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Circular letter number 19/2003
For further information contact Tracy Allan, tel 0117 931 7025, e-mail t.allan@hefce.ac.uk
Dear Vice-Chancellor or Principal
Golden hellos: outcome of consultation and funding allocations
1. This circular letter advises of changes to the proposed operation of the HEFCE staff recruitment incentives scheme, known as 'golden hellos', made in response to input to our consultation in March (HEFCE 2003/13). It advises institutions of the steps they need to take to activate funding, and shows allocations of funding by institution.
Background
2. Our commitment to introduce this staff recruitment incentive was made in the context of the Government's target of 50 per cent of young people progressing to higher education, with golden hellos being one element of the package of measures needed to deliver that target. We consulted with the sector on our initial proposals for the implementation and operation of the scheme in March (HEFCE 2003/13).
3. We proposed that each golden hello should be worth £9,000. Since the emphasis of the scheme should be on improving the quality of teaching, we proposed that only those staff whose contract of employment includes a significant teaching commitment would qualify. In addition, we wanted to find a way of promoting retention in addition to recruitment, so we proposed that the £9,000 payment would be made to the new teacher over three years, in annual supplements of £4,000 in the first year, £3,000 in the second, and £2,000 in the third year.
4. As the Government's election manifesto commitment had made clear, the incentive was to be aimed at shortage subject areas. The annual recruitment and retention survey commissioned by UCEA , and the Council of Heads of Medical Schools (CHMS) survey of clinical academic staffing levels enabled us to identify the six subjects currently suffering the most difficulties in recruitment or retention. We proposed that funds would be distributed on the basis of the teaching costs of these six shortage subjects.
5. In designing the scheme we sought to keep the burden of accountability to a minimum. To ensure consistency and fairness across the sector, we proposed to steer the scheme by establishing key eligibility criteria - a code of practice - including which shortage subjects would be supported. By limiting prescription we hoped to encourage institutions to be as innovative as possible to maximise the potential benefit.
6. We consulted on these proposals in March (HEFCE 2003/13), requesting responses by the end of April.
Response to consultation
7. We received 84 responses to the consultation, with over half the respondents broadly in support of the initiative. Many welcomed the additional funding to tackle issues with recruitment and retention, but suggested changes to certain proposals.
8. A point made repeatedly by the responses was that the scheme must be useful and workable for HEIs. Support was expressed for our proposal that HEIs should manage the scheme locally, following HEFCE guidance through a code of practice, thus minimising bureaucracy. A significant number, however, expressed concerns that the code of practice, as proposed, was inflexible; they made suggestions about how it might be improved. We have, where appropriate, taken into account criticisms about the perceived lack of flexibility in the application of the scheme, and have changed the code of practice to reflect this (see Annex A). In addition, we have inserted new clauses allowing HEIs to vire funds between years if necessary, and reminding HEIs of their obligation to ensure that their methods of allocation comply with equal opportunities legislation.
9. We should remain mindful of the need for the Government to fulfil its manifesto commitment. For this reason, we do not intend to amend certain essential criteria of the scheme. For example, the scheme is intended to reward new teaching staff, so we do not intend to make researchers eligible. Many HEIs did not agree that we should choose which shortage subjects would benefit from the scheme. We believe that it is important that shortage subjects are nationally defined, in order that the limited funding is targeted at national priorities. It also enables us to make better use of a limited amount of money, rather than reduce its effectiveness through dissipation among numerous subject areas. A small number of respondents sought to have subjects allied to medicine included, but this would be a decision for the Department of Health. For these reasons we propose that we do not change the shortage subject areas originally proposed, but will monitor recruitment and retention surveys annually to ensure that the shortage subjects remain relevant.
10. Our proposal that each golden hello should be worth not less than £9,000, and paid across three years, provoked a wide-ranging debate with little consensus. A number of HEIs sought greater flexibility in spending the additional funding, while acknowledging the political constraints. Some institutions felt there should be a single payment upfront, others that it should be spread over a longer period. Some believed the payment should decrease over time, some that it should increase over time, and others that it should be split evenly across the three years. In framing the proposal we were conscious of the need to achieve a balance between providing both recruitment and retention incentives. The proposed payment profile recognises the challenge of attracting new staff and therefore makes the largest payment in the first year. Institutions are free to supplement the payments from their own resources if they consider it necessary. We believe that it is right to adopt a national approach in order to avoid the risk that HEIs will increase the first year's payment to gain a competitive advantage. If this occurred and less money was available for the later years, the retention objective of this scheme would be undermined. For these reasons we believe, on balance, that the payment profile should remain as originally proposed. We will ensure that this issue is included in the evaluation of the scheme.
Next steps
11. Funding for golden hellos will be released to HEIs on a monthly basis, paid with the block grant (allocations are shown at Annex B), which we intend to start paying from August 2003. To activate these payments, HEIs need to tell us whether they intend to take part in the scheme, by signing and returning the form at Annex C.
Yours sincerely
Howard Newby
Chief Executive
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