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1.   In September 2007, the Secretary of State for Innovation, Universities and Skills decided that we should phase out funding for most equivalent and lower qualifications (ELQs). In HEFCE 2007/27, we consulted the sector on our plans for implementing this policy. Here we set out the decisions made following that consultation.

2.   This document summarises how the withdrawal of funding will be implemented. Further detailed guidance on how institutions should complete their student data returns to reflect the new policy will be issued separately in April 2008. This does not discuss how the savings generated by the ELQ policy will be reinvested, which will be considered during the process of awarding additional student numbers to institutions.

Key points

3.   We received 312 responses to our consultation. Responses came from a mixture of higher education institutions, further education colleges, individuals and other organisations. While many respondents expressed concern about the ELQ policy itself, the majority expressed support for our proposals for implementing the withdrawal of funding.

4.   Following consultation, we agreed with our Board to amend our original proposals in three ways:

  1. We agreed that the supplement to the part-time undergraduate targeted allocation should be increased from £20 million to £30 million. This increased supplement will support the part-time sector as it finds ways to respond to the ELQ policy.
  2. We agreed that students in receipt of Disabled Students Allowance (DSA) should be exempt from ELQ policy. This exemption will reduce the extent to which disabled students - a group already under-represented in higher education - will be affected by the policy.
  3. We agreed that students in Northern Ireland studying with the Open University should be exempted from the policy. This reflects the fact that the ELQ policy does not apply to Northern Ireland.

5.   Our final plans for implementing the ELQ policy are therefore as follows.

  1. We will exempt the following students from the withdrawal of funding for ELQs:
    1. Those studying courses that are identified as 'exceptional cases in the Student Support Regulations and the Student Fees Regulations'. This includes undergraduate medicine, dentistry, social work, nursing, veterinary science and all levels of teacher training, as well as a number of other subjects.
    2. Those studying for a foundation degree.
    3. Those in receipt of DSA.
    4. Open University students in Northern Ireland.
  2. We will allow students studying for an ELQ to be counted towards the delivery of separately monitored co-funded additional student numbers.
  3. We will introduce a targeted allocation which will protect strategically important and vulnerable subjects (SIVS) from the impact of the ELQ policy.
  4. We will provide a £30 million supplement to the part-time undergraduate targeted allocation from 2009-10.
  5. We will provide safety net funding to ensure that no institution sees a reduction in cash terms compared to its equivalent mainstream teaching grant for 2007-08, as described in our consultation document (HEFCE 2007/27).

Reviewing the policy

6.   We will review the impact of the ELQ policy in early 2010. This will consider how institutions have responded to the policy and the effects on various types of provision.

7.   We will also review the supplement to the part-time undergraduate targeted allocation and the targeted allocation for SIVS. Both allocations will be reviewed in 2011, to inform grant allocations for 2012-13. The aim of the review will be to consider whether this additional support remains necessary. In the case of the SIVS allocation, we would also consider whether any changes are necessary to the list of subjects supported by this allocation.

Other work

8.   During the consultation, a number of institutions, groups and individuals raised concerns about the effect of the ELQ policy on particular subjects. Of particular concern was the impact on theology where it leads to training for the ministry. The Department for Innovation, Universities and Skills (DIUS) asked us to lead discussions with interested parties to consider how provision of foundation degrees and employer co-funded courses might be used to mitigate impacts of the ELQ policy. These discussions are underway and we will report to the Secretary of State on the outcomes later this year.

9.   DIUS also asked us to conduct an annual review of subjects of particular social and economic importance. This first such review will take place in December 2008. It will look at the levels of demand for both exempt and protected subjects, and at other subjects that may in future be regarded as key because of their economic or social significance. Where there is evidence indicating falling demand, we will advise DIUS on possible courses of action.

Action required

10.   No action is required. 

Date: 1 April 2008

Ref: 2008/13

To: Heads of HEFCE-funded further education colleges, Heads of HEFCE-funded higher education institutions, Heads of universities in Northern Ireland

Of interest to those
responsible for:

Finance, Planning

Enquiries should be directed to:

Contact HEFCE regional teams in the first instance. Or e-mail