To: Heads of Research England-funded higher education providers
Reference: RE-CL-2026-03
Publication date: 17 July 2026
Enquiries to: annualfunding@re.ukri.org
Dear Vice-Chancellor or Principal
In this letter we set out our budget decisions on Research England’s funding streams for higher education providers (HEPs) for the academic and financial year 2026 to 2027. These funding budgets stem from:
- Department for Science, Innovation and Technology (DSIT) Research and Development plans to 2029/2030
- subsequent budget allocations for UK Research and Innovation (UKRI), published in December 2025
- Department for Education Strategic Priorities Grant funding guidance to the Office for Students, published in July 2026
We have been able to slightly increase budgets in academic year 2026 to 2027 for our core research and knowledge exchange funds. The Research Capital Investment Fund (RCIF) budget is changing over this Spending Review period, as communicated in our March 2026 circular letter Research Capital funding for financial year 2026 to 2027 onwards.
Guidance from the Department for Science, Innovation and Technology (DSIT)
Alongside this letter, we publish the specific guidance UKRI has received from DSIT. This sets out the government’s priorities and the budget allocations for Research England in financial year 2026 to 2027.
The balance of dual support is maintained.
Budget decisions for 2026 to 2027
Following endorsement by the Research England Council, we have set budgets for:
- research and knowledge exchange funding for the 2026 to 2027 academic year (tables 1, 2 and 3)
- capital funding for the 2026 to 2027 financial year (table 4)
Capital funding is allocated by financial year from April to March, and all other formula-based funding is allocated by academic year from August to July.
Decisions on funding are delegated from the Chief Executive Officer of UKRI to me as Executive Chair of Research England. The Executive Chair acts with the endorsement and support of the Research England Council.
Research and knowledge exchange funding for academic year 2026 to 2027
In making budget decisions for the 2026 to 2027 academic year, we have assumed that the funding we receive will continue for financial year 2027 to 2028. This includes:
- our budget allocations from UKRI, as apportioned to Research England from the budget awarded from DSIT to UKRI
- funding from the Department for Education to support Higher Education Innovation Funding (HEIF)
Any significant future changes to our funding could affect the funding we are able to distribute to HEPs in the 2026 to 2027 academic year. This may include revising allocations after they have been announced.
We also reserve the right to make retrospective revisions to allocations for 2025 to 2026 and earlier years if there is specific need. For example, if we find that terms and conditions of grant have not been met or that formula-based allocations have been informed by incorrect HEP data.
Table 1: academic year budgets for research and knowledge exchange funding
| Research funds | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| Quality-related research (QR) funding | 1,987 | 2,024 |
| Policy Support Fund | 29 | 29 |
| Enhancing Research Culture | 30 | 30 |
| Participatory Research | 6 | 6 |
| Specialist Provider Element | 20 | 20 |
| National facilities and initiatives | 80 | 79 |
| School of Advanced Study and Institute of Zoology | 13 | 13 |
| Total academic year research funding | 2,165 | 2,201 |
| Knowledge exchange funds | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| Higher Education Innovation Funding (HEIF) | 280 | 284 |
| Research England Development (RED) Fund | 24 | 18 |
| Connecting Capability Fund-RED (CCF-RED) | 9 | 7 |
| Total academic year knowledge exchange funding | 313 | 309 |
| Total academic year funding | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| Total research funding | 2,165 | 2,201 |
| Total knowledge exchange funding | 313 | 309 |
| Total academic year funding | 2,478 | 2,510 |
Notes for table 1:
- figures may not add up to the total due to rounding differences
- excludes £21 million short-term financial year funding DSIT allocated to Research England during 2025 to 2026 for International Science Partnerships Fund (ISPF) institutional support grant official development assistance (ODA) funding
Funding for research
Budgets for the separate elements of quality-related research (QR) funding have been increased by 1.88% from their 2025 to 2026 levels, as shown in table 2. This recognises Research England’s mission to create and sustain the conditions for a healthy and dynamic research and knowledge exchange system in English HEPs.
