Consultation 98/39

Widening participation in higher education: funding proposals

Outcomes of consultation (April 1999)

Executive summary

Purpose

1. We plan to introduce new funding arrangements in 1999-2000 to encourage institutions to widen participation in higher education. This paper invites comments on our broad strategy for widening participation and our related funding proposals.

Key points

2. We propose a strategy which encourages institutions to increase the participation of under-represented groups and to ensure that such students succeed. We will also encourage collaboration between higher education institutions (HEIs) and other education sectors, to tackle the problems of poor progression rates.

3. We recognise diversity in institutional approach to widening participation, and acknowledge that many HE institutions have strong track records in this area. We expect new funding to lead to an overall improvement in the representation and retention of specific groups in HE; and this will be achieved by recognising the costs of existing activity and by new initiatives. We would expect institutions to set improvement targets, and to monitor performance against them.

4. We propose a combination of funding approaches, through the mainstream teaching funding method, the allocation of additional student numbers, and special funding initiatives. The balance would lie more towards mainstream funding, through additional funds for disabled students and students from poor backgrounds, and the allocation of additional student numbers to widen participation.

5. We propose to encourage institutions to develop coherent strategies for the recruitment and progression of students, particularly those from under-represented groups, by relating our funding to such strategies.

6. We would like to spend up to £30 million to support both mainstream and special funding proposals in 1999-2000 but this will depend in part on the details of the additional resources which the Government has provided following the Comprehensive Spending Review. Final funding decisions will be made in December, following this consultation and the more detailed announcement of Government expenditure plans for HE in 1999-2000 and beyond, to be made in the autumn.

Action required

Issues for consultation are highlighted throughout the text and summarised in paragraph 53. Please send any comments on these proposals to Nicola Dowds by Monday 2 November 1998.

Background

8. Since its establishment the HEFCE has been committed to widening participation in higher education. More recently, in the light of the emphasis given to widening participation in the Dearing report, and its central importance to the Government's lifelong learning policy, this has become a major priority for the HE agenda.

9. We have established an advisory committee on Equal Opportunities, Access and Lifelong Learning (EQUALL), chaired by Dr David Fussey, Vice-Chancellor of the University of Greenwich.

10. Following advice from the EQUALL Committee, initial proposals on how we could encourage institutions to widen participation were discussed at our Annual Conference in April 1998 and in regional seminars throughout June and July. These discussions have informed the proposals outlined here for consultation.

Issues and principles

11. Higher education institutions (HEIs) have achieved a great deal in the last few years in terms of widening the profile of the student population. HE is a far more inclusive activity than it was. For example, women now account for a majority of HE students, whereas 20 years ago they represented one-third. Students from ethnic minority backgrounds, taken together, are well represented (although some groups, such as Moslem women and young black Caribbean men, are still significantly under-represented). And there is now a well established tradition of participation in HE by mature students.

12. However, much remains to be done to increase the participation of certain groups who continue to be under-represented. Our research shows that young people from the wealthiest backgrounds are 12 times more likely to enter HE than those from the poorest backgrounds ('The Influence of Neighbourhood Type on Participation in Higher Education'. HEFCE April 1997). This is based on analysis which marries postcodes with information from the census and other surveys, including surveys on family income.

13. We can play a significant role in encouraging institutions to widen participation further, primarily through funding incentives. However, in doing so we must be careful to avoid potential problems and unintended consequences. In particular:

a. The options open to the Council are on the supply side. However, the main problem is one of demand, and in particular the availability of qualified students from disadvantaged groups. HEIs have an important role to play: they can take action to widen the population from which they recruit students; and they can also link with schools, FE colleges and community groups to raise expectations and improve attainment rates among those young people with the potential to benefit from HE.

b. We know that different institutions have very different profiles of social mix in their student populations - and we will soon share this information with individual institutions. We also know that there is a correlation between social class and success at 18 years in level three qualifications (A-levels and their equivalents). We must be careful not to penalise institutions for failing to be socially inclusive simply because they have particular entry requirements. On the other hand, it appears that institutions could do more to recruit appropriately qualified students from poor backgrounds. That they do not do so now may be due to either inadequate information and advice to students, or weaknesses in institutional recruitment policies and processes. In their own interests, and that of students, we would like more institutions to address their recruitment strategies, particularly to identify students who have the ability to benefit but who may have qualifications or experience other than A-levels - for example, by emulating those institutions which already recognise qualifications such as GNVQs, Edexcel national diplomas, and nationally kitemarked Access Courses in their recruitment policies.

c. The focus of our support should not be only on student recruitment. Our research shows how non-completion (defined as students failing to achieve the goal which they had set for themselves in a particular year) correlates with a number of factors, particularly entry qualifications and social class. We must be sure that wider participation in HE does not simply result in more students failing. Within our proposed funding programme we seek to support institutions in establishing and improving structures that help students from non-traditional backgrounds to succeed.

