Employer engagement and co-funding (HEFCE Circular letter 03/2007)
Frequently asked questions
A list of frequently asked questions relating to HEFCE Circular letter 03/2007 is provided below.
Last updated 24 June 2008
Contents
Co-funding
- What are co-funded ASNs?
- Can employer payment of fees constitute co-funding?
- What level of co-funding is expected from employers?
- Can 'in-kind' contributions contribute to co-funding?
- How will co-funded ASNs be monitored?
- How will holdback of HEFCE grant apply to co-funded ASNs?
- How should institutions report co-funded ASNs that could also meet Lifelong Learning Network or Higher Level Skills Pathfinder ASN targets?
- Will HEFCE be funding courses which have previously been designated 'closed' courses?
- How does EU State Aids regulations affect employer engagement provision?
- Can co-funded ASNs be used to provide HE for public sector employers?
- Will co-funded numbers be 'mainstreamed'?
- Will HEFCE fund short courses?
- Will institutions be able to bid for fully-funded and co-funded ASNs?
- Will HEFCE fund co-funded postgraduate provision?
Train to Gain
- Why have you funded Higher Level Skills Pathfinders (Train to Gain) as well as individual institutions on employer engagement 'pilot projects'?
- What is the link between LLNs and Higher Level Skills Pathfinders?
- Will HEFCE be rolling out Higher Level Skills projects to other regions?
- Can institutions outside the Pathfinders apply for funding via the Strategic Development Fund to engage with Train to Gain?
- Can institutions in a Pathfinder region apply for funding via the Strategic Development Fund to undertake employer engagement projects or co-funding?
Co-funding
1. What are co-funded ASNs?
Co-funded ASNs are additional student numbers (ASNs) allocated at a lower rate of funding than 'full funded' ASNs, normally at between 50-75 per cent of a full-time equivalent (FTE) student. We would expect the HEI or FEC to secure from an employer the remaining percentage. For example, an HEI wishing to deliver an HE Certificate (120 credits) to 30 learners may be allocated 15 FTEs by HEFCE and be expected to secure the equivalent of 15 FTEs of funding from employers.
2. Can employer payment of fees constitute co-funding?
Some employers already pay fees for their employees. In allocating co-funded ASNs, we would expect the employer contribution to cover a proportion of the FTEs in addition to the fee. Fee contributions might be paid by the learner or the employer.
For example, for a part-time foundation degree (price group D) we currently (in 2006-07) make an assumption that the institution will charge a £1,200 fee per year. We would expect the institution to secure this, and a contribution of, for example, 50 per cent towards the foundation degree costs. As Standard resource for a part-time foundation degree at price group D is £4,465, HEFCE would provide 50 per cent of £3,265 (£1,632.50) and expect the employer to pay £1,632.50 on top of any contribution towards the fee.
3. What level of co-funding is expected from employers?
We have not set a level of funding. We would like institutions to continue to test what contribution is most appropriate from the employers they are working with. However institutions are currently securing between 25-50 per cent per FTE. In the longer term, we will have to decide how we treat co-funded provision within institutions' mainstream grant. Institutions should not assume that we will continue to fund FTE at the rate we have during the test phase.
4. Can 'in-kind' contributions contribute to co-funding?
We recognise that some employers will wish to make in-kind contributions towards the costs of HE provision. This will be important for sectors which have low levels of resource to spend on training their staff. We are interested in developing a sector-wide approach to in-kind contributions, and would welcome proposals from institutions which seek to test this type of co-funding from employers - specifically, how the value of in-kind contributions should be assessed.
During this pilot phase, we are willing to allocate co-funded ASNs where employers may be making in-kind contributions that enable providers to lower their costs of delivery. Institutions are advised to contact their HEFCE regional consultant or higher education policy adviser to discuss their ideas for in-kind co-funding.
5. How will co-funded ASNs be monitored?
Co-funded ASNs allocated for 2006-07 and 2007-08 will be monitored outside the mainstream allocation; in other words they will not be monitored through the main teaching funding conditional upon delivery of growth targets or institutions' contract range.
For 2006-07 institutions will be required to complete a separate aggregate monitoring return in summer 2007. For HESES07, co-funded ASNs should be recorded as non-fundable. For institutions which have been allocated co-funded ASNs for 2006-07 we will effectively re-allocate the 2006-07 allocation in the second year. The individual SDF award letters to institutions will ask them to flag co-funded activity on their HESA return and to inform us how they will do this.
In the longer term we are seeking to monitor co-funded ASNs as part of mainstream funding but we are still developing our approach to this. Funding ASNs through the mainstream allocation will enable us to minimise both the risk of double counting and the risk that additional funding we provide does not secure additional growth of provision. 2008-09 is the earliest we expect to mainstream co-funded numbers.
Any fully-funded ASNs for employer engagement activity awarded through the Strategic Development Fund in response to Circular Letter 04/2007 will be subject to our usual ASN monitoring arrangements.
