Invitation 00/32

Funding for poor estates

Feedback on 2000-01 bids and invitation to bid for 2001-02

This version of the document contains the main text and Annex B only, and is also available as a pdf file (36K).

The full document is available in Word (1.9Mb). Annex A - Project definition form - is also available in Word (73K).

1. Executive summary

   Purpose

2. This document provides feedback on the third round of bids for HEFCE funds to improve poor estates, in the financial year 2000-01, and invites bids for the fourth round for the financial year 2001-02.

   Key points

3. There were 30 successful institutions in 2000-01 (31 bids), to which we provided £74 million in project funding.
4. We expect to allocate £30 million in 2001-02, using largely the same assessment criteria as last year.

   Action required

5. Bids for 2001-02, using the form at Annex A, must be returned by midday on 23 October 2000. Please send the original and five double-sided unbound copies of the application form and annexes.

   Background

6. To help universities and colleges improve poor estates, we are providing £250 million through the initiative. Details were first given in consultation paper 3/97; successful projects for 1998-99 were announced in HEFCE 98/26; successful projects for 1999-2000 were announced in HEFCE 99/22; and successful projects for 2000-01 were announced in HEFCE 00/11.

   Feedback

   Size and type of project

7. We received 128 bids for funds from 101 institutions, requesting nearly £288 million. Projects varied in size from £0.5 million to £35 million. (See Table 1 below.)

   Table 1 Project size of bids in 2000-01

   

8. The total net area of successful bids was 243,016 m², representing 15 per cent of those institutions’ total net estate. The bids affected buildings that ranged from 741m² to 29,117m².
9. We funded slightly more refurbishment/adaptation projects than new-build.
10. A wide variety of projects was submitted: the most popular being for general teaching, which accounted for 53 projects as shown in Annex B.
11. There were 30 successful institutions in 2000-01, of which 12 were also funded in the 1999-2000 round of the initiative.

    Assessment

12. The criteria applied in assessing the projects were: impact, need, coherence with the institution's strategy, value for money, estate management achievements, investment in the estate and ‘further criteria’. The assessment procedure also took account of projects that could show particular benefits, such as improving student access, scope for collaboration, or better cohesion of an institution on several sites. Wherever possible, bids were assessed using quantified data, modified by qualitative information supplied by institutions in their bid document.

    Impact

13. The primary data used in assessing the impact of the project were the number of people affected and the area of the project. However, this was modified by evidence that the project might benefit the student experience, affect morale in a particular way, or have some other impact. Nevertheless, institutions that submitted projects that affected most of their students and a significant area were likely to fare better under this criterion.
14. The table below demonstrates that on average, successful bids benefited a greater percentage of staff and students and affected a greater area of the estate than unsuccessful bids.

    Impact	All bids submitted	Successful bids
    Staff and students affected	77%	95%
    Net estate area affected	24%	39%

15. The percentages in the table represent either the whole institution or where applicable, the relevant campus of a multi-campus institution.
16. Over 251,568 staff and students will benefit from the successful bids in 2000-01.

    Need

17. The primary information used to assess need was the condition of the buildings. Institutions were asked to describe the condition of their total estate using the standard Royal Institution of Chartered Surveyors (RICS) Building Maintenance Information definitions:

    A. As new.

    B. Sound, operationally safe, exhibiting only minor deterioration.

    C. Operational, but major repair or replacement needed soon.

    D. Inoperable or serious risk of failure or breakdown.

18. For all institutions that bid in 2000-01, 38 per cent of the estate was in condition C and D. For those institutions that were successful, the figure was 47 per cent. Table 2 shows the overall condition of the estate of institutions that submitted bids. There was wide variation, from those with virtually all their estate in categories A and B (in one case with up to 86 per cent in category A) to those mostly in categories C and D (for example, one with 91 per cent in C and another with 41 per cent in D).

    Table 2 Condition of estates for institutions bidding in 2000-01

    

19. The improvement in the condition of the funded buildings will be as shown below:

    Condition of project building	A	B	C	D
    Before	5.0%	23.0%	37.4%	34.6%
    After	75.3%	19.3%	5.0%	0.5%

    Strategy

20. The information provided to show coherence with the institution's strategy was variable. Successful bids tended to be those where there was a readily identifiable link between the strategy and the project.

    Value for money

21. Value for money information was derived from cost data, together with the benefits and returns indicated by the preliminary option appraisal. Table 3 shows the range of building construction costs per m² gross floor area for the most popular types of project submitted.

    Table 3 Construction costs per m²

    

    Previous investment in the estate

22. We used data provided by the sector through finance returns to the Higher Education Statistics Agency (HESA) so that institutions that had failed to invest in their estate were not rewarded. Institutions funded under the initiative had committed an average of 15 per cent of income to their estates over the previous four years. This compares with an average of 13 per cent for all institutions that bid.

