21 May 2007

To	Heads of HEFCE-funded higher education institutions

Direct Line	0117 931 7300
Direct Fax	0117 931 7203

Circular letter number 15/2007

For further information contact Christine Daniel, tel 0117 931 7373, e-mail c.daniel@hefce.ac.uk

Dear Vice-Chancellor or Principal

Advance notice of changes to HESES07

1. I am writing to provide advance notice of the main changes to the 2007-08 Higher Education Students Early Statistics survey (HESES07). The most significant change for most higher education institutions (HEIs) results from the review of the Higher Education Statistics Agency (HESA) student record, which means that, from 2007-08, all English HEIs are required to report students on non-standard years of programme of study using the split full-time equivalent (FTE) method (these terms are explained in Annex A). This has consequences for how such years are reported on HESES. We are highlighting these differences so that institutions can consider at this early stage whether they need to change their own systems for collecting the data. This letter is not intended to replace the HESES07 guidance which will be published as usual during the summer.

2. Institutions' ability to meet their funding agreement targets for 2007-08 may be affected by the changes to data reporting for 2007-08. This letter therefore sets out the implications for our monitoring of funding agreement targets for 2007-08. A copy is being sent to our HESES contacts at each institution.

3. The main changes to HESES07 are set out in Annex A to this letter and are as follows:

Reporting change for students on non-standard years of programme of study.
Treatment of students from overseas territories.
Treatment of students from Romania and Bulgaria.
Monitoring arrangements for additional student numbers (ASNs) awarded for Higher Level Skills Pathfinders and provision co-funded with employers.

Monitoring funding agreement targets for 2007-08

4. Annex A to this letter explains about the change to the reporting of non-standard years of programme of study from 2007-08. This change does not affect further education colleges, nor any higher education institutions (HEIs) that did not previously use the 100:0 method for reporting non-standard years. However, it will affect many HEIs and for them it means that some non-standard years that would have been countable on HESES07 (under the 100:0 method) will not count until HESES08, while some that were counted on HESES06 will be counted again on HESES07.

5. The effect of this is that some institutions will see a change in their total FTEs in HESES07 compared with the numbers that would have been countable under the previous arrangements. This may affect the size of adjustments to their HEFCE grant, particularly relating to the delivery of ASNs but also possibly relating to compliance with their contract range.

Monitoring ASN targets

6. We are aware that the change of reporting method may affect some institutions' ability to report real increases in student numbers, which in turn may affect the delivery of their ASN targets. To address this issue we will introduce a new table (Table 7) in HESES07 only. Institutions can use this to report their total FTE for all years of programme of study using the same methods as they adopted for HESES06 (in addition to reporting non standard years using the split FTE method on all the other tables). Completion of Table 7 will be optional and restricted to institutions that reported non-standard years using the 100:0 method on their 2005 06 HESA student return.

7. ASN targets will be monitored using data returned in Table 7 where it is completed. This will provide consistency across years when assessing the delivery of year-on-year growth. Although completion of Table 7 will be optional, we are introducing it so that institutions affected by the reporting change do not need to submit appeals against grant adjustments relating to the non-delivery of ASNs. Institutions whose ability to meet their ASN targets is affected by the reporting change will therefore need to complete Table 7, as we will not accept appeals that are based on the reporting change. Where institutions' ability to meet their ASN targets has been affected by the reporting change, we expect to adjust their ASN targets for 2008-09 onwards to ensure this situation does not recur in subsequent years. Table 7 will therefore not be collected after HESES07.

Monitoring the contract range

8. The new Table 7 is introduced primarily because we would otherwise have an inconsistency between how ASN FTE targets are set and how they are monitored. This does not apply to monitoring of the contract range. We do not therefore propose to use the new Table 7 automatically and routinely to assess whether or not institutions have met their contract range. Nevertheless we recognise that some institutions may wish to appeal against holdback of funds for failing to meet their contract range, where they consider this has arisen because of, or been inflated by, the changed requirements for reporting non-standard years. Such institutions should also complete Table 7, so that we can assess the extent to which the funding outcomes may have been affected by the new reporting arrangement. The factors that affect institutions' position within or outside the tolerance band are complex and will depend on more than just the differences in FTE count that we are collecting on Table 7. Nevertheless we will use Table 7 to estimate the extent to which contract range holdback may have been affected by the changed reporting arrangements, for those HEIs that submit appeals for mitigation on this basis. In considering appeals, we will treat each case on its merits. However, where the Table 7 data suggest contract range holdback would have been lower had non-standard years been reported in the same way as in previous years, then we will be prepared to reduce it accordingly.

9. Institutions should note that we will not accept any appeals relating to the changed 2007-08 reporting arrangements for non-standard years in 2008-09 or beyond. Any agreement to mitigate contract range holdback in 2007-08 is therefore for one year only, and institutions may need to take action if it is not to recur, and be implemented, in subsequent years.

Further information

10. If you have any questions regarding the above, please contact Christine Daniel, tel 0117 931 7373, e-mail heses@hefce.ac.uk.

Yours sincerely

Professor David Eastwood
Chief Executive

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