6. How will holdback of HEFCE grant apply to co-funded ASNs?
Holdback will apply to co-funded ASNs. If an institution fails to deliver the FTEs awarded for co-funded ASNs, we will hold back funding at a rate which is proportional to the rate of funding which we awarded. Institutions would have an opportunity to make up the target in full in a second year. The recurrent grant tables that we issue each year will confirm the total allocations of funding and student FTEs for employer co-funded provision. Shortfalls against the total FTEs shown will result in a pro rata reduction in this recurrent funding.
If an institution still fails to deliver the FTEs awarded for co-funded ASNs after the second year we would expect to take back the funding relating to the shortfall of ASNs.
7. How should institutions report co-funded ASNs that could also meet Lifelong Learning Network or Higher Level Skills Pathfinder ASN targets?
Institutions involved in one of the three Higher Level Skills Pathfinder projects should ensure that any individual student only counts towards one of these targets. HEIs can decide which students to allocate to which target where both apply.
8. Will HEFCE be funding courses which have previously been designated 'closed' courses?
In our current funding rules, students on 'closed courses' are non-fundable, see HESES06 (HEFCE 2006/36), Annex G paragraph 5g. These are: 'courses that are restricted to certain groups of people and are not generally available to any suitably qualified candidate. For example, where a course is only available to employees of particular companies, that course is closed.'
We apply this rule to ensure best value for money for public funds, but this rule also reflects State Aids regulations which limit public funding contributions that might distort competition within markets. We have taken legal advice which suggests that we should maintain our current regulations. However, State Aids regulations, including exemptions, are under review, and we are taking further advice on funding of courses which we currently deem to be 'closed'.
In determining whether a course is open or closed, factors that we consider are:
- How the programme is marketed: Are there entry restrictions/requirements that suggest it is not open to any suitably qualified candidate? Is it advertised widely, including in general prospectuses, as would be expected of other open courses?
- How bespoke is the course content towards the needs of particular, named employers?
- Where there is a requirement for particular workplace experience/learning, what arrangements are there to ensure all students have an opportunity for an equivalent experience, irrespective of their existing employment circumstances?
- What is the make-up of the student population on the course? If answers to the previous questions suggested that a course was open, but we then found that all the students on the course were employees of a single company, how had that outcome arisen?
In general we do not wish to take a highly restrictive line on these issues. So, for example, a particular course may generally be open, but have a subset of students who are all from a particular company. If, for this subset of students, some general modules were adapted to make them more relevant to that particular company's circumstances, then we would not necessarily see this as a reason for concluding that the subset of students were following a different, closed course. Such practice may occur frequently where a module is a dissertation informed by students' work experience: there may clearly be different focuses for dissertations, depending on students' particular employment.
We encourage institutions to explore how provision can be tailored more effectively to meet an employer's needs in ways which would enable other learners, if they so wish, to access this provision. For more guidance on this issue or to discuss a specific programme contact Sarbani Banerjee (s.banerjee@hefce.ac.uk, 0117 931 7056).
9. How does EU State Aids regulations affect employer engagement provision?
Legal advice we have taken highlights that provision which is highly tailored to meet the needs of employers, or places HEIs in competition with private providers, could potentially be challenged as an illegal state aid. Our initial discussions with the Government's State Aid Branch has underlined that - as HEFCE funding is intended to support accredited provision which meets our own regulations on closed courses - it is unlikely that provision would be successfully challenged as an illegal state aid. However, HEFCE is not able to indemnify institutions from the risk of any such challenge, and institutions are encouraged to follow guidance on the State Aid Branch web-site. The EU is currently reviewing its block exemptions within State Aids regulations, and we are discussing with the State Aid Branch how we can support the HE sector to engage with this review.
10. Can co-funded ASNs be used to provide HE for public sector employers?
HE plays an important role in the development of public services. We wish to encourage co-funding with public sector employers where this provides accreditation at HE level and does not lead to substitution of HEFCE funding for that of other funding bodies. Currently, where other funding bodies' level of funding for HE exceeds the fee, HEFCE reduces its funding in proportion to the rate of contribution.
Institutions seeking to develop co-funded provision with other public funding bodies will need to provide assurance that similar provision is not being fully funded by public employers, and that co-funding will add value to the individual and employer by promoting accreditation as HE.
11. Will co-funded numbers be 'mainstreamed'?
See question 5 above.
12. Will HEFCE fund short courses?
HEFCE's current funding method allows HEIs to report provision down to approximately 0.03 FTE, where 1 FTE is 120 credits. This equates to 3-4 credits. Currently we can only fund further education colleges for prescribed HE provision where students are aiming for one of the HE qualifications that are recognised for this purpose. We recognise that this limits the types of provision which we can directly fund at further education colleges, although these limits do not apply where provision is indirectly funded through an HEI. As part of our review of our funding method for teaching we are exploring how we can recognise the costs of teaching students who complete something other than their initial study intention for the year, but this does not change the student populations that we are empowered to fund at HEIs and FECs.
