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HEFCE

Higher Education in Further Education Colleges: Funding the Relationship

Reference M 1/95

Published January 1995

The electronic version of this document contains the preface, list of contents and Executive Summary only. Copies of the complete printed document are available from the HEFCE price £5.00.

Note

A note on the section on Foundation Courses is given at the end of this version of the document.

Preface

This report describes the extent and nature of the interface between further and higher education. It concentrates on the provision of higher education in further education colleges and discusses many issues concerning the future funding of such provision.

There are no specific recommendations in this report whose purpose is to stimulate discussion on the future of the FE/HE interface, the role of FE colleges in providing higher education and the funding arrangements for HE work in FE colleges. The Council would welcome comments from FE colleges, HE institutions, other interested bodies and individuals on the issues raised in the report. Given the broad range of matters covered respondents will have different interests and priorities and the Council will be pleased to receive comments on the range of issues discussed. However, there are a number of issues - in relation to both the broad nature of higher education in the future and more short term operational matters - in which the Council has a particular interest and on which specific comment would be especially welcome. In particular:

a. Whether the Council should be even-handed between FE colleges and HE institutions in its funding of HE, or whether it should be primarily concerned to develop HE in HE institutions.

b. Whether the distinctive features of higher education provision in FE colleges might point to a clear future role for FE colleges. Their strengths in providing shorter sub-degree courses and in providing local access for upgrading skills and knowledge throughout working life may point to a valuable and distinct role in future policy.

c. Whether a small group of 'mixed economy' colleges with a relatively large and well established HE focus can be identified for special treatment by the Council.

d. Whether the Council should influence the nature of franchise arrangements by providing either prescriptive funding arrangements or guidance on the practical and management details of franchising, or simply by promoting good practice. Alternatively, whether the quality audit and assessment arrangements will be sufficient to inform equitable and quality collaborative arrangements.

e. Whether the Council's current distinction, for funding purposes, between franchising and association should be removed.

The Council will consider the responses in developing further its policies on the funding of HE provision in FE colleges. Further enquiries and responses to the report should be addressed to:

Mr Cliff Allan, Policy Division,
HEFCE, Northavon House, Coldharbour Lane, Bristol BS16 1QD
Tel 0117 931 7013

Responses should be sent by Friday 21 April 1995.

Contents

I EXECUTIVE SUMMARY
II BACKGROUND AND INTRODUCTION
III THE NATURE OF THE FE/HE INTERFACE
Introduction
FE Colleges as Providers of Routes to Higher Education
  • Access Courses
  • Foundation Courses
Higher Education in FECs
  • Validated and directly-funded FECs
    Nature and Extent
    Practice and Experience
    Mixed Economy Colleges
  • FE/HE Collaboration
    Franchising
    Associate College Arrangements
    Two-plus-two schemes
    Joint activity
    Practice and Experience
Motivation for HE in FECs
The Distinctive HE Experience in FECs
Quality
  • Quality Assurance
  • Quality Assessment
Summary
IV POLICY ISSUES
Introduction
A Policy Context
  • FE Colleges' Role in a Future HE system
  • A Funding Strategy
Funding HE in FECs: A differentiated approach
  • Directly-funded FE Colleges
  • Franchising and Association
  • Guidance on Collaboration
  • Status of Franchising and Association
  • Fees-only HE Providers
V CONCLUSIONS

Higher Education in Further Education Colleges: Funding the Relationship

I Executive Summary

Introduction

1. This discussion paper emerged out of the Council's wish to inform itself of the extent and characteristics of the interface between further and higher education. An internal study group was established, including representatives from the Department for Education, the Department of Employment, the Further Education Funding Council (FEFC) and the Higher Education Quality Council (HEQC) and the HEFCE's former Further Education Advisors, to map and describe the nature of this interface and highlight the key future policy questions facing the HEFCE, particularly in relation to the future funding of higher education provision in further education colleges (FECs). The paper describes both the broad range of relationships between FECs and higher education institutions (HEIs) and the nature of HE in FECs.

Routes to Higher Education

2. FECs have provided an important and increasing entry route to HE both for students with vocational and with non-vocational qualifications (including A-levels). A wide range of formal and collaborative arrangements between FECs and HEIs - including access consortia and Open College Networks - have developed to facilitate these entry routes, particularly Access courses. The growth of Access courses has been dramatic over the past decade resulting in administrative procedures and requirements which affect their funding and quality assurance.

3. Access courses are mostly delivered in FECs. Many Access courses are part-time covering a number of subject areas, with humanities and social sciences predominating. The emphasis on providing entry to HE for students without traditional qualifications is reflected by a high proportion of students on such courses being over 21 years of age.

