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Dear Vice-Chancellor or Principal

1.   On 20 July, the Secretary of State, the Rt Hon Lord Mandelson, announced the availability of 10,000 new student places for 2009-10. The Minister of State for Higher Education and Intellectual Property, the Rt Hon David Lammy MP, provided further guidance on this in a letter to our Chair on 23 July 2009. Information on these announcements is available on our web-site. Here we outline the implications of these announcements for institutions’ recruitment in the coming academic year, and show each institution’s provisional share of the new places available. The numbers shown at Annex B represent the minimum number of places available to each institution. Final numbers will be distributed after we have heard from institutions that do not wish to take up their share (see paragraph 2).

2.   We are keen to ensure that as many of the available places as possible are taken up. Therefore, with reference to the distribution of places in Annex B, institutions that wish to return some or all of their places for redistribution to other institutions should notify us by e-mail at by 1700 on Thursday 30 July 2009. We will distribute any returned places to other institutions pro rata to their provisional shares. Institutions that do not wish to be included in any distribution of returned places should also notify us by e-mail at by 1700 on Thursday 30 July 2009. Institutions that wish to discuss this beforehand should contact their institutional teams at HEFCE.

3.   We intend to notify institutions of their final share of places in a further Circular letter on Friday 31 July.

4.   The 10,000 new places for 2009-10 are for full-time undergraduates in certain subject areas that will support the Government's 'New Industry, New Jobs' policy. These include, but are not limited to, science, technology, engineering and mathematics. The places are being supported by the Government through the provision of student support and loans towards the tuition fees that institutions will charge, but do not come with additional HEFCE grant.

5.   The new places serve to relax, but not remove, the restriction on increases in full-time undergraduate and PGCE entrants that institutions were notified of most recently in their funding agreements issued on 20 July. This restriction does not apply to part-time undergraduate or to other postgraduate entrants.

6.   The funding agreements stated that, to help manage the risk of over recruitment, we ask institutions to avoid increases in full time undergraduate and full-time PGCE entrants above the level of their actual admissions in 2008-09 plus any additional student numbers (ASNs) allocated to them for 2009 10 by HEFCE or the Training and Development Agency for Schools, except where such increases are permitted by any separate notification that we may issue. This letter specifies where such increases are now permitted as a result of the 10,000 places that have just been made available.

7.   We have determined each institution’s share of these places based on their full-time undergraduate entrants in the subjects prioritised by the Department for Business, Innovation and Skills. Annex A identifies these subjects; Annex B shows each institution’s minimum share of the places available.

8.   The student places announced in Annex B provide additional flexibility for institutions to accommodate some increases in full-time undergraduate new entrants. As a result of this distribution of places, we are amending paragraph 36 of the funding agreements for higher education institutions (HEIs) and paragraph 43 of the funding agreements for further education colleges (FECs) to read:

Our allocations for 2009-10 make provision for growth in the sector that is consistent with the Government’s plans. To help manage the risk of over recruitment, we ask institutions to avoid increases in full time undergraduate and PGCE entrants above the level of their actual admissions in 2008-09 plus any ASNs allocated to them for 2009-10 by HEFCE or the Training and Development Agency for Schools, unless such increases:

  • are of full-time undergraduates in the subjects specified in Annex A of HEFCE Circular letter 15/2009 and
  • do not exceed the numbers confirmed on the 31 July 2009.

We expect institutions to recruit responsibly, but have not introduced any new specific targets through the funding agreement for 2009-10.

9.   The additional freedom accorded by these 10,000 places is limited. As previously notified in EP 01/2009, 'Funding for universities and colleges in 2009', issued in January 2009, and in HEFCE 2009/08, 'Recurrent grants for 2009-10', there remains a risk of a reduction in HEFCE grant if over-recruitment results in unanticipated student support costs. If this situation arises, HEFCE will pass on any grant reductions to institutions, as explained in institutions’ funding agreements. Furthermore, any additional recruitment must be managed within the institution’s contract range for the year. This additional distribution of places does not give institutions licence to move (further) below their contract range.

The distribution of places

10.   The distribution of places shown in Annex B has been determined pro rata to home and EC full-time undergraduate new entrants (whether HEFCE-fundable or not) in the subjects identified in Annex A, as recorded on the 2007-08 Higher Education Statistics Agency (HESA) individualised student record or the 2007-08 Data Service individualised learner record (ILR). These are the most recent comprehensive data sets available to us. Subjects have been identified using the Joint Academic Coding System (JACS) code for HEIs or learndirect code for FECs of students’ qualification aim. Students are counted if at least 50 per cent of their qualification aim is in one or more of the subjects listed. It has not been possible to account for changes in recruitment since 2007-08 except in the following cases:

  • where a Lifelong Learning Network has changed from the 'non-mainstream' model 2 funding route through a lead institution to the 'mainstream' route through member institutions
  • where HEFCE-recognised funding consortia have been dissolved.

