HEFCE Circular 13/96
Method of Calculation of Holdback of HEFCE Grant 1996-97
To Heads of HEFCE-funded Institutions
Heads of DENI-funded Universities
Heads of FEFC-funded Institutions in receipt of CE funds
Of interest to those responsible for Finance, Planning, Student Data
Reference 13/96
Publication Date September 1996
Response by No response required
Enquiries to Regional Officers
Executive Summary
1. This circular explains how the Council will determine whether an institution should have grant withheld for under-recruitment against its Contract Student Numbers (CSNs) or over-recruitment against its Maximum Aggregate Student Number (MASN) in the 1996-97 academic year.
2. The methods are similar to those used in 1995-96. However, some details have changed:
- a. The MASN margins and transitional funding limits have been revised.
- b. All part-time and postgraduate courses classified as pre-clinical and clinical subjects are now in the science virement groups.
- c. The Council is no longer separately monitoring the Core Proposal Initiatives or Diploma in Social Work places sponsored by the Home Office.
Background
3. Each institution funded by the Council has a funding contract in the form of a Financial Memorandum Part 2 or a Funding Agreement. This contains details of the CSNs and the MASN and defines the terms under which grant will be withheld.
Monitoring Recruitment against CSNs and the MASN
4. Student registrations that will be counted against the CSNs and the MASN are defined in the funding contract and the forthcoming Circular 'Higher Education Students Early Statistics Survey 1996-97 (HESES 96)'.
5. For the academic year 1996-97, achievement of the CSNs and compliance with the MASN will be monitored using data from HESES 96. These data will later be compared with the actual data for 1996-97 provided by the Higher Education Statistics Agency (HESA) for both higher and further education institutions. The Council may adjust its allocations retrospectively in the light of these comparisons.
7. In calculating the MASN, it has been assumed that the proportion of award holders among forecast fundable registrations is the same as that given by the fees information for actual registrations. Institutions should recruit on the basis that the Council will apply these assumptions when monitoring compliance with the MASN. Calculation of Holdback against CSNs
8. The method of calculating holdback against CSNs is set out in Annex A. The only change to the virement groups used in 1995-96 is that all part-time and postgraduate courses classified as pre-clinical and clinical subjects are now included in the science virement groups.
8. No grant will be withheld if shortfalls in registrations against the CSNs lead to a calculated reduction in funding of less than £50,000 or 10 per cent of total funding for teaching, whichever is the less.
9. Institutions subject to holdback that have at least 90 per cent of their provision in one funding cell may make a special case for mitigation.
Calculation of the Reduction in Grant for Institutions which Exceed their MASN
10. There will be no reduction in grant for institutions which recruit award holders above their MASNs within these limits:
- a. 5 students - for institutions allocated a MASN of up to 250.
- b. 10 students - for institutions allocated a MASN between 251 and 500.
- c. 2 per cent - for institutions allocated a MASN of 501 and above.
11. Any recruitment beyond these limits will result in a reduction of grant for 1996-97. This will be based on the amount of tuition fee income attributed to the excess award holders. The rate per student will be calculated as the average fee income per award holder. This will depend on the mix of fee bands, and the proportion of students assumed to attract half the fee (that is, sandwich year out and part-time students, and students predicted to withdraw during the academic year).
12. The reduction in grant will be applied by the Council or the Teacher Training Agency (TTA), or split between them to reflect the extent to which the over-recruitment is attributable to initial teacher training (ITT).
13. In addition the Council may reduce the 1997-98 baseline funding for institutions which over-recruit against the MASN in 1996-97.
14. Institutions that under-recruit against the MASN will not have their grant reduced in 1996-97 (unless they have holdback due to a shortfall against CSNs as described above). However, under-recruitment against the MASN may be taken into account when determining future MASN allocations.
Verification
15. Where calculations suggest that grant should be withheld, institutions will be notified of the amount and will have the opportunity to verify the data used by the Council.
Effect on Grant
16. Adjustments to the 1996-97 grant will be made in four instalments between April and July 1997.
17. Transitional funding arrangements will only be applied to the 1996-97 grant. Holdback resulting from under-recruitment against CSNs will be mitigated to ensure that the adjusted 1996-97 teaching, research and formula capital grant represents at least 95.5 per cent of the comparable funds for 1995-96. There will be no mitigation of reductions in grant that result from institutions exceeding their MASN.