4. Although the lack of comprehensive data clouds the real picture, it appears that of the relatively large numbers of registered Access course students, only a small proportion actually progress to HE. While Access courses in FECs undoubtedly play an important role as an alternative entry route to HE, further research is required into the progress of completing students to understand more about the true value of Access courses to students and HEIs.

5. Foundation courses (also called 'Year O'), given their HE status, are not strictly entry routes to HE, but these too have also grown in number, primarily as a preparatory year for students with non-traditional qualifications. Over half of all foundation year programmes are delivered in FECs, often alongside and sometimes overlapping with Access courses, through varying forms of collaborative arrangements with HEIs, particularly franchise agreements.

6. Over three quarters of all foundation year students are part-time. This would seem to refute the view that foundation courses are replacing Access courses because the HE status of foundation courses enables registered students to be eligible for mandatory awards - Access course students are ineligible for mandatory awards. Only full-time students are eligible for mandatory awards.

Higher Education in FE Colleges

7. Higher education provision in FE colleges is multi-dimensional, ranging from FECs as well established providers of all-through HE programmes, funded directly by the HEFCE, to FECs delivering Year 0 or Year one of HE programmes through franchise arrangements with HEIs.

8. While the nature of HE in FECs differs greatly a number of common features stand out. In particular higher education in FECs is:

a. Vocational - there is a tradition of closeness to the world of work. A significant proportion of all sub-degree vocational HE provision is delivered in FECs and most HE students in FECs are located in the Business and Management, Science, Maths and IT and Health related subject areas.

b. Local and access oriented - the location of FECs make them well placed to serve geographically dispersed and educationally marginalised populations. Their access role is also reflected by a significant proportion of local, part-time and mature students.

c. Based on progression - HE provision in FECs enables a degree of continuity for those students progressing into HE from an FE and non-traditional background. This has led some to highlight the distinctive HE experience in FECs, often characterised by teaching and learning strategies based on the strengths of FE provision, in an academic environment quite different to an HEI.

9. The Average Unit of Council Funding (AUCF) for HE provision directly funded in FECs by the HEFCE is significantly lower than that in HEIs. There are historical, and often self-imposed, reasons for this but further investigation is required to establish the extent to which HE in FECs is cheaper to provide, or if this is based on the distorting effect of changes in the funding arrangements for FECs.

10. The delivery of off-campus HE through franchising and associate college arrangements has become a significant feature of HE provision. There would appear to be a strong congruence in the motivations of most HEIs and FECs in collaborating. In particular, there is a strong desire to use such links to widen access to HE and secure student progression routes. While some may argue that the recent growth in off-campus HE reflects the need on the one hand for HEIs to maximise the throughput of students without incurring additional capital expenditure and on the other for FECs to increase their fee income, the evidence from most studies into collaborative arrangements tends to put the emphasis elsewhere, while recognising this as one consideration.

A future funding policy context

11. Many FECs have developed into significant providers of HE with particular characteristics in terms of what is delivered, how and to whom. Further consideration of their role in HE is required particularly if current trends in the evolution of HE are to develop further. On present trends the HE system may increasingly be characterised by:

  • a vocational emphasis
  • flexibility and student choice
  • lifelong learning
  • a regional and local emphasis.

12. It would seem that the distinctive features of HE in FECs would make colleges well placed to respond to such a future HE system. The strategic question is not only what role should FECs have in HE but also the extent to which the HEFCE should be encouraging FECs to develop their HE role at a time when resources are scarce and the financial pressures considerable.

13. While the responsibilities for financial and administrative accountability are clear for both the FE and HE sectors the educational boundaries are increasingly opaque. An issue for the HEFCE is whether its primary responsibility is for funding higher education wherever it can be provided most effectively and efficiently - in which case it might be better disposed towards providing increased funding for HE provision in FECs - or whether its primary concern should be to nurture higher education sector institutions.

14. The implications of encouraging further the role of FECs in providing higher level work during a period of consolidation, especially for the administrative and funding arrangements for both FEFC and HEFCE, could be considerable. However, not to recognise the existing and potential role of FECs in providing HE, and a distinctive type of HE in response to particular needs, may have negative consequences for individual FECs in the short term and for the development of HE provision in the long term.

