Report 01/12Recurrent grants for 2001-02
Read on-lineReport - Recurrent grants for 2001-02DownloadReport and annex[ MS Word 74K | Zipped MS Word 17K | PDF 35K | Zipped PDF 29K ] TablesTable 1 Resources for academic year 2001-02 (provisional) Table 2 Comparison with 2000-01 academic year grant Table 3 Distribution of Maximum Student Numbers (MaSNs) Table 4 Generic research qualifying income (total of two years 1998-99 and 1999-2000) and percentage of GR qualifying income to total external research income* Executive summaryPurpose1. This document summarises our provisional allocations of recurrent funding and maximum student numbers to institutions for the academic year 2001-02. 2. The HEFCE Board agreed the allocations on 22 February 2001. We wrote to all institutions individually on 27 February 2001. Key pointsGeneral3. All years relate to academic years. 4. We are distributing £4,757 million in 2001-02. This has allowed us to maintain the unit of funding for teaching and research in real terms and to fund an additional 31,900 full-time equivalent (FTE) places for 2001-02. It will also provide an additional £100 million for capital funding and £80 million for rewarding and developing staff in higher education. 5. The total comprises £3,162 million for teaching, £888 million for research, £387 million for special funding, £240 million for earmarked capital funding, and £80 million for academic and support staff pay. Teaching6. The total of £3,162 million for teaching for 2001-02 includes the following:
Research7. A total of £888 million is allocated for research. Of this, £868 million is distributed by reference to quality criteria (QR), and £20 million by reference to generic research activity (GR) carried out in association with users of research. Moderation of teaching and research8. To help maintain stability for institutions, we will continue our policy of phasing in changes by moderating the allocations. No institution will receive a reduction in resource (teaching and research grant, plus regulated fee income) of more than 2 per cent in real terms compared with the equivalent figure for 2000-01. Special funding and earmarked capital9. Most of our grants for teaching and research are allocated by formula. In addition, we distribute special funding for specific purposes. In 2001-02, this funding totals £387 million. We will also allocate a further £240 million for earmarked capital grants, and £80 million for rewarding and developing staff in higher education. Student numbers10. We have provided for an additional 31,900 FTE students for 2001-02. Of these, 10,700 have been allocated through the most recent bidding exercise announced in HEFCE 00/39. 11. The DfEE requires us to ensure that the actual number of full-time and sandwich undergraduate students does not exceed the Government's target. To do this we define a maximum student number (MaSN) for each institution. This is a target number of home and EC students (excluding those funded by the NHS) who are on full-time or sandwich undergraduate courses, or on courses of initial teacher training (ITT). 12. We also set targets for FTE student numbers to ensure that institutions deliver the overall growth in recruitment expected of them arising from successful bids for additional student numbers. 13. We will continue to monitor recruitment to foundation and sub-degree courses, to ensure that planned increases are delivered. Action required14. No action is required in response to this document. Elements of grant15. The total distribution to institutions in 2001-02 is £4,757 million, allocated as follows:
16. Our funding methods for teaching and research, as they applied in 1999-2000, are described in HEFCE 00/07, 'Funding higher education in England: how the HEFCE allocates its funds'. An updated version of this document will be available shortly. Our funding methods are designed to operate at the sector level and in broad terms. It is not necessarily appropriate for individual institutions to replicate them when allocating funds internally. 17. The allocations announced in this document are provisional. We will finalise them by July 2001, when we issue each institution's funding agreement. There may be rounding differences between individual figures and totals. Funding for teaching18. The funding for teaching of £3,162 million is higher than the amount announced in Electronic Publication 16/00, 'Funding decisions for 2001-02', owing to a further transfer of funding from the Department for Education and Employment (DfEE). The allocations for teaching shown in Table 1 total £3,147 million, made up as follows:
19. A full explanation of the data in Table 1 is at Annex A. The balance of the £3,162 million available covers provision for allocations to be announced later in the year. These include, for example, the new funding stream for institutions with less than 80 per cent of students from state schools and further education colleges, to support outreach work and raise the aspirations of state educated pupils. We consulted on this in HEFCE 00/50, 'Funding for widening participation in higher education: new proposals 2000-01 to 2003-04'. 20. Funding for additional funded places includes £36 million allocated in response to the bids for 2001-02, invited in HEFCE 00/39. We notified institutions of the additional places offered in February. The balance of £42 million comprises:
