Capital funding for directly funded further education colleges for the financial year 2010-11

Dear Principal

1.   This letter sets out the allocation of capital funding for learning and teaching infrastructure in further education colleges (FECs) funded directly by HEFCE for the financial year 2010-11.

2.   A total of £11.2 million is available through these allocations for 2010-11, for activity undertaken from now until March 2011. These funds will be paid automatically in four equal instalments in July 2010, August 2010, November 2010 and February 2011.

Purpose of the funds

3. The allocations for 2010-11 are to help raise the quality of higher education (HE) learning and teaching facilities in FECs, in order to enhance the learning experience of their HE students. We expect colleges to use the funds in ways that will support their strategy for HE most effectively. The funds may be used to contribute towards:

• investment in equipment, particularly IT-related equipment, used in learning and teaching, and in e-learning
• replacement of premises for learning and teaching
• refurbishment of existing teaching spaces, particularly with regard to IT-related enhancements, including improvements to internal IT networks or supporting infrastructure.

4.   The funds should be used for HE provision and may be subject to audit in the normal way. We recognise, however, that it may be neither feasible nor desirable to construct ring-fenced boundaries between higher and further education (FE). For example, equipment may be used by both HE and FE students. So we look to colleges to adopt a pragmatic approach, whereby the primary focus of the projects is on HE even if there are links with, and spin-off benefits at the margin for, FE.

Eligibility and allocation method

5.   This is not a competitive bidding process. All directly funded FECs that meet the conditions in paragraphs 7 and 8 will receive an allocation.

6.   Previously, in allocating capital funds to colleges, we have adopted a formula method for distributing funds that was consistent with our wider policies for funding FECs. These aim to encourage collaboration between institutions, while supporting diversity of provision. We want to discourage small, isolated pockets of HE, and to help develop stronger HE portfolios in the larger HE providers and where there are networks between HE providers. We have decided to continue to use the same method for distributing these capital funds.

Allocations and payment of funds

7.   The allocations for each directly funded FEC are at Annex A. They are based on:

• 2009-10 resource for mainstream and non-mainstream provision
• 2009-10 Training and Development Agency for Schools initial teacher training resource
• 2009-10 widening participation allocations (including the efficiency saving)
• 2009-10 teaching enhancement and student success allocations (including the efficiency saving)
• 2009-10 targeted allocations (including the efficiency saving).

8.   The total resource has been weighted according to the size of the college, based on 2009-10 full-time equivalent (FTE) students. Thus FECs with 800 or more directly funded HE FTE students will receive twice the rate of funds per FTE allocated to colleges with fewer than 800 FTEs. Colleges with fewer than 100 directly funded HE FTE students can access the funds, provided that they are developing their HE activity in collaboration with other FECs and/or higher education institutions so that the aggregate HE provision is at least 100 FTE places. We have set a threshold of £1,000 per year as the minimum for any college.

9.   We shall request a monitoring return for the full year's funding from colleges in April 2011, reporting on the use of these funds. These returns may be subject to audit. In the event that we are not satisfied that the funds have been used for the purposes described in paragraph 3 we may seek to reclaim some or all of the funding provided.

10.   We expect colleges to take account of the need to reduce carbon emissions – as well as securing value for money – in making decisions about how these funds are spent.

Yours sincerely

Sir Alan Langlands
Chief Executive

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