Dear Vice-Chancellor or Principal
1. This letter invites applications for a new fund, the Economic Challenge Investment Fund (ECIF). The ECIF is intended to galvanise the resources and expertise of the higher education (HE) sector towards countering the impact of the economic downturn on individuals and employers. The deadline for responses is noon on Friday, 27 February 2009. We recognise that this deadline is quite tight, but this is in order to enable a rapid commencement of activities from April 2009.
2. The ECIF forms part of our employer engagement programme, which is investing £148 million in the HE sector to increase capacity and capability to deliver workforce development activities for employers (see HEFCE Circular letter 36/2008). Many institutions have established, or are seeking to establish, strategic relationships with employers to support development of their staff and longer-term business growth. Our programme is also enabling the HE sector to support professional development of public services and strategic developments aimed at the challenging small and medium-sized enterprise (SME) market. The ECIF also builds upon the infrastructure for knowledge exchange with businesses and the wider community supported through our Higher Education Innovation Fund (HEIF).
3. Recent unprecedented economic activity has created challenges to which the HE sector will be well placed to respond with a range of support. To facilitate a rapid response to the immediate needs of the economy we wish to provide via the ECIF £25 million of matched funding to the HE sector, to enable the delivery of tailored training, development and professional support to vulnerable target groups. This funding is available following a reprioritisation of our Strategic Development Fund investment, and will be for a fixed term (to September 2010) to focus delivery on activities that address the immediate needs of the economy. Our other investments in employer engagement and HEIF, mentioned in paragraph 2, focus on longer-term developments and outcomes.
Purpose of the funding
4. The primary purpose of the funding is to enable the HE sector to support the following:
- individuals - to enable those who are either unemployed or under the threat of unemployment to access training, development and other support to help them continue in their current employment or find new employment
- businesses, particularly SMEs and third-sector organisations such as voluntary and charity organisations - to provide professional knowledge and expertise to help equip them to survive in an economic recessionary period
Public sector employers may also benefit, although we will require clear evidence of why they require support at this time.
How funds might be spent
5. We wish to provide flexible funding that will support diverse and innovative approaches that respond to the short-term economic challenges. Below we indicate the types of activity that could be funded, but this is not prescriptive and is not an exhaustive list.
6. Our expectation is that ECIF-supported activities will use existing capacity and capability to deliver training, knowledge and services for the specific types of target groups and businesses that higher education institutions (HEIs) and further education colleges (FECs) have identified as being in greatest need. We are looking for institutions to use their networks and partnerships to identify the needs of employees and employers in the communities they serve, and rapidly to respond to those needs. Below are examples of the target groups and type of activities that can be supported.
7. For individuals:
- Support to protect employment for those already in work (such as where employers choose to train employees rather than make them redundant when reducing their activities).
- Support through improved advice and opportunities for training and development for those newly unemployed to improve their chances of re-employment, recognising the distinctive needs of experienced and advanced professionals, and the need to promote innovation through enterprise.
- Support for new graduates to access advice, training and work experience. This may include graduates affected by shrinkage of graduate training schemes who are not in contact with own careers service, or graduates on the Government's recently announced graduate internship scheme.
- Development and training for those in work to enable them to continue in employment.
8. For businesses and other organisations:
- Those businesses whose workforce needs access to the right skills and development opportunities to manage the economic business challenges; this may include non-accredited provision delivered flexibly.
- Businesses, particularly SMEs, needing easy-to-understand, co-ordinated access to HE knowledge and expertise which will improve business performance through practical support or research and innovation.
- Businesses (including large firms) that are adopting training and development as a way of managing a shrinking business or as an alternative to redundancy.
9. In the current environment the ECIF aims to facilitate the swift development of course and support packages, and for institutions to be responsive to immediate needs at all levels of learning. Some businesses and employees may be more concerned about relevance of training to immediate needs than the longer-term benefits of qualifications. In such cases, the fixed-term funding being offered can be used flexibly to cover course and delivery costs, including for provision currently not supported through the mainstream teaching funding grant. Funding can also be used to support services such as support for graduate employment, which are not currently supported by our workforce development programme, although we will require evidence that such activity is undertaken beyond the existing and planned levels of such services. Similarly, we will require evidence that activities funded will be in addition to those supported through HEIF round four strategies.
10. In HEIs (and indirectly funded FECs) the funding may be used to support provision which is currently defined as non-fundable for mainstream grant purposes: for closed courses (meaning provision targeted at only one employer) and non-accredited provision. As funding being offered is primarily directed at benefiting individuals, we believe that activity will not constitute state aid to businesses. However, where institutions are working with businesses directly, institutions should satisfy themselves that their activities fit within state aid, taxation and Charity Commission regulations.
11. The funding could also be used to support activity which would usually be funded through additional student number (ASN) or co-funded provision funding. However, the funding will not be allocated on a recurrent basis.
12. Further examples of activities that could be supported through the ECIF, and a list of frequently asked questions, are available on our web-site.
Funding and eligibility
13. We will provide development funding as follows:
- Maximum funding of normally £500,000 per institution.
- There is no minimum amount of funding, but we expect to see proposals for funding that are proportionate to an institution's overall capacity.
- No more than one proposal per lead institution. Institutions may be part of more than one proposal provided that the amount of funding they are applying for across all proposals does not exceed £500,000.