11.   In both of these cases, we have reflected the transfers of student numbers between institutions in our calculations, based on the number of entrants in 2007-08. We have also taken account of amendments to HESA and ILR data where these had been signed off by 22 July.

12.   To assure maximum take-up of the places, we informally approached institutions with a large initial share to see if they were able to take these up. For a variety of reasons, a number of institutions indicated that they cannot take up their share and have asked that their additional places be re-distributed so that they are available elsewhere. We have already distributed these numbers pro rata across the sector. We will do a further redistribution of places on Friday 31 July once we have received the responses called for in paragraph 2 above.

13.   We have taken the approach outlined in this letter so that institutions will know as soon as possible what their recruitment limit is, before decisions on admissions need to be finalised in the light of A-level and other Level 3 results. We acknowledge that this approach does not recognise the specific circumstances of every institution in the country but it has treated all institutions fairly and consistently and, above all, avoided delay. These are exceptional circumstances and the timing is such that we will not be able to consider any individual requests for increases to the numbers in Annex B aside from the further adjustments that may occur at the end of the month as a result of redistribution (as outlined in paragraph 2). Any places that are returned for redistribution will be distributed pro rata to all institutions, unless they have indicated they do not wish to receive a further share.

Monitoring arrangements

14.   HEFCE will monitor numbers of full-time undergraduate and full-time PGCE entrants between 2008-09 and 2009-10 in case there may have been over-recruitment. However, we will implement consequential grant reductions only if the Department for Business, Innovation and Skills reduces our grant (either for 2009-10 or 2010-11) as a result of excess student support costs in 2009-10.

15.   We hope this will not be necessary, but if it is, we will, in the first instance, look to apply grant adjustments differentially to those institutions that we consider most responsible. For this purpose, we will use whatever data sources we consider appropriate, including: the Higher Education Students Early Statistics (HESES) and Higher Education in Further Education: Students (HEIFES) surveys from institutions, individualised HESA and ILR student data, and any other relevant data available from external bodies such as UCAS and the Student Loans Company or that we may request of institutions.

16.   Where our initial investigations suggest that an institution may have contributed to the student support budget being exceeded, we will invite institutions to provide details of their circumstances and any factors that they think we should take into account. Such factors may include (but not be limited to):

  1. Evidence that any increases in entrants above the levels in 2008-09, plus any ASNs awarded, is attributable to the subject areas listed in Annex A. This will require detailed statistical information for the relevant JACS or learndirect codes across both years.
  2. Information on broader institutional circumstances, such as any migration toward the tolerance band, or recovery of funding following the consolidation of 2008-09 holdback.
  3. Information on changes in entrants to NHS-bursaried courses.

17.   In the last two examples above, we make no guarantees at this point as to how we might treat such information in determining funding changes. We will not give advice to institutions on their recruitment strategies for 2009-10: this is for institutions themselves to determine in the light of information available to them and their own particular circumstances.

18.   In monitoring changes in new entrants between 2008-09 and 2009-10, it is important that we compare numbers on a like-for-like basis. The definition of new entrants is given in Annex E paragraph 41 of HESES08 (HEFCE 2008/37) and Annex E paragraph 34 of HEIFES08 (HEFCE 2008/36), and is not changing in the equivalent surveys for 2009-10. Institutions should ensure that they are consistent in how they report new entrants across the two years.

19.   If we apply any reductions to an institution’s grant as a result of over-recruitment, these may be reviewed retrospectively in the light of any data reconciliation or audit work, including a review of final HESA data for the two years.

20.   If we are unable to identify entirely and satisfactorily those institutions that have contributed to any excess student support costs, then (further) grant adjustments may be applied pro rata to all institutions that recruit full-time undergraduate and PGCE students.

21.   Any questions from institutions about this letter should be addressed to HEFCE's institutional teams. However, as explained above, we cannot now consider any individual requests for increases to the numbers in Annex B aside from the further adjustments that may occur at the end of the month as a result of redistribution (as outlined in paragraph 2). Our priority has been to act swiftly and fairly so that we can notify institutions in good time to inform their admissions decisions in preparation for clearing. We regret that we have been unable to take account of all institutions' circumstances, but to do so would have resulted in unhelpful delays.

Yours sincerely

Sir Alan Langlands
Chief Executive

Date: 28 July 2009

Ref: Circular letter 15/2009

To: Heads of HEFCE-funded further education colleges, Heads of HEFCE-funded higher education institutions

Enquiries should be directed to:

the relevant HEFCE institutional team