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19 May 2005 HEFCE logo
To  Heads of HEFCE-funded higher education institutions
Heads of universities in Northern Ireland
Direct Line 0117 931 7300
Direct Fax 0117 931 7203

Circular letter number 13/2005

For further information contact Andrew Beazer, tel 0117 931 7223, e-mail a.beazer@hefce.ac.uk

Dear Vice-Chancellor or Principal

Transparency Review data reported for 2003-04

1.    I am writing to report data on costs received for 2003-04 from universities and colleges in this fifth round of reporting under the Transparency Review. No action is required in response.

2.    The Transparency Review data include two major adjustments to the expenditure values reported in institutions' audited financial statements. These adjustments provide an estimate of the full economic costs of institutions' activities. In the 2003-04 academic year the value of these adjustments across the sector was 8.5 per cent, or £1,163 million, reflecting the extent to which full economic costs exceeded actual recurrent expenditure.

3.    Annex A presents overall data on costs for 2003-04, and shows results for HEIs in both England and the whole of the UK. Previous years' data are provided for comparison. Further information on the Transparency Review and the transparent approach to costing (TRAC) is available on the web-site of the Joint Costing and Pricing Steering Group (www.jcpsg.ac.uk).

4.    Following a review of financial reporting and activity costing, further work recommended by the review is now almost complete:

  1. For 2004-05 (January 2006) the annual Transparency Review reporting return will include both income and full costs across the five categories for TRAC reporting. Revised guidance was provided earlier this month (see HEFCE Circular letter 10/2005).

  2. The quality assurance process, established by the UK funding bodies and the Research Councils to provide independent assurance to a range of stakeholders on the robustness of the original TRAC implementation within HEIs (see HEFCE Circular letter 05/2004), is almost complete and a final report will be issued to the sector shortly.

  3. A study on the calculation of the economic adjustments applied to institutions' reported expenditure is still ongoing. The study focuses on the infrastructure adjustment and cost of capital adjustment to refine and improve the methods by which these two adjustments are calculated.

5.    We are working on the basis that when all work is completed, findings will be reflected in institutions' future Transparency Review reporting.

Yours sincerely

 

Howard Newby
Chief Executive

Download

Annex A
[ MS Word 102K | Zipped Word 13K | Adobe PDF 26K | Zipped PDF 18K ]

Annex B
[ MS Excel 24K | Zipped Excel 6K | Adobe PDF 12K | Zipped PDF 7K ]