Consultation 98/13

Institutions' corporate plans

Executive Summary

Purpose

1. We are reviewing the information we ask institutions to submit in their strategic plans. This paper invites comments on proposals to change the format and content of plans, and the timing of submissions.

Key points

2. We want to reduce the amount of information we request from institutions. However, strategic plans provide us with valuable information on individual institutions and trends in the sector as a whole. We therefore propose to retain the present arrangements but in a reduced and more targeted form. We have used the term 'corporate plans' to reflect the change in approach.

3. We propose to introduce a three-year collection cycle for corporate plans which would include a financial strategy. The focus for monitoring and review would be the strategic messages in these documents. In the course of the three-year cycle, we would ask for some additional policy or business strategies to inform policy development and funding initiatives. Each summer we would collect staff and student number forecasts, the financial forecast, and an annual operating plan.

Action required

4. Please send any comments on these proposals to the HEFCE by Friday 24 April 1998.

Background

5. In the spring of every year we have asked institutions to submit strategic plans, financial forecasts and estates data. These have been collected together. We have used the information for various purposes, particularly monitoring institutions' financial health, and informing our advice to the DfEE on the needs of the sector.

6. Strategic plans provide data about the mission, strategic aims and objectives, and performance of institutions for which we have lead accountability. From time to time we also need information on different aspects of HE practice to inform policy-making and funding initiatives. This would include, for instance, knowledge about local and regional developments in HE, and potential partnership opportunities.

Proposals

7. The main thrust of these proposals is to enable our monitoring and review processes to reflect the different levels of institutional activity more closely to the benefit of both the Council and institutions. To achieve this, we propose to collect information about institutions' plans under the following headings:

• corporate plans, with the underpinning financial strategy - set at the strategic level and spanning the long term (5 to 10 years)
• policy/business strategies - more detailed, often covering a particular aspect of institutional activity over the short to medium term (3 to 5 years)
• the annual operating statement - concentrating upon immediate past performance and the forecasts and targets for the next year.
  

Corporate plans

8. We propose asking institutions to submit corporate plans on a three-year cycle. The plan should be a high-level document which sets out the key strategic aims and objectives, and integrates the main areas of institutional activity. A financial strategy, underpinning the corporate plan, would form part of the document. Therefore, it should include:

• the institutional mission/vision
• major external and internal factors likely to impact upon the institution and how the strategy responds to these
• the current strategic position of the institution
• long-term aims
• principal objectives
• financial strategy
• main proposals for implementation and associated measurable targets.
  

9. We would not prescribe the content of the strategies, but would expect institutions to produce their own documents within this framework. The plans would play an important role in informing the dialogue between individual institutions and the Council. They would highlight examples of good practice, and inform us about the strategic health of an institution.

Policy or business strategies

10. We would expect institutions to have detailed plans for specific areas of activity, which both help deliver their corporate plan and flow directly from and into it. These detailed strategies will cover a particular area of institutional activity, which may be academic or non academic, over the short to medium term (3 to 5 years).

11. In the past institutions have provided copies of their strategies on information systems/information technology, and on estates (see paragraph 15 below). These have been very useful in informing policy development.

12. There are other areas of activity on which we will request strategies to inform funding and policy development decisions at national and regional level (see paragraph 22).

Financial health monitoring

13. We are reviewing our policy on monitoring institutions' financial health. More emphasis will be placed on the need for institutions to incorporate a strong financial strategy into their corporate plan. Financial forecast information would still be collected annually, but in less detail. Through monitoring the financial strategy, institutions and the Council would be better placed to identify, and therefore prevent, potential causes of financial health problems.

14. We are likely to collect detailed financial forecasts separately in the future. It will be important for institutions to be able to demonstrate how their corporate plan and financial strategy integrate with their financial forecasts and other policy or business strategies.

Estates strategies

15. In March 1995, institutions submitted estates strategies, most covering a five-year period. The recent bids for funds poor estates indicated that a number of institutions were updating their strategies. We believe that institutions should maintain up-to-date estates strategies, but do not wish to prescribe the content or structure of those strategies. We therefore propose to:

1. Develop a good practice framework for estate strategies, describing the major elements and processes.
2. Agree with each institution its individual estates planning cycle, including the duration of the strategy and expected review date.
3. Require any updated strategy to be sent to us.
4. Carry out visits which will consider the processes that support the development of an estate strategy at each institution.
   

