Department for Education (DfE): Guidance to the Office for Students from the Secretary of State for Education on the allocation of Strategic Priorities Grant funding for the 2024-25 Financial Year

The letter from the Secretary of State for Education Gillian Keegan to the Office for Students (OfS) announces the Strategic Priorities Grant (SPG), distributed to institutions in England to support work in areas such as high-cost subjects, degree apprenticeships, equality of opportunity and technical qualifications. It also lays out government priorities for how the fund should be allocated.

The full guidance letter can be found here

At-a-glance:

• The SPG has increased by £2 million in 2024-25 to £1.456 billion 
• Funding to strategically important high-cost subjects (A to C1.1), including medicine, dentistry, nursing, engineering and IT, will increase by at least £18 million
• Funding will be held at the current level of £16.7 million for high-cost subjects (C1.2), such as performing and creative arts and media studies
• The postgraduate taught supplement, which will be cut by £5 million; and the intensive postgraduate provision, which will be cut by £10 million; will only be allocated to strategically important high-cost subjects 
• At least £24 million of funding will be allocated to institutions for degree apprenticeships. Providers will bid for the funding. If sufficient bids are not received, the OfS may re-allocate funding 
• At least £16 million will be allocated for Level 4 and 5 (eg HNC, higher apprenticeships, HNDs) study 
• The Student Premium funding allocation will increase by at least £5 million. The allocation for student transitions and mental health will be protected at the 2023-24 level of £15 million
• Uni Connect £30 million funding has been cut by £10 million 
• The total budget for National Facilities and Regulatory Initiatives has been cut by £3 million 
• As part of the NHS Long Term Workforce Plan, there will be additional medical places from autumn 2024. The budget for these 205 places, and for the 200-place medical degree apprenticeship pilot, will be no less than £2 million.

Implications for governance:

While there may be some relief that the total SPG for 2024-25 has not fallen, an increase of 0.1 per cent at a time when inflation is significantly higher, means a real term cut in funding. For universities generally, but particularly for those in serious financial difficulty, this offers little respite.

While some strategically important areas will see a boost in funding, other programmes are subject to significant cuts.

Funding for strategically important high-cost subjects, including medicine, dentistry and nursing, receives a lift of £18 million. 

The regulator has also been instructed to allocate at least £24 million of funding to degree apprenticeships in the government’s bid to increase their provision across the sector.

Governing boards have been and will be involved in discussions about the extent to which institutions embrace this potential addition to their portfolios. As a recent Advance HE governor view highlights, the provision of high-quality degree apprenticeships, in partnerships with industry and businesses, can involve significant challenges.

The Secretary of State for Education wants to see a focus on “targeting new providers who have not delivered degree apprenticeships to date” and on developing apprenticeships in careers which offer few currently, both of which may present some institutions with new funding possibilities.

She also wants improved access to groups who do not typically take up apprenticeship opportunities. Recent figures show that the number of students from lower economic backgrounds taking up degree apprenticeships is small. 

Funding is also available to increase the uptake of Level 4 and 5 provision, which remains low compared to other levels of study. The letter points out that the UK is an “international outlier” in the relative proportion of learners taking these courses, despite employer demand and “positive earnings outcomes for students that can, in some cases, be better than degree-level study”. 

The government wants to see more providers offer more students its Higher Technical Qualifications (HTQ). There are currently 170 qualifications available on offer at over 140 providers.  At least £16 million is allocated to “build capacity among providers with eligible learners on Level 4 and 5 qualifications via a formula allocation, which will be uplifted for learning on HTQ courses.  

Citing cost-of-living pressures, more funding has also been made available for Student Premiums and investment in student transitions and mental health has been maintained. Governors will note that the letter says the funding should help providers to develop their “mental health and suicide prevention strategies”. 

Alongside these modest funding boosts, there are some cuts, however. The Uni Connect programme, aimed at widening access to HE by supporting disadvantaged students through raising aspiration and attainment, faces a funding cut of £10 million, a third of its current £30 million pot. 

The decreased allocation follows the recent Public First evaluation of the scheme. It calculated that every £1 spent by the programme led to between £5 to £9 of economic benefit but concluded that the programme could be more consistently effective and impactful.

Some higher education organisations have criticised the cut, warning that it will destabilise collaborative outreach and could derail the Office for Students’ own regulatory objectives for equality of opportunity in English HE.

Governing boards may want to consider the implications of the Uni Connect cuts on their institution’s widening participation partnership work and what the consequences of this might be for its access and participation plans.

University groups have raised concerns about the freeze in funding to creative arts subjects and a shift in postgraduate funding from subjects generally to STEM. They said that the continued focus on STEM subjects could mean that other provision – such as the arts and humanities – will suffer. Universities UK expressed disappointment in the settlement and warned that institutions “urgently need investment in teaching”.

At a time of budget constraints, university leaders and governors will need to consider what areas of provision they need to prioritise and protect, and how to manage any funding reductions elsewhere. This will also be an important time to consider whether the government’s own priorities offer any new opportunities that might be explored.