The Higher Education Funding Council for England has awarded more money to 4-rated research departments and revised its approach to rewarding efforts to widen participation.
In 2004-05, Hefce will distribute almost £6 billion in grants - a cash increase of 9 per cent on this year. Individual grants to universities and colleges will be announced in March.
Hefce has reversed a decision that would have allowed inflation to erode the money available for departments graded 4 (nationally excellent) in the 2001 research assessment exercise. At its board meeting last week, it agreed to spend £120 million on 4-rated departments next year, £2 million more than previously agreed.
The decision caps the average unit of resource for 4-rated departments in real terms, rather than the previously proposed cash terms, and puts them on the same footing as 5* and 5-rated departments.
The board also decided to replace the postcode premium, which awards cash to institutions taking students from neighbourhoods underrepresented in higher education.
From this summer, the premium will be based on the average participation in higher education by ward, not by neighbourhood type.
London-based institutions will get extra cash for widening participation.
Those in inner London will get an 8 per cent weighting, while those in outer London will receive a 5 per cent weighting.
Teaching grants will be increased to encompass funding previously given for rewarding and developing staff, staff recruitment initiatives and for the researcher fellowship scheme.
Some 10,000 additional full-time equivalent foundation degree places will be funded over two years.
Some £3.83 billion will be spent on teaching, of which £3 million will be for access and retention. There will be £1.08 billion for research, £486 million for special funding, £584 million for earmarked capital and £12 million set aside to meet the costs of transferring schemes from the Teacher Training Agency and Teachers Pension Scheme to other funding bodies.