The Office for Students (OfS) has received guidance from the government which sets out the Strategic Priorities Grant funding available for distribution in 2025-26.

The letter from the Department for Education provides the OfS with guidance on how to allocate £1,348 million of funding in 2025-26. This represents a reduction in the funding available to the OfS of £108 million, compared to 2024-25. The funding, which is subject to terms and conditions, will be used to support strategically important high-cost subjects, programmes which advance equality of opportunity and funding for world-class specialist providers. We have also received a separate letter announcing £84 million of capital funding which the OfS will distribute to support the growth of priority subjects in the sector.

Commenting John Blake, Director for Fair Access and Participation at the OfS, said:

“This funding – which the OfS will distribute following this guidance from government – supports nationally important subjects like nursing and midwifery which are expensive to deliver, as well as programmes which help ensure students from all backgrounds are able to access higher education and succeed in their studies. It also recognises the important contribution that world-class specialist providers make to the diversity of higher education in England.

“The OfS is continuing to consider the approach we take to using our funding powers, and we received helpful feedback from across the sector in response to a recent call for evidence. We’ll publish that feedback as part of our continuing work with government to review and reform our approach to funding.”

Sector Reaction

Vivienne Stern MBE, Chief Executive of Universities UK, said:

“The university system is one of the things this country can be genuinely proud of, but it is under extraordinary financial pressure. Funding per student has declined by about a third in the last decade. International student recruitment has fallen, National Insurance and pension contributions to the teachers’ pension scheme have gone up, and research grants cover less than 70% of the actual costs. Today’s announcement removes a further £100m from the English sector, making an already difficult situation worse. This follows proposals for a new tax – potentially costing £600m – on international student income announced just last week.

“Universities have been facing into this huge financial challenge and cutting costs fast on a scale I have not seen in 25 years working in the sector.  We’re determined to ensure our universities deliver what this country needs – great research, high quality university education and economic growth. But we need government to work with us to stabilise the ship and put it back on an even keel. That is the opposite of what happened today.”