14. Following from this, we believe that a number of key principles should underpin our approach to funding widening participation in HE:

a. Access to achievement - we should encourage institutions not only to increase the participation of students from under-represented groups but also to help such students succeed.

b. Increased collaboration - priority should be given to collaboration between HEIs and partners from other education sectors to improve progression routes to HE for under-represented groups.

c. Recognising diversity - we should avoid prescription in our funding and allow for differences in institutional approach, adopting different funding approaches to recognise the diversity of missions and strategies in the sector.

d. Targeting certain groups - emphasis should be placed on improving the representation of particular disadvantaged groups.

Funding objectives

15. In the light of the previous discussion we propose that our funding objectives should be to:

a. Reward proven success and encourage institutional improvement in widening participation.

b. Recognise the additional costs of providing access to under-represented groups.

c. Increase the representation in HE of particular disadvantaged groups - for example, disabled students, young people from poor backgrounds, and those who missed out on HE opportunities first time round.

d. Build partnerships between HEIs, schools and especially the FE sector to improve the progression rates to HE of previously disadvantaged students.

e. Promote and disseminate good practice in strategies to widen participation.

f. Support activity designed to retain students.

g. Encourage collaboration between HEIs to promote the above objectives.

16. We seek comments on the proposed principles and funding objectives underpinning our approach to widening participation in higher education.

Targets

17. We would like to consider whether we should set targets for improving the participation of under-represented groups. To determine whether our funding objectives have been met, or whether the proposed funding mechanisms are having an impact, we may need measurable targets. However, there are a number of tensions to be resolved.

18. On the one hand, sector-wide targets would provide a focus for both Council and institutional activity. They would enable us to monitor progress towards improved participation rates of disadvantaged groups as well as the impact of our funding strategy. Specific national targets could provide an important marker for individual institutions' strategic objectives. On the other hand, the basis for establishing national targets is unclear, particularly given that future participation rates of some groups may be largely determined by factors outside the control of HE. Quantitative targets may not reflect the cultural and organisation changes which may be necessary within some institutions.

19. In keeping with the proposal to place increased emphasis on institutions' own participation strategies (see paragraphs 43-50), a better approach would be to require institutions to provide a range of strategic targets and performance indicators against which they would monitor achievement of their goals. These, aggregated across the sector, would provide us with measures against which to monitor progress and the impact of policy across the sector. Institution-based targets and performance measures could eventually provide benchmarks for institutions, which could have a more constructive impact than sector-wide targets. They would also enable institutions to respond to the need to widen participation within the context of their own mission and circumstances.

20. We would expect institutions to include two key targets against which we would monitor both institutional and sector progress:

a. Targets for improving the representation of specific under-represented groups.

b. Targets for improvements in student retention, particularly for non-traditional students.

21. Our Performance Indicators Steering Group will be developing a range of performance indicators and benchmarks which recognise the diversity of the sector. The group has agreed in principle to a range of indicators which will measure the extent to which institutions recruit from under-represented groups. Measures of student progression have also been identified. We will seek comments from institutions on these performance indicators early in 1999.

22. We seek comments on our proposals to require institutions to provide targets and performance measures against which to monitor improvements in widening participation.

Funding mechanisms

23. In order to meet our funding objectives we propose that a combination of funding approaches should be introduced, both through the mainstream teaching funding method and through special funding initiatives.

Mainstream funding

24. In providing funds for teaching in the future we propose to allocate to institutions additional funds in respect of the participation of certain types of student. These additional funds would provide for the additional costs of provision for such students, support proven success in widening participation and provide an incentive for institutions to improve in this respect. The student-related additional funds would be for students from poor backgrounds, and for students with disabilities.

Students from poor backgrounds

25. The purpose of this new student-related funding would be to recognise the additional costs which more pro-active recruitment strategies for this group of students would incur. Such strategies could include developing alternative routes and pathways for entry to HE; summer schools for access and recruitment; Compacts between HEIs and schools; guidance and counselling at application and entry stages.

