The most important single issue in HEFCE's consultation on the new funding method is what it doesn't say: there is no plan whatsoever to reintroduce the contract range. The contract range principle was the old HEFCE approach explained by me here and (far better) by David Kernohan here. Under the contract range principle, HEFCE paid out the pre-agreed grant provided that the fundable student activity was within 5% of expectations. If the activity was more than expected they never paid more. If it was more than 5% less, they would hold back or claw back grant.
The benefits of this system were immense. In particular, it meant that most of the time 20 students here or there didn't matter to funding. Only institutions right at the edge of the contract range needed to worry about every last student. If my institution was not near the edge of the contract range, and I was sure that I was slightly understating my data rather than slightly overstating it, then I could simplify my data returns. So I need fewer staff. By contrast without the contract range every last student is going to count for at least a little funding so the data are going to have to be worked over much more carefully - at greater cost - and the audit standards are going to have to be higher - at greater cost. If I can put someone to work for 6 months on some obscure aspect of our Cost Centre data and they manage to get us £60,000 more grant it seems as if my institution comes out (at least a little) ahead; but HEFCE funding is a zero-sum game because HEFCE distribute the funds they have so if all institutions go to work like this then there is much more work on data returns, but not actually more money available.
Now in recent years HEFCE have been in a bit of a mess with some parts of their grant inside the contract range, and others paid on a per-student basis so the model has been a 'worst of all worlds' one. The transitional model for phasing out the 'old regime' students doesn't use a contract range, but HEFCE argued that this was due to specific features of a model designed to be phased out over a number of years. From my perspective, certainly, the reintroduction of a contract range approach would have been a major step forward. An example of 'deregulation' which, for once, wouldn't have needed the scare quotes.
Here are some other key highlights:
Student Number Control
The benefits of this system were immense. In particular, it meant that most of the time 20 students here or there didn't matter to funding. Only institutions right at the edge of the contract range needed to worry about every last student. If my institution was not near the edge of the contract range, and I was sure that I was slightly understating my data rather than slightly overstating it, then I could simplify my data returns. So I need fewer staff. By contrast without the contract range every last student is going to count for at least a little funding so the data are going to have to be worked over much more carefully - at greater cost - and the audit standards are going to have to be higher - at greater cost. If I can put someone to work for 6 months on some obscure aspect of our Cost Centre data and they manage to get us £60,000 more grant it seems as if my institution comes out (at least a little) ahead; but HEFCE funding is a zero-sum game because HEFCE distribute the funds they have so if all institutions go to work like this then there is much more work on data returns, but not actually more money available.
Now in recent years HEFCE have been in a bit of a mess with some parts of their grant inside the contract range, and others paid on a per-student basis so the model has been a 'worst of all worlds' one. The transitional model for phasing out the 'old regime' students doesn't use a contract range, but HEFCE argued that this was due to specific features of a model designed to be phased out over a number of years. From my perspective, certainly, the reintroduction of a contract range approach would have been a major step forward. An example of 'deregulation' which, for once, wouldn't have needed the scare quotes.
Here are some other key highlights:
Student Number Control
Essentially, there's no change proposed in the student number control, although HEFCE will explore options to remove the disincentive to recruit students to 1-year top-up programmes. This is a pretty narrow issue since it only affects students who do a Foundation Degree in one institution and then top-up in another and there are very few of these.
Some broad criteria on the approach to identifying A-level equivalences if the AAB boundary moves down are discussed, but there's no detailed discussion of this issue.
One interesting suggestion is that the SNC could be moved (up or down) to reflect changes in the average length of courses at a particular institution. I think this is a good indication of the sensitivity to over-recruitment at BIS/HEFCE and therefore indicates that the AAB boundary is likely to move down slowly, if at all. It is also a fascinating example of why 'deregulation' does normally need those scare quotes. I'm not familiar with explicit controls on the lengths of Undergraduate courses previously having been in place in England.
There are no explicit proposals for more rounds of core/margin.
The proposal for a ‘tolerance band’ on the SNC in Circular letter 26/2011
T funding
HEFCE's completion (FUNDCOMP) definition based on students attending their assessments will continue to be used for HEFCE funding (e.g. of high-cost students or when allocating WP funding). Good news for those of us who make our living interpreting FUNDCOMP regulations, but another opportunity to decrease cost and complexity missed from the perspective of the other 99.99%
Additional funding for accelerated/intensive provision (primarily 1-year Masters in practice) remains in place at current levels.
London weighting replaced by a London additional costs allocation of roughly equivalent size. This will be driven by student numbers in all price groups, not by weighting the funding allocation.
Partial completion funding will be withdrawn. This will have a significant impact on institutions like London Met or UEL who had substantial partial completion funding. HEFCE justify this on the basis that fee will still usually have been drawn down for students who partially complete.
Widening Participation (WP) and Teaching Enhancement and Student Support (TESS) allocations replaced by Student Opportunity allocation on similar drivers. Funding for research-informed teaching and institutional L&T strategies is gone, so overall allocations down somewhat (£401 million in 10/11, £329 million in 13/14), but otherwise this seems mostly a cosmetic change.
Price Group C has been split, so that funding will still be allocated to the highest-cost subjects in C (now C1), as follows:
Illustrative rates of HEFCE funding per FTE for price groups from 2013-14
Price groups | Undergraduates and postgraduates on courses subject to the undergraduate student support regime (£) | Postgraduate taught students on courses not subject to the undergraduate student support regime (£) |
A | 10,000 | 11,100 |
B | 1,500 | 2,600 |
C1: Subjects in price group C with average costs greater than £7,500 | 250 | 1,350 |
C2: Subjects in price group C with average costs no more than £7,500 | 0 | 1,100 |
D | 0 | 0 |
C1 subjects will be Archaeology; Information technology & systems sciences; Computer software engineering; Design & creative arts; and Media studies. This will be actual cash, not movement in the contract range, however the total funding allocated via this route will be very modest (£384M in 21013/14). Still, I will be reviewing our academic departmental organisation to see whether there is anything extra I can cram into the Media Studies Cost Centre.
Finally, HEFCE calculate that all students should be at least as well-funded as previously:
Notional full-time undergraduate rates of resource (HEFCE grant + fee income) for 2011-12 and 2013-14
Price group: | A | B | C1 | C2 | D |
2011-12 resources for old-regime students (up to 2011-12 entry) | |||||
HEFCE teaching grant | £13,335 | £4,894 | £3,426 | £3,426 | £2,325 |
Maximum regulated fee | £3,375 | £3,375 | £3,375 | £3,375 | £3,375 |
Total | £16,710 | £8,269 | £6,801 | £6,801 | £5,700 |
2013-14 resources for new-regime students (from 2012-13 entry) | |||||
Approximate HEFCE teaching grant | £10,000 | £1,500 | £250 | £0 | £0 |
Maximum regulated fee (2012-13 prices) | £6,000 - £9,000 | £6,000 - £9,000 | £6,000 - £9,000 | £6,000 - £9,000 | £6,000 - £9,000 |
Total | £16,000 - £19,000 | £7,500 - £10,500 | £6,250 - £9,250 | £6,000 - £9,000 | £6,000 - £9,000 |
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