Why the project was launched
The Financial Sustainability Strategy Group (FSSG) initiated this project in 2010 to investigate how UK HEIs can assure their governing bodies on the sustainability of their institutional plans. This was prompted by the recommendations of the report ‘Financial Sustainability and Efficiency in Full Economic Costing of Research in UK Higher Education Institutions’ (2010; known as the Wakeham Review), and was further supported by the HEFCE Review of TRAC undertaken in 2012.
'We recommend that HEI governing bodies take a more proactive role in assuring themselves that there is an institution-wide strategy for financial sustainability and that the HEI has developed measures that assess the extent to which this is being achieved.
'We recommend that HEFCE should consider how a consistent set of metrics can be incorporated into its annual accountability review process of an institution; and that the Funding Councils in the devolved administrations should consider how such a set of metrics can be incorporated into their equivalent processes.'
Wakeham Review recommendations, 2010
In 2010, J M Consulting was engaged on behalf of FSSG to conduct a UK-wide study to develop indicators of sustainability for use by UK HEIs in managing their futures, and to provide assurance to their funding and regulatory bodies. The report ‘Assessing the sustainability of higher education institutions’ (June 2011) made recommendations which formed the basis for development of both the ASSUR and the MSI.
ASSUR and MSI pilot exercises
The Annual Sustainability Assurance Report (ASSUR) pilots concluded in 2015, and the ASSUR is now established as a method for institutuions to assess their sustainability.
Further testing and refinement of the Margin for Sustainability and Investment (MSI) took place in 2016 and 2017, as outlined in the MSI implementation report.
Initial pilot exercise 2012
An initial pilot project was run with 35 volunteer HEIs in 2012, to put the recommendations of the June 2011 report into practice. This resulted in the development of the MSI and the first ASSUR template, as described in ‘Annual assessment of institutional sustainability - Report on the pilot project’ (December 2012).
Subsequent pilot exercises have informed further refinements of both the ASSUR template and MSI.
Pilot exercises 2013 to 2015
All UK HEIs were invited to submit an ASSUR to their respective funding councils in December 2013, December 2014 and December 2015 and to include their calculations of the Margin for Sustainability and Investment (MSI) in their Annual TRAC returns for the three years 2012-13 to 2014-15.
The key findings from the independent evaluation of the third pilot exercise were:
- ASSUR remains an important means through which a university governing body can provide evidence of their assessment of institutional sustainability. ASSUR submission should be embedded in the funding councils’ annual accountability process (as supported by the Higher Education Code of Governance).
- The Margin for Sustainability and Investment (MSI) should be adopted to replace the two TRAC sustainability adjustments, the Return for Financing and Investment (RFI) and the Infrastructure Adjustment, in TRAC from 2016-17, subject to the 2015-16 reporting made under the new accounting standard FRS 102 and to final approvals from Research Councils UK and the FSSG.
FSSG, Research Councils UK and the UK higher education funding councils committed to further work to:
- validate and expand upon the findings of the evaluation reports
- finalise a timetable and implementation notes for the introduction of MSI as a replacement for the TRAC sustainability adjustments (now complete - see further information on MSI implementation).
- Report on the implementation of the Margin for Sustainability and Investment (November 2017)
- The ASSUR and MSI 2014-15 evaluation (September 2016)
- Report on the evaluation of the 2013-14 Annual Sustainability Assurance Report Pilot (PDF) (January 2016)
- Letter to Directors of Finance, Heads of Administration, Registrars/Secretaries of UK higher education institutions: Annual sustainability assessment by institutional governing bodies (20 March 2015)
- Report: Evaluation of the Annual Sustainability Assurance Report pilot (March 2015)
- Letter to Registrars, Chief Operating Officers and Directors of Finance of UK higher education institutions: Annual sustainability assessment by institutional governing bodies (6 August 2014)
- Letter to Chairs of Governing Bodies and Heads of UK higher education institutions: Annual sustainability assessment by institutional governing bodies (23 January 2013)
- Report: Annual assessment of institutional sustainability - Report on the pilot project (December 2012)
- Report: Assessing the sustainability of higher education institutions (June 2011)