers will be asked to report on their use of HEIF in 2020-21 through the 2019-20 HEIF annual monitoring process.  

Institutional accountability for use of HEIF for 2021-22 to 2024-25

In order to receive HEIF, providers must provide to us, and have approved by Research England, an accountability statement for the funding period 2021-22 to 2024-25. The statement, to be submitted by 21 May 2021, must demonstrate that:

  • The institution’s use of HEIF is led by overarching strategic objectives relating to knowledge exchange in line with Government priorities.
  • That HEIF will be used in line with overall objectives of the programme and appropriately in the context of the institution’s overall strategic approach to knowledge exchange and Government priorities.
  • The institution has a sound approach to the management of HEIF funding and to monitoring the success of activities against strategic objectives in line with delivering Government priorities.

The revised guidance document RE-P-2020-03 published in July 2020 set out the policies and priorities for HEIF for the funding period 2020-21 to 2024-25. The document (which updates HEFCE circular letter 2016/16) also provides the detailed requirements and return templates for the Accountability Statements in May 2021.  

HEIF annual monitoring

Institutions in receipt of a HEIF allocation are required to provide an annual monitoring statement (AMS) to Research England each winter. The AMS documents and updated guidance relating to the 2019-20 HEIF allocation will be issued directly to relevant HEIs in late November 2020, must be returned by midday on Friday 26 February 2021. The guidance document that supported the completion of the 2018-19 HEIF AMS return (PDF) is available.

Institutional plans to support the Industrial Strategy

In 2017-18, HEFCE made available an additional £25 million of HEIF to support the delivery of the Industrial Strategy. This was followed by Research England increasing HEIF again for 2018-19.

Because this additional funding was made available specifically for supporting the delivery of the UK's Industrial Strategy, in the spring of 2018 we called for additional plans to sit alongside the existing institutional strategies.

We have published a report which summarises uses of Industrial Strategy uplift allocations through HEIF and Industrial Strategy related developments in universities, based on evidence from the plans for HEIF submitted to Research England.


Covid-19 impact on HEIF

In April 2020 we published a circular letter to set out our expectations in relation to the use of HEIF allocations in response to the Covid-19 pandemic of 2020.  The circular letter also sets out revised accountability requirements for the 2020-21 HEIF allocation.

How do you allocate HEIF?

HEIF is allocated by formula to all eligible providers, subject to acceptance by Research England of an institutional strategy and plan for knowledge exchange.

For more detailed information see funding allocations.

How do you calculate allocations for individual providers?

To target KE funding where it can support higher education knowledge and skills to have the greatest impact on the economy and society, we only give HEIF to providers with evidence of significant KE performance and partnerships.

To judge this, we use data on the income received by an institution from its users - businesses, public and third sector services, the community and wider public - as a proxy measure for the impact of its KE activities.

We calculate allocations for individual providers by adding together their main KE income indicators. This data is collected through:

  • data that providers submit to the Higher Education Statistics Agency (HESA) in the Finance Record and Higher Education - Business and Community Interaction (HE-BCI) Record
  • data on knowledge transfer partnerships from Innovate UK.

We take account of income over a three-year period, weighted towards the latest year of performance, providing a balance between stability and dynamism.

Who makes decisions on HEIF allocations?

Decisions are made by Research England in conjunction with the Office for Students (OfS), taking into account government, UKRI and Department for Education priorities in annual grant announcements and guidance letters, and advised by the Research England Council.

Will the method for HEIF allocations in 2020-21 be different from 2019-20?

The Minister announced that there will be a fundamental review of the HEIF method that will inform allocations in the later part of the next HEIF planning period, which runs from 2020-21 to 2024-25. RE-P-202-03 makes it clear that there will be continuity in 2020-21 with the method set out for the last planning period, 2016-17 to 2020-21, in HEFCE circular 2016/16. The approach to allocations will consider the use of the additional £25 million being made available to support the delivery of the Industrial Strategy from 2020-21 onwards.

Why are you reviewing the HEIF method?

Our decision to review the funding method reflects that we have made good progress to develop the KEF as a more accurate approach to measuring KE performance, which is the focus of the HEIF allocation method; and our progress has been noted by Government as meeting government priorities. It also reflects that the HEIF method has not been the subject of full consultation since its inception in 2006.

There have also been various incremental changes to the method over time to address specific policy priorities, and the review gives us an opportunity to look at the best means to address all these. A new method will also allow us to consider how to address new policies, for example how to give greater attention to student contributions and benefits, which is the subject of our current joint call with OfS.

How will a new HEIF method be developed, and when?

The approach is likely to include: a review of the principles and strengths and weaknesses of the current method; consideration of any new government, UKRI and OfS priorities and availability of funding; construction of a new method based on a further developed KEF; and full consultation. RE and OfS intend to use the new method to make HEIF allocations within the later part the next planning period which runs from academic year 2020-21 to 2024-25.

What are HEIF five year strategies?

In August 2016, HEFCE asked providers eligible for HEIF to complete an institutional five year strategy. These strategies, together with an overview report, may be found on the HEFCE website.

RE-P-2020-03 sets out the change from five-year strategies to Accountability Statements, reflecting our expectation that the information to be submitted through the KEF and KE Concordat will   become embedded to enhance accountability and assurance further over the planning period.

Is there a cap on individual allocations?

Yes. There is a cap on individual allocations so that no one institution receives a level of funding that disadvantages others. Where there is evidence that the cap is a constraint on an institution's support of economic growth, we provide a supplement to enable their KE strategies to be enhanced. The supplement is based on the providers shares of qualifying income (calculated according to the main KE allocation method).

How often are allocations re-calculated?

Allocations are re-calculated annually based on the latest data and to reward recent performance. But we also moderate year-on-year changes to give providers a level of predictability so that they can draw up five-year KE programmes.

How do you work with the Office of Students?

Although we provide most of the HEIF from our budget for supporting KE, a proportion of it is provided by the Department for Education from its budget for teaching in higher education providers. We therefore work with the Office for Students, which oversees teaching funding, to support its evaluation of the teaching and student elements of HEIF and to ensure joint agreement of strategic objectives and the criteria for HEIF funding that reflect the teaching elements of KE.

Read about the joint call from Office for Students and Research England.