21. Funding for widening access and participation includes £28 million to recognise the additional costs of recruiting and supporting students from disadvantaged groups that are under-represented in higher education; and £8 million to recognise the additional costs of recruiting and supporting disabled students. Funding for research22. The total funding for research is £888 million. Of this, £868 million is quality-related (QR) funding, the distribution of which reflects ratings in the 1996 Research Assessment Exercise; and £20 million is allocated as generic research (GR) funding, which is discussed in paragraph 25. 23. Details of the funding method for research are described in HEFCE Circular 4/97, 'Funding method for research from 1997-98' and HEFCE 00/07. These publications explain how the total amounts for each subject (the subject quanta) have been set, and how these amounts are distributed between institutions, taking account of the quality and volume of their research. 24. HEFCE Circular 4/97 explained that we would keep the proportions of QR attributable to each of the research volume elements broadly constant in future years. For 2001-02, we have therefore adjusted the weighting that we apply to income from charities to ensure that the proportion of QR attributable to this source remains unchanged compared with 2000-01, and so rises in line with GDP inflation of 2.5 per cent. The weighting has therefore been reduced from 0.250 to 0.228. 25. GR funding allocations are made in proportion to each institution's GR qualifying income. Qualifying income is the amount received from users of research, for collaborative projects where the institution retains the intellectual property and publication rights. For the sector as a whole, GR qualifying income for 1998-99 and 1999-2000 totalled £766 million. Table 4 shows GR qualifying income in total and as a percentage of total external research income for each institution. Special funding and earmarked capital26. Electronic Publication 16/00 announced allocations of £355 million in special funding and £262 million in earmarked capital funding. Since then, £22 million of earmarked capital funding (£20 million to contribute to capital costs of increased medical intakes and £2 million for subject centres) has been reclassified as capital within special funding, to bring together all funding for these programmes. Earmarked capital therefore now totals £240 million. A further £10 million has been added to special funding from funds set aside to provide a flexibility margin, making a new total of £387 million. The special funding allocations that have been agreed total £67 million and are included in Table 1. These allocations cover funding for higher education reach-out to business and the community (£22 million), collaborative research (£18 million), minority subjects and Chinese studies (£4 million) and funding for some national facilities and inherited activities (£23 million). The balance of £320 million includes both claims-based elements and formula-based special funding allocations that are still to be finalised. Rewarding and developing staff in higher education27. In December we issued a publication (HEFCE 00/56) to consult with institutions on our proposals for distributing the extra funds made available by the Government for rewarding, retaining and developing staff in higher education. In March we will confirm the allocations for 2001-02 and invite institutions to submit human resource strategies, upon which those allocations are conditional. The funding available for this in 2001-02 is £80 million. Moderation28. To help maintain stability for institutions in their financial management, we will continue our policy of phasing in changes by moderating the allocations. No institution will receive a reduction in resource (teaching and research grant, plus regulated fee income) of more than 2 per cent in real terms (using the GDP deflator) compared with the equivalent figure for 2000-01. This represents a minimum increase in cash terms of 0.5 per cent. Any subsequent changes to teaching or research grants for individual institutions will change the provisional moderation shown here. We review our moderation policy annually. 29. We do not moderate for reductions in funding for additional student places that were not filled. We apply a minimum threshold of £50,000, below which moderation does not apply. Student numbers30. We have provided for an additional 31,900 FTE students in 2001-02. The distribution of these places is as follows:
31. The new places awarded for 2001-02 comprise: 10,700 FTEs awarded through our most recent bidding exercise announced in HEFCE 00/39; 7,900 FTEs awarded through phased allocations from earlier bidding exercises; 1,400 FTEs for prototype foundation degrees; 900 FTEs for increases in medical student numbers; 500 FTEs to support diversification out of ITT; and 1,300 FTEs for institutional transfers into the public sector and restructuring. The 9,100 places rolled forward from 2000-01 were allocated through earlier bidding exercises. 32. On 29 January 2001 we wrote to all institutions, giving their provisional maximum student numbers for 2001-02. The final MaSNs for all institutions are shown in Table 3. They incorporate changes to accommodate further growth arising from the allocations for additional student numbers for 2000-01 and 2001-02, and also to allow for migration under our funding method for teaching. 33. The purpose of the MaSN is to ensure that the planned number of students subject to overall control is not exceeded, as required by the Secretary of State. It applies to:
