Medr/2025/16: Higher Education Research Capital (HERC) Fund 2025-26

Introduction

1. Since 2011 Higher Education Research Capital (HERC) has been provided to qualifying institutions in Wales. This publication advises Higher Education Institutions (HEIs) of allocations for 2025-26 and provides guidance on the associated reporting and monitoring requirements.  

Background

2. The Department for Science, Innovation and Technology (DSIT) has confirmed that it will provide HERC funding to the four UK HE funding bodies^[1] in 2025-26. DSIT will provide support of £4,623,296 in Wales which will be matched by a contribution from the Welsh Government (WG) resulting in a total fund of £9,246,592.

Use of funding

3. The funding provided under HERC is to be used solely for capital investment in the physical infrastructure for research. Research includes ‘scientific research’ (meaning research and development in any of the sciences including social sciences or technology (section 6(1) of the Science and Technology Act 1965)) and arts and humanities research.

4. In determining the use of their allocations institutions should consider the requirements of Welsh Government’s Programme for Government and the ambitions identified in the UK Innovation Strategy, UKRI’s strategy, Welsh Government’s Innovation Strategy and Medr’s Strategic Plan 2025-2030. Consideration should also be given to how funding is used to support the ambitions of the Well-being of Future Generations (Wales) Act 2015.

Allocations

5. Funding is allocated via separate methods for DSIT and WG elements:

1. The DSIT element of funding is allocated using the most recent 3-year data from the Higher Education Statistics Agency (HESA) on UK Research and Innovation Research Council income. As per DSIT’s Memorandum of Understanding with Medr and Welsh Government, funding should focus on maintaining excellent departments with critical mass to compete globally and the expertise to work closely with business, charities and public services.
2. The Welsh Government element of the grant is allocated pro-rata to a combination of latest recurrent Quality Research (QR) allocation plus other research income reported by the provider to the HESA finance record. The QR allocation for 2024/25 has been used within the funding formula for HERC 2025-26.

Funding threshold

6. In order to meet the DSIT requirement that the fund supports excellence and builds critical mass the formula includes a minimum threshold of £100k. Only institutions with allocations calculated to be above this eligibility threshold will receive funding in 2025-26.

7. Funding allocations for qualifying institutions in 2025-26 can be found at Annex A.

Monitoring arrangements

8. In February 2025, institutions submitted details of their future HERC funding priorities for 2025-26. Confirmation of these investments and potential future plans for 2026-27 should be provided by completing and submitting the pro-forma at Annex B.

• including total costs of large scale investments where HERC funding has been a contribution. Institutions should demonstrate where HERC funding has enabled and incentivised research capacity, developed strategic priorities, and allowed institutions to compete more effectively for external research and innovation funding.
• Part 2 of the pro-forma should be used to outline spending priorities for 2026-27 based on the assumption further HERC funding is made available.
• Annex B must be returned to Medr by no later than 13 February 2026.

9. In order to confirm HERC has been spent in full qualifying institutions are asked to submit the Confirmation of Expenditure pro-forma at Annex C by 24 April 2026. Institutions should ensure it is clear whether any unspent funding is committed and if so, the date by which it will be spent in full. Unspent funding which is uncommitted can be reclaimed by Medr.

10. The information submitted by HEIs in these reports will form the basis of Medr’s reporting requirements for Welsh Government in February 2026 and DSIT in June 2026. Failure to provide adequate project and expenditure detail could delay future confirmation of funding allocations, or indicate a potential lack of impact for HERC investment in Wales which could diminish the argument for continued funding.

Payment arrangements

11. As noted in Annex A funding will be distributed via two payments in September 2025 and January 2026.

Further information/responses to

12. For further information, contact Hayley Moss ([email protected]).

^[1]Medr – the Commission for Tertiary Education and Research; Scottish Funding Council; Department for the Economy (Northern Ireland); Research England.