Future approaches

Emphasising Vocational Provision

15. Any further development of HE provision in FECs should be based on existing strengths. The emphasis on providing sub-degree and vocational HE work often in response to local and regional employer, industry and student needs stands out. There is already a considerable proportion of sub-degree vocational HE work delivered in FECs, whether funded directly or through collaborative arrangements, and extending this further may be an appropriate funding strategy. However, the means of doing so and the possible implications for HEIs with large sub-degree provision and whose missions are explicitly vocationally oriented, would need to be fully considered. Directly-funded FECs

16. The HEFCE currently directly funds over 70 FECs for HE provision. Many claim that the converging pressures of a new funding regime for FE, which is encouraging growth in FE but no longer recognises the additional costs of providing for HE, and consolidation in HE, could have negative consequences for their HE provision. However, there is a contradiction between FECs seeking additional HE funds to reduce the impact of the current FE/HE funding policy squeeze and recognition of the real costs of HE provision on the one hand, and on the other hand FECs wishing to expand their HE provision on the basis that they make such provision more cheaply. This underpins the importance of clarifying the real costs of providing HE in FECs, as noted above.

17. FECs directly-funded by the HEFCE are not a homogeneous group in terms of nature of provision and student volume. Such colleges range from those which are close to HEIs in style of operation, general educational philosophy, size and subject range of HE activity to those which have very small and specific HE programmes.

18. Many FECs, particularly those with large HE programmes, feel that the current funding arrangements which exclude them from HEFCE capital funds (including equipment and Library capital projects), proposals related funding (for example the Teaching and Learning Technology Programme (TLTP) and Special Initiatives) and the Research Assessment Exercise (RAE) results in inadequate resourcing of their HE provision. The HEFCE could be justified in not changing this during a period of restricted resources when there are considerable pressures on these resources from HEIs. The impact of including over 70 FECs in all elements of its funding would be considerable.

19. However, there may be some scope to recognise both the distinctive nature of HE in FECs, and the particular problems of large HE providers which are disproportionally affected by the FE/HE funding policy squeeze, without substantially impacting on the funds available to HEIs. This would mean differentiating between directly-funded FECs so that those which can be broadly defined as "mixed economy" colleges could compete for funds in special funding programmes where there is a particular interest. However it is unlikely that changing the eligibility requirements for the RAE would lead to any allocations of research funds to FECs in the light of the policy to increase the selectivity of research funding and little purpose would be served by this.

20. There are also many FECs delivering HE provision funded on a fees-only basis. While resources are limited and the demands of HEIs and directly-funded FECs are considerable it is difficult to see how there could be any short-term change in the funding strategy affecting this group of FECs. Nonetheless, the fact that they are currently not in receipt of HEFCE recurrent funds should not rule out their potential in any consideration of the future role of FECs in the HE system. Franchising and Association

21. The nature and extent of collaborative arrangements are clearly institutional matters and it is the sole decision of an HEI as to where and how it delivers its HE provision. However, the impact of consolidation is forcing many HEIs and FECs to reappraise the purpose and nature of collaboration - in most cases leading to a strengthening of links rather than an increase in volume. Variable practice and experience of franchising and association, particularly among FECs, has led some to question both the quality of off-campus provision and the nature of some arrangements. The HEFCE could influence institutional behaviour, if it wished, by: setting prescriptive criteria for the funding of off-campus provision; providing guidance on the development, implementation and quality assurance of franchising; or simply describing good and bad practice for institutions to take note of. It is unlikely that the Council would wish to be interventionist in its approach in this area although there may be benefit in highlighting good practice. While it is likely that the procedures for quality audit and assessment in both the FE and HE sectors will enable the nature and experience of collaborative arrangements to be monitored more closely than at present, given the need to ensure financial accountability the Council may wish to seek greater clarity in collaborative arrangements.

22. The distinction between franchising and association, at least for funding purposes, is no longer necessary. There may continue to be different institutional perspectives on these arrangements but in terms of funding policy they ought now to be treated in the same way. There would be no specific funding implications in doing so. Quality

23. From the limited information available there is no evidence that the quality of experience of HE students in FECs is any better or worse than their counterparts in HEIs. As noted above the experience is likely to be different and appropriate to particular groups of students. However, the HEQC's Learning from Audit programme will go some way to ensure that appropriate quality assurance systems are enhanced, particularly those concerning collaborative arrangements.

24. Directly-funded HE provision in FECs is included in the HEFCE's quality assessment arrangements, as is franchised work - although not all franchised work is currently included in an assessment visit - while HE in FECs not funded by the HEFCE is not covered by these arrangements. As HE work in FECs not funded directly by the HEFCE increases consideration of the need for comparable judgements on the quality of teaching and learning may be required.

Note on Foundation Courses

1. This note clarifies the definition of foundation courses and provides some new data. It revises the incorrect information on foundation courses given in HEFCE Report M 1/95, 'Higher Education in Further Education Colleges: Funding the Relationship'.

