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30 March 2007 HEFCE logo
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Circular letter number 13/2007

For further information contact Sarah Howls, tel 0117 9317073, e-mail s.howls@hefce.ac.uk

Dear Vice-Chancellor or Principal

Additional funding for very high cost and vulnerable laboratory-based subjects

1.   In January 2007 the HEFCE Board agreed to allocate £75 million in time-limited core funding to secure the provision of very high cost laboratory-based subjects. These subjects have been identified as chemistry, physics, chemical engineering and mineral, metallurgy and materials engineering.

2.   These subjects are particularly expensive to provide, strategically important to the economy and society but vulnerable due to low student demand. The funding will help maintain capacity in these subjects in universities and colleges while demand from students grows. Thus this intervention complements our recently announced initiatives to nurture interest and demand in these subjects and grow demand.

3.   On 26 February 2007, we issued the annual recurrent grant letter which announced the initial distribution of funding among institutions and the allocations were summarised for all institutions in HEFCE 2007/06, 'Recurrent grants for 2007-08'. The annex to this letter shows the breakdown of the institutional allocations between the four subject areas concerned.

Method of allocation

4.   We will allocate this funding as time-limited core funding outside the normal teaching funding model. This has the advantage for those institutions that receive the funding that it is a special allocation and therefore is unaffected by their position in the tolerance band.

5.   In distributing this funding we have adopted the following principles:

  1. Funding will be targeted at those institutions which clearly offer significant and focussed taught activity in the high cost subject areas concerned.
  2. Funding will not be allocated on the basis of research activity, including postgraduate research student numbers.
  3. Allocations will be made on a formula basis informed by existing data sources, rather than through a bidding exercise.
  4. Allocations for all three years will be calculated at once on the basis of 2005-06 data, and not subject to annual recalculation. However, allocations will be reviewed to reflect institutions' compliance with any associated terms and conditions attached to the funding.

6.   These principles are intended to ensure that funding is also targeted at those institutions where students are aiming for taught qualifications in the relevant subjects and are being taught in associated 'departments'. They also aim to ensure that allocations are fair and that the accountability burden is kept to a minimum.

7.   We have relied on the Higher Education Statistics Agency (HESA) student record data for 2005-06 to inform the initial allocation of this funding. We have used a combination of the Joint Academic Coding System (JACS) code associated with a student's qualification aim and the academic cost centre in which the student activity is reported. We have limited the full-time equivalent (FTE) student numbers that are initially counted for funding purposes to those students that are reported in the relevant subject cost centres and who also have a relevant JACS code for the subject of their qualification aim.

8.   As a result no activity outside the four cost centres will count, and only activity undertaken by students who have a relevant JACS code within the four cost centres will be included. Further details of the allocation method are provided in the annex to this letter.

9.   We believe that this approach is the best means for identifying activity that is clearly focussed on the four subject areas, from the data available. Nevertheless, we acknowledge that there may be cases where this method might not capture eligible provision. For example, it would exclude students aiming for a qualification in chemical engineering who might be reported in the general engineering cost centre. For this reason, we have initially allocated only £23 million of the £25 million available for 2007-08; the remaining funding has been set aside for allocation by July 2007 to allow for cases where institutions can demonstrate that they have very high cost activity in the subject areas concerned which we have not already counted.

10.   We have set a threshold criterion for the additional funding. Institutions with fewer than 30 FTEs in a cost centre will not receive a share of the funding for that cost centre.

11.   We have not included further education colleges (FECs) in our initial allocations of this funding, but they are eligible in principle if they can demonstrate they meet the threshold criterion. Because of differences between the HESA student record and the individualised learner record (ILR) which colleges submit to the Learning and Skills Council, we cannot take the same formulaic approach across the two sectors. FECs do not have academic cost centres and use learndirect, rather than JACS, subject codes. Notwithstanding this, we have so far identified little higher education activity at FECs in these four specific subject areas.

Condition of grant

12.   This additional funding is allocated as part of institutions' block grant and we do not wish to be prescriptive about how institutions spend it. Nevertheless, the funding is conditional on institutions continuing to maintain taught programmes in the very high cost disciplines that this funding aims to sustain. Institutions that cease providing or substantially reduce their provision in any of these subjects within four years of the start of this special initiative (August 2007) will lose their allocation of this funding for that subject and be required to repay all funding received during the life of the initiative.

13.   Institutions that receive this funding will have to submit a short qualitative monitoring report as part of their annual monitoring statement. This will complement the monitoring that we undertake of activity in these subjects through the HESA student record. The monitoring statement should include details of the programmes offered in the four subject areas during the year and the new entrants and total home and EC student numbers for each.

Finalising allocations

14.   The method we have adopted for distributing this funding is the most robust method we have, given the data at our disposal. We fully accept that it might not capture all provision in these subject areas.

15.   Institutions that believe they fulfil the criteria for this funding in any of the four subject areas but which have not been included in the initial allocations should provide details to the Council by Monday 14 May 2007. Submissions should include:

  1. Details of the provision concerned, including programme titles, content and resourcing in terms of staff, capital, and financing. This might include any relevant current course or marketing material for the programmes.
  2. FTE student numbers involved, separately by mode and level.
  3. Details of how we can unambiguously identify the activity of these students on the 2005-06 HESA or ILR student record.
  4. Confirmation that the provision is HEFCE-fundable (see Annex G of both HEFCE 2006/36 and HEFCE 2006/37).
  5. The relationship between the activity for which the institution is seeking funding, and the four subject areas that we are supporting. This may include structural arrangements at the institution, such as staffing within academic departments.

16.   All submissions will be considered by the Council and our decisions reviewed by a senior independent adviser from within the sector. Decisions on submissions will be announced by the end of July 2007, when we re-issue the recurrent grant tables as part of institutions' funding agreements.

17.   We are supporting these four subject areas because our evidence demonstrates they are both very high cost (even when compared to other laboratory-based science and engineering disciplines) and vulnerable. In making decisions on institutions' submissions, we aim to ensure that the funding remains clearly targeted on the four subject areas concerned, and is not extended to other areas. Institutions are also reminded that they will not receive a share of the additional funding for each subject if they do not have at least 30 HEFCE-fundable FTE students in that subject. Institutions should not make submissions if they are unable to demonstrate from the 2005-06 HESA or ILR student record that they meet this criterion.

18.   Please mark all submissions for the attention of Sarah Howls and send them to the following address:

HEFCE
Northavon House
Coldharbour Lane
Bristol
BS16 1QD

Or by e-mail to s.howls@hefce.ac.uk

Yours sincerely

Professor David Eastwood
Chief Executive

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Annex

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