34. MaSNs relate to all relevant students recruited throughout the academic year, and include those who do not complete their year of study. 35. We will continue to monitor institutions' recruitment against the MaSN through the Higher Education Students Early Statistics (HESES) and Higher Education in Further Education: Students (HEIFES) surveys, and subsequent returns to the Higher Education Statistics Agency (HESA) or the Learning and Skills Council (LSC). 36. If institutions recruit in excess of a permitted margin above their MaSN, we will hold back grant equivalent to the student fee, to ensure that they will receive no financial benefit. The permitted margin is specified in absolute terms on each institution's individual grant tables. The MaSN margin was raised from 2 per cent to 4 per cent in 2000-01, and the Board has confirmed that the higher limit of 4 per cent should also apply in 2001-02. 37. Institutions are responsible for managing their recruitment to comply with the MaSN control. They should assume that their MaSN for 2002-03 will be no higher than that announced for 2001-02 (except where they are allocated additional student numbers in the relevant categories), and should plan recruitment on that basis. 38. Last year, we introduced overall targets of FTE student numbers for institutions that had been awarded additional funded places through our general bidding exercises. We have again set such targets for 2001-02 to ensure that, where we have provided additional funding, institutions deliver the expected increases in their overall student numbers. The grant letters to individual institutions specify overall FTE targets if either the growth in 2000-01 has not yet been delivered, or we have awarded additional places for 2001-02. The grant letters also identify the funding that is contingent upon those FTEs being delivered. 39. We give institutions two opportunities to deliver the growth expected from their successful bids for additional places. Institutions that did not deliver the growth expected of them in 2000-01 will have had funding for their additional places reduced in that year. They will be able to recover the funding deducted in 2001-02 if they make good the shortfalls from the previous year. Similarly, institutions that do not deliver all the additional places for which we have provided funding in 2001-02 will have some or all of that funding withheld. They will have an opportunity to recover the funding withheld in 2002-03, subject to sufficient recruitment. 40. We wish to ensure that planned increases in the number of students on foundation degrees or courses below degree level are delivered. We have therefore set separate foundation and sub-degree targets for institutions that have been allocated additional funded places for such courses in 2001-02. These targets are also specified in institutions' individual grant letters. Conditions of grant41. Our grants to institutions are conditional on the funds being used for the eligible activities set out in section 65(2) of the Further and Higher Education Act 1992. The conditions of grant that apply to funding are given in the model Financial Memorandum between the HEFCE and institutions (HEFCE 00/25), published in June 2000. 42. In July we will send institutions their funding agreement for 2001-02. This will form Part 2 of the Financial Memorandum between the HEFCE and each institution. It will specify the conditions, in terms of the levels of teaching activity, which we attach to our teaching funding. 43. Universities and colleges are expected to follow government policy on public sector pay by taking account of: fairness; the need to recruit, motivate and retain staff; and affordability within the limits set by the Secretary of State's letter to our Chairman of 29 November 2000. 44. The Secretary of State has made it clear that he expects institutions not to charge students, who have been assessed as eligible for support, more than a prescribed amount in fees. The prescribed amounts are given in Electronic Publication 03/01, 'Tuition fees for 2001-02', as:
45. Where the Secretary of State specifies an institution, we will be required to impose a condition on our grant to the institution to ensure that the fees payable by students assessed as eligible for fee support on designated courses should be equal to the prescribed amount. 46. Our Financial Memorandum with institutions contains sections on providing information. These information requirements are part of the terms and conditions attached to the funding for 2001-02. Details are contained in the letters to institutions, dated 27 February 2001. Audit of funding data47. The allocations of funds for teaching and research are informed by the data we collect from institutions. We will continue to audit these data selectively in this and future funding exercises. 48. We will make a number of audit visits, covering the full range of data provided by institutions to inform the 2001-02 funding allocations. In addition, we will use data which institutions provide to HESA or to the Further Education Funding Council or LSC to verify the data they submit directly to us. If we subsequently find that erroneous data have resulted in institutions receiving higher allocations than would otherwise have been the case, then the funding for those institutions will be reduced accordingly. Further information49. Institutions requiring further information should contact their HEFCE higher education advisers. |
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