| 20 September 2007 |  |
| To | Heads of HEFCE-funded higher education institutions |
| Direct Line | 0117 931 7300 |
| Direct Fax | 0117 931 7203 |
Circular letter number 24/2007
For further information contact Alex Thompson, 0117 931 7041, a.thompson@hefce.ac.uk
Dear Vice-Chancellor or Principal
Evaluation of the effectiveness and role of third stream funding
1. This letter is intended to brief you on an important evaluation of 'third stream' funding - that funding intended to support higher education institutions (HEIs) in responding to the needs of business and the wider community - which HEFCE is undertaking in conjunction with the Department for Innovation, Universities and Skills (DIUS). The purpose of the study is to inform long-term policy development and future spending priorities. This will be the first in-depth evaluation of the effectiveness of HEFCE/DIUS third stream funding and we have appointed Public and Corporate Economic Consultants (PACEC) to undertake the evaluation.
2. No action is required at this stage. We will write directly to some institutions in October 2007, and invite them to participate in the evaluation as case studies.
Background
3. HEFCE third stream of funding for higher education began in 1999 with the introduction of funds specifically to support HEIs to increase their capability to respond to the needs of business and the wider community, where this would lead to wealth creation. By 2008 we (in partnership with Office for Science and Innovation, now part of DIUS) will have invested approximately £600 million in this area, under various initiatives that have become consolidated in the Higher Education Innovation Fund.
4. In February 2007, we issued an invitation to tender for a study to evaluate what has been achieved to date by third stream funding in terms of its original aims - to achieve culture change and embed capacity toward optimising the direct and indirect economic impact of higher education. Further details about the scope of the evaluation is available.
The research
5. We will need the assistance of a number of HEIs in order to ensure that the evaluation forms a sound and complete picture of the third stream achievements of the whole higher education sector. The consultants, PACEC, will use cluster analysis methodology to identify around 30 HEIs to invite to take part in the study as representative case studies. Participation will involve a number of interviews with institution staff and senior managers, and a survey of businesses and other users with whom the HEI has engaged as part of its third stream activities. The researchers will also carry out a broader telephone survey of academic staff from across the sector. We are working with PACEC to minimise the call on HEI time from participation in the study.
6. I recognise that contributing to studies such as this evaluation places a burden on HEIs. However, I do hope you will be willing for your institution to assist with the work, if approached, as it is particularly important that the study is based on a fully representative sample of HEIs that reflect the diversity of the third stream and the higher education sector.
7. The study is also intended to provide significant benefit, both to the sector collectively and to individual HEIs participating. The case study institutions will benefit from an individual evaluation report on their third stream work, and the opportunity to attend a workshop in September 2008, facilitated by PACEC, to explore the findings of the evaluation in more detail. We have appointed a sector expert group to help oversee the work and it will also advise on ways we can get more value out of the exercise for the sector as a whole.
8. Overall, the sector, Government and HEFCE will also benefit from a solid evidence base for future funding and policy decisions in this area. I think it is also important to keep in mind the considerable successes that HEIs have already achieved in this area of activity. The latest higher education-business and community interaction survey (HEFCE 2007/17) shows increased performance of the higher education sector across the vast majority of third stream metrics, and this should be reflected in the final evaluation results.
Timetable and next steps
9. The proposed timetable for the work is:
| August - September 2007: | PACEC conducts initial desk research and cluster analysis to identify case study HEIs |
| October 2007: | HEFCE/PACEC contact heads of selected HEIs, setting out what will be involved in the case study research and inviting those HEIs to participate |
| November 2007 - April 2008: | PACEC undertakes case study and other research |
| Autumn 2008: | Final evaluation report delivered and disseminated. |
10. If you would like to know more about this study or to get in touch with the PACEC researchers, please contact Alex Thompson in the HEFCE Business and Community Policy Team (0117 931 7041, e-mail a.thompson@hefce.ac.uk).
11. We are sending a copy of this letter to the main contacts we have for the third stream in your HEI. We will also keep relevant professional communities updated about the study through communications with the various knowledge transfer expert bodies.
Yours sincerely
Rama Thirunamachandran
Director Research and Knowledge Transfer
Cc HEFCE Knowledge transfer/third stream contacts in HEIs