16. The main features of an institution's estates strategy should, of course, be reflected in both the corporate plan and the financial strategy.

Annual estates returns

17. We are currently sponsoring a study of comparative estates statistics, due to be completed in autumn 1998. This will produce a firm foundation for collecting robust comparative data across the sector. We will not collect further information about estates until this project has been completed.

Annual operating statements

18. The annual operating statement should provide a direct link between the financial forecast, student and staff number projections, estates returns, policy/business strategies, and the corporate plan and financial strategy. Significant variance in the previous year's actual performance against main objectives and targets should be explained, setting out the action both taken and planned.

19. Planning is not a static process, and strategy should develop in a continuous way in response to internal and external factors. We recognise that changes to aims and objectives may be legitimate and necessary. For monitoring purposes, institutions and the Council must be able to identify key shifts which have occurred, or which need to occur, and to understand why. It is also necessary to assess what the longer-term impact of changes may be, and whether further responses are required. The annual operating statement would, therefore, play an important role in the dialogue between institutions and the Council.

The future collection of strategies

Corporate plans and financial strategies

20. Corporate plans should not vary in the short term, so we propose to collect them on a three-yearly cycle. This would strike a balance between our need for up-to-date plans and our desire not to make unnecessary demands on institutions.

21. We welcome views on the best way to introduce a three-year collection cycle. For instance, we could:

1. Ask all institutions to submit their corporate plans in one year; or
   
2. Agree an individual timetable for submissions with each institution to reflect their own planning cycles, while ensuring that we receive a new one every three years.
   

Policy or business strategies

22. We propose to ask for strategies on specific policies when they are needed. We would give as much prior warning as possible, and limit the number of requests in any one year. Over the next twenty four months we may request the following strategies from institutions:

• learning and teaching
• access and widening participation
• interaction with businesses and the community
• research.
  

We will consult further on the nature and purpose of these strategies.

Annual operating statements

23. We still need to collect certain information each year, including numerical data. We therefore propose reintroducing the requirement that all institutions should submit an annual operating statement. We propose to request these in April or May of each year for submission in July. We would be interested to learn whether institutions would prefer a different timetable.

Timetable

24. The future timetable may vary in the light of responses to this consultation. However, it will be necessary to collect certain information this summer: a request for institutions to send us their 1998 return will be sent out in May, for a response by July 1998.

25. Subject to the outcome of the consultation, in the summer of 1998 we are likely to ask institutions to submit the following:

• annual operating statement
• forecasts of student numbers in a format consistent with the revised HESES Survey
• forecasts of staff numbers
• financial forecasts
• a copy of the current strategic plan if this has been updated since the summer of 1997.
  

26. The programme for annual estates returns will be decided once the study of comparative estates statistics has been completed in the autumn of 1998.

27. We would expect to collect corporate plans (including financial strategies) in the format proposed from all institutions in the summer of 1999.

Summary of responses sought

28. We invite comments and discussion on the proposed changes to our request for strategic plans and the timing of submissions. We are particularly interested in responses to the following proposals:

1. That institutions should develop corporate plans which set out the institution's key strategic objectives, and integrate the main areas of operation. A corporate plan would include:
   • the mission/vision
   • the major external and internal factors likely to impact upon the institution and how the proposed strategy responds to these
   • the current strategic position of the institution
   • long term aims
   • principal objectives
   • financial strategy underpinning the corporate plan
   • main proposals for implementation and associated measurable targets.
     
2. That we should collect policy or business strategies on specific issues when they are needed.
   
3. That institutions should submit updated estates strategies, at a time to be arranged and as part of a developing dialogue on strategic estates issues. Also, that we should develop a good practice framework for estates strategies.
   
4. To reintroduce the requirement for an annual operating statement so that we can assess performance against stated aims and objectives.
   
5. That corporate plans, incorporating financial strategies, should be collected on a three-year cycle.
   
6. To collect a planning return in July of each year, consisting of the annual operating statement, with student and staff number forecasts and financial forecasts.
   

Good practice guidelines on planning at the corporate level

29. We would also like to explore whether guidelines on good practice would be useful for institutions. Any comments on this proposal or offers of help with it would be welcome.

Responses

30. Please send responses to this consultation by 24 April 1998 to:

Sarah FitzSimons
HEFCE
Northavon House
Coldharbour Lane
Bristol BS16 1QD