Question to the Department for Education:

What steps his Department is taking to maintain levels of funding for universities and higher education institutes based in London.

The London Weighting element of the Strategic Priorities Grant accounts for a small proportion of London-based providers’ income. Providers in London received around £64 million London Weighting in academic year 2020-21, which was less than 1% of their estimated total income.

The Strategic Priorities Grant, formerly referred to as the Teaching Grant, plays an important role in supporting providers and students to develop the skills and knowledge needed locally, regionally and nationally to support the economy.

The grant is funding supplied by the government on an annual basis to support higher education (HE) providers’ ongoing teaching and related activities. In the financial year 2020-21, the Department for Education provided £1,253 million in recurrent Teaching Grant funding. In financial year 2021-22, the department will maintain this level of funding and is providing £1,253 million in recurrent Strategic Priorities Grant funding.

We have asked the Office for Students (OfS) to reform the grant for the 2021-22 financial year to ensure that more of taxpayers’ money is spent on supporting HE provision which aligns with national priorities, such as healthcare, science, technology, engineering and mathematics and subjects meeting specific labour market needs.

We have also asked the OfS for a £10 million increase to the specialist provider allocation, to support these institutions which are particularly reliant on Strategic Priorities Grant funding, many of whom are London-based. We want to ensure that our small and specialist providers, including some of our top music and arts providers, receive additional support, and that grant funding is used to effectively support students.

Even with the removal of the London Weighting, the reforms mean that around 1 in 6 London providers are estimated to see an increase in their Strategic Priorities Grant funding. These are HE providers offering courses aligned with the government’s strategic priorities.

The OfS will consult on these changes, before final allocations for the 2021-22 financial year are confirmed, and carefully consider the impact of any changes on providers.