13. Will institutions be able to bid for fully-funded and co-funded ASNs?
Our current priority within our employer engagement strategy is support for workforce development; in other words HE to support employee development. We would therefore expect employers - as they benefit directly from support - to contribute towards the cost of provision, and that proposals which seek to support employee development will be allocated ASNs on a co-funded basis. This includes foundation degrees, where learners are employees.
Where institutions wish to develop their activity for other forms of employer engagement (such as foundation degrees designed, for example, as progression routes for vocational learners), institutions will be able to request fully-funded ASNs.
Institutions who wish to develop foundation degrees for employees in priority sectors but who are unable to secure employer co-funding should contact their HEFCE regional consultant, as we may be willing to offer fully-funded ASNs for such provision.
14. Will HEFCE fund co-funded postgraduate provision?
Our priority is accredited HE provision at levels 4 to 6 of the Framework for Higher Education Qualifications (FHEQ). However, we wish to encourage institutions to be fully responsive to employers' needs as well as local and regional priorities. We would welcome jointly funded proposals to deliver postgraduate (FHEQ levels 7 and 8) provision where this can be shown to meet employer needs or regional or local priorities.
Train to Gain
15. Why have you funded Higher Level Skills Pathfinders (Train to Gain) as well as individual institutions on employer engagement 'pilot projects'?
The aims of the three Higher Level Skills Pathfinders are to:
- embed HE in employer workforce development and skills strategies regionally, at a business sector level, and nationally
- embed workforce development and skills in HE providers' strategies.
The Pathfinders are building on the Learning and Skills Council's Train to Gain model by putting in place HE specialists to work with employers to identify their higher-level skills needs, and work with HE institutions to develop responsive provision. In this way, the Pathfinders aim to build both the long-term capability and the capacity of institutions to engage with employers. A three-year development fund, provided to each of the three Pathfinder regions, will support HEIs in developing responsive provision. The Pathfinders provide the regional infrastructure for employer engagement which, it is hoped in the longer term, will also promote employer contributions to this type of HE provision.
However, we recognise that institutions have existing relationships with employers, or will attract business outside the Pathfinder mechanism. Moreover, the Higher Level Skills projects are taking place in just three regions. The additional pilot projects which we are inviting through HEFCE Circular letter 03/2007 support individual institutions primarily to test the model of ASNs co-funded by employers. The pilot projects are also testing particular modes and forms of provision, such as APEL, e-learning, short courses or accreditation of in-house company training, all of which may be attractive to employers to support workforce development. This work on innovative delivery will also complement the Pathfinder activity.
16. What is the link between LLNs and Higher Level Skills Pathfinders?
The relationship between the Lifelong Learning Networks (LLNs) and the Pathfinders varies for each region, depending on the model being piloted within the Pathfinder. HEFCE has not prescribed which structures should be involved in the Pathfinders. Key stakeholders in each region were asked to develop a region-wide model and to investigate how HE could most effectively link to Train to Gain in a way that responded to existing regional needs and structures. In some cases LLNs were identified as a key mechanism for that region; in other regions other mechanisms were identified, such as knowledge transfer units. In general the Lifelong Learning Networks are focused principally on vocational progression for learners from Level 3 to 4 and above. Clear progression pathways require agreements to be reached between participating institutions, providing bridging provision or, say, recognising experiential learning, where necessary. Curricula are developed in partnership with employers, to ensure the content is both relevant and valued.
The Higher Level Skills Pathfinders are also working with employers to ensure curricula are responsive and sufficiently flexible to support learners' needs. The Pathfinders can be seen as a gateway mechanism for engaging employers, and the Lifelong Learning Networks as a kind of framework for enabling learner progression. LLNs are at different stages of development, and HEFCE has asked that, as LLNs mature, they and the Pathfinders work together locally to agree their project boundaries and their shared remit.
We intend to evaluate the relationships between the LLN and Higher Level Skills Pathfinder initiatives as part of the interim evaluation of LLNs. Institutions wishing to offer feedback on their experiences can do so through the LLN National Forum.
17. Will HEFCE be rolling out Higher Level Skills projects to other regions?
We will explore future funding possibilities following the Comprehensive Spending Review (CSR) in 2007. In the meantime, HEFCE will be encouraging partnerships in non-Pathfinder regions to consider how they can prepare for this agenda. HEFCE is willing to fund proposals from non-Pathfinder regions, noting that sustainability funding is dependent on the CSR outcome.
18. Can institutions outside the Pathfinders apply for funding via the Strategic Development Fund to engage with Train to Gain?
See Question 17.
19. Can institutions in a Pathfinder region apply for funding via the Strategic Development Fund to undertake employer engagement projects or co-funding?
Yes, although institutions will need to show that they have consulted their regional Pathfinder to ensure there is no duplication of activity.