18. The 1997-98 baseline funds will be reduced by the total amount of holdback resulting from any shortfall against 1996-97 CSNs.
19. As in previous years, holdback will be distributed pro rata to the funds shown on the redistribution survey.
Further Information
20. Enquiries should be addressed to Regional Officers.
Annex A
Details of Method of Calculation of Holdback Against Contract Student Numbers Background
1. In all calculations of holdback, full-time refers to full-time and sandwich registrations, including those on sandwich year-out. A headcount of registrations rather than a measure of student load will be used to monitor student enrolments against the CSNs. 2. The data used will be the Home and EC Fundable Assumed Registrations (column 4) returned by institutions in HESES 96.
3. CSNs will be monitored against the number of registrations aggregated to the following nine virement groups:
- V Quota-controlled pre-clinical and clinical subjects
- W1 Taught part-time science
- W2 Research part-time science
- X1 Taught part-time non-science
- X2 Research part-time non-science
- Y1 Taught full-time science
- Y2 Research full-time science
- Z1 Taught full-time non-science
- Z2 Research full-time non-science
4. A mapping of Academic Subject Categories (ASCs) to these virement groups is set out in Annex B. The one change to this for 1996-97 is that all part-time and postgraduate courses classified as pre-clinical and clinical subjects are now in the science virement groups. Calculation of Holdback
5. A weighted average unit of Council funding (AUCF) will be calculated for each virement group by dividing the total funds in the virement group by the total CSNs in that group.
6. CSNs will then be subtracted from the registrations for each virement group. The result will be multiplied by the weighted AUCF to give the funds available for virement.
7. If the funds are positive, arising from a surplus against the CSN in that virement group, then no holdback is due. The surplus can be used to offset deficits in other groups, subject to the virement rules in paragraph 10.
8. If the funds are negative, arising from a shortfall against the CSNs in that virement group, then some holdback may apply after virement.
9. The virement rules will apply to the taught and research categories separately. There will be no virement between the taught and research categories, except for institutions in which more than 90 per cent of registrations are at postgraduate level.
10. The virement rules are as follows:
- a. No virement is possible in or out of the quota-controlled pre-clinical and clinical group (V).
- b. A surplus in part-time science (W) may be used to offset a deficit in any group (X, Y or Z) except quota-controlled pre-clinical and clinical.
- c. A surplus in part-time non-science (X) may only be used to offset a deficit in full-time non-science (Z).
- d. A surplus in full-time science (Y) may only be used to offset a deficit in full-time non-science (Z).
- e. A surplus in full-time non-science (Z) may not be used to offset a deficit in any other group. 11. The amount of holdback applied will be any remaining deficit after virement.
Annex B
Mapping of Academic Subject Categories to Virement Groups
| Virement Group | Levels | Modes | Academic Subject Categories |
| Quota-controlled pre-clinical and clinical subjects (V) | UG | FTS/SWOUT | 1.1 Pre-clinical Medicine 1.2 Clinical Medicine 1.3 Pre-clinical Dentistry 1.4 Clinical Dentistry |
| Taught part-time science (W1) | UG/PGT | PT | 1 Pre-clinical and Clinical Subjects (including Veterinary Science) 3 Science 4 Engineering and Technology 6 Mathematical Sciences, IT and Computing |
| Research part-time Science (W2) | PGR1 | PT | 1 Pre-clinical and Clinical Subjects (including Veterinary Science) 3 Science 4 Engineering and Technology 6 Mathematical Sciences, IT and Computing |
| Taught part-time non-science (X1) | UG/PGT | PT | 2 Subjects & Professions Allied to Medicine 5 Built Environment 7 Business & Management 8 Social Sciences 9 Humanities 10 Art, Design and Performing Arts 11.2.2 Education: Non-ITT (Excluding INSET for School Teachers) |
| Research part-time non-science (X2) | PGR | PT | As for Taught part-time non-science (X1) |
| Taught full-time science (Y1) | UG/PGT | FTS/SWOUT | As for Taught part-time science (W1) but excluding full-time undergraduate quota-controlled pre-clinical and clinical subjects (V) |
| Research full-time science(Y2) | PGR | FTS/SWOUT | As for Research part-time science (W2) |
| Taught full-time non-science (Z1) | UG/PGT | FTS/SWOUT | As for Taught part-time non-science (X1) |
| Research full-time non-science (Z2) | PGR | FTS/SWOUT | As for Taught part-time non-science (X1) |