Circular Letter

2 July 2019

Funding for higher education institutions for 2019-20

Dear Vice-Chancellor or Principal,

  1. This circular letter sets out our decisions on recurrent funding for higher education institutions for the academic year 2019-20, and on capital funding for the financial year 2019-20.

  2. Decisions on funding are delegated from the Chief Executive Officer of UK Research and Innovation to me as Executive Chair of Research England*. The Executive Chair acts with the endorsement and support of the Research England Council.

  3. Alongside this letter we have published Annex D of the allocations letter to UK Research and Innovation from the Department for Business, Energy and Industrial Strategy, which sets out the overall budgets and government priorities for Research England in financial year 2019-20.

  4. Revised terms and conditions of the Research England grant are currently under consultation, with a deadline for responses of 8 July 2019. The final terms and conditions applicable to funding provided to higher education institutions for the 2019-20 academic year will be published on our website before 31 July 2019.

  5. We will notify institutions individually of their recurrent and formula capital grants for 2019-20 on 24 July 2019, with all allocations and associated details embargoed until publication on 26 July 2019.

  6. Unless specified otherwise, all figures in this letter relate to academic years (August to July).

1 Research England is a council of UK Research and Innovation, a non-departmental public body with responsibility for research and innovation funding in the UK, established by the Higher Education and Research Act 2017.

Budget decisions for 2019-20

  1. Annex D to the UK Research and Innovation allocations letter confirmed the funding available to Research England for the 2019-20 financial year (April to March). The annex also identified the policies and priorities that should underpin our approach to funding.

  2. In the light of that annex, and with endorsement of the Research England Council, we have set budgets for recurrent grant and funding for national facilities and initiatives for the 2019-20 academic year (Table 1) and budgets for formula capital grant for the 2019-20 financial year (Table 2). Further detail about these allocations is provided below.

  3. In making budget decisions for the 2019-20 academic year, we have made a modest assumption for the value of recurrent research funding for financial year 2020-21. Any future changes to the grant made available by Government could affect the funding we are able to distribute to institutions in the 2019-20 academic year, and this may include revising allocations after they have already been announced.

  4. We will not change the previously announced 2018-19 academic year recurrent grant allocations for research and knowledge exchange. However, we reserve the right to revise allocations for other reasons, for example if we find that terms and conditions of grant have not been met or that formula allocations have been informed by incorrect institutional data.

Table 1: Recurrent grants and funding for national facilities and initiatives for the 2019-20 academic year compared with 2018-19

Element of grant

Academic year budgets (£M)



Recurrent research (including GCRF)



of which funding for national facilities and initiatives



Strategic Priorities Fund



Recurrent knowledge exchange



Total non-capital grants



Note: Figures exclude funding for the Connecting Capability Fund, the Research England Development Fund, and University Enterprise Zones.

2019-20 recurrent funding for research

  1. The budget for mainstream quality-related research (QR), together with its London weighting element and excluding GCRF, will be increased by £45 million from £1,050 million to £1,095 million in 2019-20.

  2. We have again separately identified the allocation from the Global Challenges Research Fund, for investment in cutting-edge research that addresses the challenges of economic development and wellbeing faced by developing countries (as listed on the Organisation for Economic Co‑operation and Development’s Development Assistance Committee’s list of eligible countries). The 2019-20 allocation of £68 million represents a £10 million increase from the previous allocation of £58 million. Funding is subject to the individual HEI-level strategies having been approved in 2018.

  3. The other separate streams within recurrent research funding will be maintained in cash terms at the same levels as for 2018-19. These are:

  • £260 million for QR research degree programme (RDP) supervision funding
  • £204 million for QR charities research
  • £64 million for QR business research
  • £7 million for national research libraries.
  1. There will be no change to the funding allocation method for QR, except for an adjustment to the subject cost weighting for UOA 4: Psychology, psychiatry and neuroscience from 1.42 to 1.6. The revised weighting will be applied within the mainstream QR funding method and QR RDP supervision funding.

  2. Funding for national facilities and initiatives has been increased from £23 million to £46 million primarily to support the launch of two new funding streams - Expanding Excellence in England (E3) and the International Investment Initiative (i3). Funding has also been maintained to support emerging priorities.

  3. Research England first allocated an element of the UK Research and Innovation Strategic Priorities Fund to higher education institutions in March 2019. £16 million was distributed to institutions in proportion to their 2018-19 quality-related research (QR) funds (excluding GCRF), with the aim of investing in new interdisciplinary programmes and to help solve pressing public policy challenges. For 2019-20, the budget allows for £29 million though the method of allocation is yet to be decided.

  4. The Department for Education (DfE) Higher Education teaching budget allows for £11 million to be allocated to the School of Advanced Studies (SAS) and the Institute of Zoology (IoZ). Following a review of funding for these institutions, funds will continue to be provided for 2019-20. This amount is not included in Table 1.

  5. Looking forward to the UKRI Open Access review we note that the Research Councils have confirmed their £24 million block grant allocation for 2019-20 and that the QR increase in Table 1 provides an additional mechanism to support any attribution across the sector of the costs of open access, including transformational open access agreements proposed by Jisc Collections as the university negotiator. Such arrangements are a key element in developing a cost-effective publications system for the English HE sector as a whole.

2019-20 funding for knowledge exchange (KE) through the Higher Education Innovation Fund (HEIF)

  1. The total recurrent formula allocations for knowledge exchange in 2019-20 allocated through the Higher Education Innovation Fund (HEIF) will be maintained in cash terms at £210 million. This total includes £47 million which is provided from the Office for Students’ teaching grant to support student and teaching elements of KE through HEIF. The method of allocation of which has been agreed with the Office for Students.

  2. For the 2019-20 allocations, the funding level is flat compared to 2018-19. As a result, the top cap to main allocations remains unchanged at £3.895 million for each institution and the annual moderator returns to a +10 per cent maximum year-on-year increase.

2019-20 formula-based research capital grants

  1. The annex to the allocations letter from BEIS to UK Research and Innovation shows total formula-based capital grants of £204 million. The Executive Chair has agreed research capital grant budgets for 2019-20 as shown in Table 2.

Table 2: Formula-based Research Capital grants for 2019-20 financial year

Element of grant

2019-20 Budget (£M)

Formula-based research capital


National facilities and initiatives


Total capital grants


Note: Figures exclude funding for the Research England Development Fund and University Enterprise Zones.

  1. We provide capital grants on a financial-year basis and thus require capital grants for 2019-20 to be spent in full by March 2020. We will announce the distribution to institutions of formula-based research capital allocations alongside the detail of recurrent allocations in July. Our general approach is to keep changes to the formula method to a minimum. We will therefore implement the following:

    • Formula-based research capital will continue to comprise two separate elements:
      1. ‘HEI Research Capital England’, totalling £96 million, will be allocated in proportion to 2017-18 and 2018-19 recurrent QR funding and research income (for 2016-17 and 2017-18) from other selected (non-Research Council) sources.
      2. ‘Higher Education Research Capital (HERC) England’, totalling £87 million, will continue to be allocated in proportion to research income from Research Councils, reflecting finance data for the most recent three years.

Further information

  1. Any questions about this letter should be addressed to Questions about research or knowledge exchange specifically should be addressed to or respectively.


Yours sincerely

David Sweeney
Executive Chair