Table 2: academic year budgets for individual elements of QR funding
| Elements of QR funding | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| Mainstream QR funding (including London weighting) | 1,303 | 1,327 |
| QR Research Degree Provision (RDP) supervision fund | 344 | 350 |
| QR charity support fund | 219 | 223 |
| QR business research element | 114 | 116 |
| QR funding for national research libraries | 7 | 7 |
| Total QR funding | 1,987 | 2,024 |
Notes for table 2:
- figures may not add up to the total due to rounding differences
- increases to smaller budgets may not be visible due to rounding
We are maintaining budgets for Enhancing Research Culture, Participatory Research and Policy Support Fund in 2026 to 2027.
We are also maintaining the Specialist Provider Element funding in 2026 to 2027.
Funding for knowledge exchange
We have increased our HEIF budgets as shown in table 1. This reflects a 1.88% increase in the portion of HEIF originating from DSIT. Also included in the total budget is £48 million contributed by the Department for Education to support student and teaching elements of knowledge exchange through HEIF. We expect the Department for Education contribution to be confirmed annually.
Table 3: academic year budgets for individual elements of HEIF funding
| Elements of HEIF funding | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| Main HEIF | 240 | 244 |
| HEIF top-up | 20 | 20 |
| HEIF business and commercialisation supplement | 20 | 20 |
| Total HEIF funding | 280 | 284 |
Notes for table 3:
- figures may not add up to the total due to rounding differences
- increases to smaller budgets may not be visible due to rounding
In 2025 Research England updated our policy on the eligibility criteria for knowledge exchange funding.
Two funding streams were initiated in 2022 to 2023, in response to government policy guidance to increase funding for activity supporting commercialisation and university-business collaboration:
- HEIF business and commercialisation supplement
- Connecting Capability Fund (CCF-RED) programme
The HEIF business and commercialisation supplement (issued in addition to the main HEIF formula funding) will continue to be allocated on the basis outlined in November 2022.
Funding for CCF-RED, which provides dedicated funding for commercialisation projects, reflects commitments to ongoing projects. We are reviewing investments made and identifying priorities.
Capital funding for financial year 2026 to 2027
The budget for the Research Capital Investment Fund (RCIF) is changing over the current Spending Review period in the context of wider infrastructure investment from UKRI and DSIT. These changes were communicated in our March 2026 circular letter Research Capital funding for financial year 2026 to 2027 onwards.
From financial year 2026 to 2027, RCIF must be directed toward sustaining existing research facilities to support the maintenance and upkeep of existing infrastructure, including buildings, estate and equipment. It should not be used for new buildings or major new infrastructure.
We provide capital grants on a financial year basis, so for 2026 to 2027 these grants must be spent in full by March 2027.
Capital developments funded under the seventh round of the UK Research Partnership Investment Fund (UKRPIF) have now concluded.
Capital budgets are shown in table 4.
Table 4: financial year budgets for capital funding
| Research Capital Investment Fund (RCIF) | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| HEI Research Capital England | 92 | 90 |
| Higher Education Research Capital (HERC) England | 83 | 85 |
| Total RCIF | 174 | 174 |
| Capital funding | 2025 to 2026 (£ million) | 2026 to 2027 (£ million) |
|---|---|---|
| RCIF | 174 | 174 |
| Additional capital formula funding | 59 | n/a |
| National facilities and initiatives | ||
| (from additional capital) | 5 | 5 |
| UK Research Investment Partnership Fund (UKRPIF) | 15 | n/a |
| Total financial year capital funding | 253 | 179 |
Notes for table 4:
- figures may not add up to the total due to rounding differences
Further information
Following a period of consultation, an updated set of terms and conditions for 2026 to 2027 will be published on 1 August 2026.
We plan to publish our 2026 to 2027 grant allocations for formula-based funding in July 2026.
An explanation of our allocation methods for formula funding streams can be found in our publication ‘Research England: how we fund higher education providers’.
Any questions about this letter should be addressed to annualfunding@re.ukri.org
Specific questions about research or knowledge exchange funding should be addressed to researchpolicy@re.ukri.org or kepolicy@re.ukri.org respectively.
Yours faithfully,
Professor Dame Jessica Corner FMedSci, MAE, FKC, RN
Executive Chair, Research England