Definitions

2. The term 'foundation course' is applied to a range of quite different HE and FE provision. In this note, it is used in the restricted sense defined by the Higher Education Quality Council (HEQC):

'a course, offered by an institution of higher education, which is designed to prepare students for entry specifically to the first year of an associated named degree or diploma (eg HND) programme offered by that institutions, and successful completion of which guarantees progression to that degree or diploma programme'

3. The prospectus description of such courses is usually something like 'four year BSc course with foundation year', making it clear that the foundation year is an integral part of the course. If a student on such a course attends full-time, and satisfies the domicile and other conditions, then he or she will be eligible for a mandatory award at the appropriate fee level under the conditions set out in DfE Circular 9/92.

4. Foundation years are sometimes referred to as 'year 0' provision. They fall into two broad categories:

  1. 'Conversion' foundation courses are for students with traditional entry qualifications (A-levels) in subjects that are not relevant to their chosen subject of study in higher education.
  2. 'Preparatory' foundation courses provide a route to higher education for those who do not have traditional entry qualifications; they are particularly aimed at mature students.

5. Originally, foundation courses provided introductions to engineering and technology, but they have since been developed for other disciplines.

6. The definition adopted here does not include foundation courses in Art and Design, which are at further education level, nor courses leading to professional qualifications and other specialist certificates, which are also sometimes described as 'foundation'.

Data Sources

7. All the figures presented here should be treated with caution. They give only a broad indication of the scope and nature of such courses.

8. The HESA student record is being redeveloped: from 1998-99 it should be possible to use this record to identify students on foundation courses. Also, from 1998, UCAS will have information on the numbers of applicants to foundation courses.

HEQC

9. The HEQC carried out a survey of English HEIs on the numbers of students on foundation year courses, using the definition set out in paragraph 2. This survey had to be carried out quickly, in response to a particular policy question. Given this, and some uncertainty over definitions, the figures should be taken as approximate.

Table I: Numbers of Foundation Students in English HEIs (HEQC Survey)

1993-94
 1994-95
 1995-96 (a)
Total returned in survey (b) 8361 100% 7723 100% 7534 100%
Engineering 4861 58% 4432 57% 4376 58%

Notes

(a) Projected numbers.
(b) Survey covered 132 institutions in England that are subscribers to HEQC; 128 (91%) responded.

FESR

10. Foundation courses recorded on the Further Education Student Record (FESR) cannot be identified. The data in the HEFCE report 'Funding the Relationship', M 1/95, are based on a misunderstanding of the coding in this record, and should not be used.

11. There is a qualification aim of 'Foundation' (code 218). The numbers of records with this code are small (621 in 1992-93, 2781 in 1993-94), and evidence from the HESA record suggests that 'foundation' is being interpreted in a different way.

USR

12. Students on foundation courses should have been returned to the Universities' Statistical Record (USR) using the convention that the year of programme is equal to 0. However, the number of records with this characteristic seems low when compared with both the HEQC survey and the HESA data, which suggests that the year 0 convention was not always followed.

Table II Numbers and Characteristics of Foundation Course Students
(USR, English Institutions)

1992-93
 1993-94
Total 737 100% 751 100%
Engineering 299 41% 340 45%

HESA

13. The HESA student record in 1995-96 has a qualification aim of 'foundation course at HE level'. Some records coded with this qualification aim are undoubtedly foundation courses as understood here. However, many are not, for example those with course titles such as:

  • Certificate in Community Development - Personal Skills
  • Foundation Certificate in Management Development
  • MA Gestalt Psychology - Preparatory Year.

14. There is another way to identify foundation course students using the HESA record. Records were selected with a qualification aim of first degree or HND, and with the word 'foundation' in the course title. Institutions are not required to adopt any particular wording in the course title, so it is not expected that this selection will be complete, or 100 per cent accurate, or necessarily representative. However, most of the full course titles are consistent with the definition of foundation course used here. The number of records for 1994-95 and 1995-96 is about a quarter of the totals found in the HEQC surveys for 1993-94 and 1994-95.

Table III: Characteristics of Records Identified as First Degree or HND Foundation Year Students from the 1995-96 HESA Record

1994-95 (a)
 1995-96 (b)
Total (c) 1914 100% 2076 100%
Engineering 829 43% 991 48%

Notes

(a) HESA student record version SXD9424.
(b) HESA student record version SXD9503.
(c) Non-dormant students, with qualification aim = degree or HND, at English HEI and with 'foundation' in course title.