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18 June 2004

Report shows reduced accountability burden on HE sector

The costs to higher education institutions of accounting for the use of public funds has been reduced by around 25 per cent in real terms, according to a report published this week.

'Better Accountability Revisited' (notes 1 and 2), commissioned by HEFCE from PA Consulting, gives an estimate of the cost of accountability to HEIs of £211 million in 2004 compared to £250 million per year in 2000 (equivalent to £280 million at 2004 prices - note 3). The figure of 25 per cent probably underestimates the proportionate reduction because of an overall increase in funding. It should also be considered against general changes in accountability practice in all sectors, particularly in risk management requirements.

The report 'Better Accountability Revisited' lists a number of changes to accountability that have taken place, or are planned, that have had an impact on HEIs. Some of these are a result of HEFCE policy while others have been instigated by other stakeholders, including actions stemming from the Government's HE White Paper. In some cases, the additional accountability reflects new funding streams, such as for business and community activity.

The report covers a wide range of impacts and burdens on institutions, including providing information for financial accountability, quality assurance processes and competitive bidding processes.

Significant changes highlighted in the report include:

  • Quality management and assurance - changes in the arrangements for teaching quality assurance, under the Quality Assurance Agency, have been made. The sector has moved from subject based Teaching Quality Assessments to a system (QAA Institutional Audit) based on assurance of institutions' own quality management processes.

  • Bidding and tendering - HEFCE has eliminated a number of separate competitive bidding programmes by allocating funds to institutions on a formula basis, provided institutions produce acceptable plans for use of the funds. There have however been some new discretionary funding schemes introduced since 2000, involving additional bidding requirements.

  • Consultations - HEFCE has always sought to consult the sector on proposals for changes in policy or funding schemes. However in 2003, the number of consultations rose considerably, partly as a result of the Government White Paper, but also from HEFCE.

Steve Egan, HEFCE Director for Finance and Corporate Resources, said:

"We are pleased that there has been a significant reduction in the accountability burden but we are also committed to continuous assessment and improvement to reduce the accountability burden still further, where possible."

Minister for Lifelong Learning, Further and Higher Education Alan Johnson said:

"The finding that bureaucracy for higher education institutions has reduced by 25 per cent is excellent news. It represents very real progress and reflects the hard work by many people in the sector over recent years to minimise excessive bureaucracy. I am confident that with the dedicated efforts of HEFCE and other stakeholders, we will build on this success and embed good regulation across our ambitious agenda for higher education."

Notes

1.    Better Accountability Revisited: Review of Accountability Costs 2004 is available. PA Consulting was asked by HEFCE to assess the impacts of external accountability demands on HEIs - as required by HEFCE and other stakeholders - and to advise whether the perceived (and measured) burdens had increased or decreased.

2.    The previous report by PA Consulting: Better Accountability for Higher Education (HEFCE 00/36) is also available.

3.    Total income of HEIs in England is around £13 billion per year; the costs of accountability, as calculated, are therefore around 2 per cent of income.