    Estate management achievements

23. Achievements were variable in the sector, but for funded bids the figures for the period 1993 to 1999 were as follows. Institutions fared better where they could quantify achievements.
    1. Average increase in space utilisation: 44 per cent.
    2. Average reduction in energy consumption: 11.7 per cent.
    3. Average reduction in estate management costs: 7.5 per cent.
    4. Average reduction in condition C: 35 per cent.
    5. Average reduction in condition D: 59 per cent.

    Invitation to bid

    Key points

24. This is the fourth round of the poor estates initiative, which supports major refurbishments, projects to make more efficient use of space, and new-build.
25. Due to the limited funding available this year, only one bid may be submitted.
26. This year, priority will normally be given to bids from institutions with a high proportion of poor quality space and to projects concerned with major estate rationalisation.
27. We will normally fund 50 per cent of project costs, although exceptionally we may agree higher levels of funding.
28. The first three years of the initiative were heavily over-subscribed. We expect to distribute £30 million in 2001-02, and will limit the cumulative funds awarded to individual institutions to £8 million with a maximum for any one year of £4 million. The assessment criteria are largely the same as last year, although there are minor modifications to the bid document.

    Action required

29. There will be a single-stage bidding process. Submissions, using the project definition form at Annex A, should be returned by midday on 23 October 2000.

    Eligible projects

30. Poor estates funding is directed towards major refurbishments, projects to make more efficient use of space, and new-build.
31. We will give priority to large-scale projects that will make a significant difference in enabling institutions to develop. We are not looking to fund small-scale marginal developments. We will not fund work on residences; also, we will not normally support projects that only ensure compliance with legislation, are predominantly maintenance works, or are self-financing, such as projects to improve energy efficiency.
32. This year, priority will normally be given to bids from institutions with a high proportion of poor quality space and to projects concerned with major estate rationalisation.
33. Projects must have started on site after 1 April 2000 and usually before September 2002.
34. We will normally fund 50 per cent of project costs, although a higher level of funding may be agreed in exceptional circumstances. Matched funds can be drawn from any source, and external funding is encouraged. We may require some institutions to repay grants over a period of up to 10 years. Repayment provisions may be included within the terms of any grant.

    Bids

35. Due to the limited funding available this year, only one bid may be submitted.
36. To ensure that the initiative is directed at key projects that cannot readily be funded from elsewhere, the value of the overall project should be at least £500,000 or 5 per cent of 1998-99 recurrent income, whichever is the lower. Grants to an individual institution are unlikely to exceed £4 million in any single round of the initiative.
37. Institutions should submit six copies of their bid using the project definition form at Annex A and, if they wish, up to four A4 sheets of supporting material. Any additional material will be disregarded.
38. This document and the form are available on our web-site at http://www.hefce.ac.uk/ under ‘Publications’.

    Assessment criteria

39. Bids will be assessed against the following criteria:
    • impact on the estate, measured in terms of the number of students and the floor area affected by the project relative to the institution as a whole, or, where appropriate, to an individual campus
    • need, in terms of the overall condition of the estate, favouring institutions with the worst estates
    • coherence with the institutional and estate strategies, and the significance of the project, for example in enabling the institution to achieve its mission
    • overall value for money of the project in terms of project cost and improvement in the condition of affected buildings
    • the level of previous institutional investment in the estate, with priority given where such investment has been high
    • achievements in estate management
    • further criteria that support the project.
40. An advisory panel drawn from the HEFCE Board and the sector's representative bodies (CVCP and SCOP) will review the projects.

    Successful projects

41. We will announce the outcome of bids in March 2001. Offers will be made subject to confirmation that:
    • an investment appraisal has been conducted conforming to criteria specified by the Council
    • procurement will be undertaken in accordance with good practice
    • matched funding is in place, and details of financing and expenditure cash flows are provided.
42. Grants may also be conditional on a site visit.
43. We will fund bids on the basis of cash flow projections and known contract sums. At the end of the project, institutions must submit an audit report.

    Timetable

44. The timetable for the fourth round will be as follows:

    Invitation to bid	July 2000
    Bids received	Midday on 23 October 2000
    Screening process	November and December 2000
    Panel assessment	January 2001
    Panel review meeting	early February 2001
    Final decision	22 February 2001
    Announcement of grant awards	March 2001

    Date of return

45. Six copies of the project definition form should be returned by midday on 23 October 2000 to:
    Nikki Sutton
    HEFCE
    Northavon House
    Coldharbour Lane
    BRISTOL
    BS16 1QD
46. We will not consider late bids, but bids posted first class and postmarked on or before 21 October 2000 will be accepted.
47. If you require an acknowledgement of receipt, send an e-mail to Nikki Sutton (n.sutton@hefce.ac.uk) who will confirm by return.

Annex A

Project definition form

This is available as a Word document.

Annex B

Projects submitted in round 3 (2000-01)