- Collaborative proposals, through a lead institution, up to a maximum HEFCE funding value of £1 million are permitted, provided no single institution involved receives more than £500,000 in funding. This includes Lifelong Learning Networks (LLNs) and Higher Level Skills Pathfinders, some of which may be particularly well-placed to respond.
- Matched funding is required from the institutions. The matched funding must be at least equal to the level of HEFCE funding, derived from clearly identified sources and must not result in substitution from other HEFCE special funding provided.
14. We anticipate supporting around 50 proposals. We would hope to agree around 10 larger collaborative proposals of up to £1 million HEFCE contribution each, and some 40 smaller proposals of up to £500,000 each.
15. The funding is available to HEIs and FECs (directly and indirectly funded, through a lead HEI). Directly-funded FECs with fewer than 100 FTE HE students will not be eligible for ECIF support individually, but may submit a collaborative proposal with other FECs to reach the minimum 100 FTEs threshold. Due to the legal restrictions on our funding responsibilities for directly-funded FECs (see HEFCE Circular letter 22/2008), we can only consider proposals from them where:
- Development activity funded by HEFCE is directly linked to the development and delivery of prescribed courses of HE funded by HEFCE. We are unable to provide funding to support infrastructure developments more generally.
- The investment is proportionate to the scale of provision funded by HEFCE.
16. The assessment criteria for the ECIF are:
- Evidence that the proposal identifies the needs and likely levels of demand from the target groups in the communities served, and an assessment of the degree of confidence that provision will be taken up.
- Evidence of support for skills shortage areas (such as STEM subjects), or areas of potential economic growth.
- Evidence of awareness of other short-term initiatives being delivered by partners (such as Regional Development Authority/Business Link, Train to Gain, local authority) and collaborating with those partners as far as possible to ensure coherence and added value in what is being offered.
- A statement of the activity and provision which will be delivered, the resources which will be deployed and how quickly activity will start after funding is awarded (including when the first individuals and businesses will benefit).
- A statement of the outputs (including volumes of activity) to be delivered, together with a statement of how success will be measured from the perspectives of the institution(s), and the participating individuals and businesses.
- Evidence the institution has the expertise and capacity already in place to ensure effective and rapid delivery. Proposals should show how resources from across the institution, and from wider delivery networks (such as LLNs, partners involved in delivering employer engagement projects) will be brought together to form a coherent offering.
- Evidence that the activity and provision covered by the proposal will be completed within the 18-month period and there will be no unsustainable commitments incurred beyond September 2010.
- Evidence that the proposed activity and provision is genuinely additional to that already planned.
- A financial statement, using a full economic costing approach, showing the total costs of the programme of activities (identifying separately the direct and indirect costs), the total amount of ECIF sought, the matching funding, and how the funding will be deployed.
- The value for money derived from the programme of activities - assessed by us based on the outputs, expected benefits to the target groups, the funding requested from the ECIF, the total programme spend, the relative proportion of indirect costs being charged to the programme, and the matched funding contribution.
Application process, selection process and timescale
17. HEIs and directly funded FECs are invited to submit proposals for funding. Institutions wishing to apply for funding should complete the template at Annex A below, and e-mail it to firstname.lastname@example.org by noon on Friday, 27 February 2009.
18. Proposals should not exceed the maximum length specified in the template. There should be no annexes except those for the purposes of Freedom of Information (FOI) (see paragraphs 24-27 below).
19. Up to £500,000 per proposal (£1 million for collaborative proposals) will be made available to institutions over the 18-month period from April 2009 to September 2010. There will be a single assessment process for all proposals.
20. Proposals will be assessed against the specific criteria for the ECIF. We will also take into account other factors such as the quality of the proposal, regional issues and institutional issues.
21. Following an internal assessment of proposals, our Chief Executive's Group will approve the allocation of funding to successful proposals at its meeting on 6 April 2009, and institutions will be informed by the following day.
22. The timescale for the ECIF is as follows:
|27 February 2009||Deadline for submission of proposals|
|March 2009||Assessment of proposals|
|7 April 2009||Funding confirmed for successful proposals and activities commence|
|September 2010||Funding period ends|
|December 2010||Final reports submitted|
23. All lead institutions will be required to submit a final report in December 2010 following the end of the funding in September 2010. We will also require interim reporting - a single interim report for smaller funding awards, and two interim reports for larger awards. We will provide further guidance on our requirements at a later date.
Freedom of Information Act 2000
24. HEFCE is subject to the Freedom of Information Act 2000 which gives a public right of access to information held by a public authority. This may result in applications, communications between us and the institution, information arising from this work, or the outputs from the work undertaken being subject to disclosure if a valid request is made to us. We will comply with such requests in accordance with the legislation and our own policies.
25. Institutions can, if they wish, provide potentially sensitive information (such as information relating to commercial interests) in a separate annex attached to the application form. This will highlight to us that there are concerns over disclosure. With annexes, the proposal must not exceed the maximum length as stated in the application template.
26. Where we consider it to be appropriate and practicable we will seek the views of applicants before disclosing this information. The applicant acknowledges that information provided in the annex is of indicative value only and that HEFCE may nevertheless be obliged to disclose this information. Our assumption will be that all information in the main application documents can be disclosed on request.
27. Further information about FOI can be found on the Information Commissioner's web-site.
Professor David Eastwood