26. The additional funds would also recognise the costs of appropriate support structures (academic and pastoral) to ensure these students complete their courses. In allocating the additional funds we would expect more of such activity to take place in institutions to ensure wider participation.

27. So far, there has been no reliable way to define and measure such students. However, if we are to use funding to improve the participation of students from poor backgrounds, we need to agree an appropriate measure. There are two main alternatives: indicators based on social class and on geodemographic techniques. The sole source for the former would at present be information from the Universities and Colleges Admissions Service (UCAS). However, this applies only to full-time students, and is based on their own description of their parents' occupation. Geodemographic techniques, on the other hand, provide a measure related to social background for almost all students. We are able to use postcodes to link each student in each institution to a classification of neighbourhood type, from the most deprived to the most affluent. However, this is by no means a precise measure of social class. (More detailed discussion of these alternatives is at Annex A.)

28. We believe that geodemographic analyses provide a sufficiently robust basis on which to allocate funds at the institutional level to encourage wider participation. However, we invite views on this, and on possible alternatives.

29. We propose that an appropriate payment should relate to the number of full-time equivalent students from poor backgrounds (identified by whichever measure of poor background is agreed after this consultation). The value of the payment will be based on further analysis of the additional costs associated with the recruitment and retention of such students, and the money available in 1999-2000.

Additional funds for students with disabilities

30. We recognise that institutions providing for disabled students incur additional costs. Until now the absence of a robust measure to count and monitor such students has prevented us from recognising these costs by applying a student-related premium. However, the Government has recently removed the means test for the Disability Student Allowance (DSA), so receipt of the DSA could be used to identify disabled students more accurately than in the past. Furthermore, if the DSA is extended to postgraduate and part-time students - as is currently being considered by the Government - it would be an even more accurate measure. Therefore, we propose to introduce a student-related additional payment for all disabled students, defined as students who receive a DSA. This could be introduced in 2000-01, when we expect to have suitable data on DSAs.

31. We propose that an appropriate payment - to be based on the money available, and current research into the costs of base-level provision for all disabled students - is applied to the number of students who receive a Disability Student Allowance.

32. The additional payments will be made in the allocation of funds for teaching and will be re-calculated each year based on the number of relevant students recruited by each institution.

33. Comment is invited on:

a. The proposal to introduce student-related payments in the teaching funding method for students from poor backgrounds and for students with disabilities.

b. The use of either social class or geodemographic data to measure students from poor backgrounds for funding purposes, as discussed in detail in Annex A.

Additional student numbers

34. We have already included widening access for groups under-represented in HE as a key national priority in allocating additional student numbers in 1998-99. This will continue to be a specific criterion in the allocation process, and it will direct increased student numbers to institutions with a commitment to widening participation. In particular, we recognise the important role which many further education colleges play in widening participation in HE, because they are local, and because they provide HE certificate and diploma-level programmes. We would expect FE colleges with HE provision to benefit from the emphasis given to HE diploma-level provision in the Government's plans for growth in HE, to encourage the development both of efficient and effective progression routes to degree level and of HE diploma-level qualifications as routes into employment. We will soon issue an invitation to bid for additional student numbers in 1999-2000 to all HE institutions and all FE colleges.

35. We invite comments on our proposal to continue to give priority to widening participation, and to diploma-level provision, in the allocation of additional student numbers.

Special funding

36. Special funding enables us to direct funds to support or develop specific activities with particular outcomes. Most special funding is allocated through a competitive bidding process. We intend to earmark special funds for:

a. Building partnerships between HEIs, schools, FE colleges (in particular) and other providers to improve progression routes to HE for under-represented groups. This will complement the activity presently taking place in the FE sector in response to the Kennedy report, 'Learning Works'. In future years we intend to develop joint initiatives with the Further Education Funding Council.

b. Disseminating and embedding good practice. It is important to share what institutions are doing and to facilitate the transfer of good practice. We will aim to do this through existing support and development networks in the FE/HE sectors.

37. We have launched a £2 million initiative in 1998-99 for these purposes. We will be allocating funds to regional and local partnerships between HEIs, schools, FE colleges and other providers to improve progression routes for under-represented groups. This will cover a range of activity including joint outreach work, an increase in Access Courses and the development of innovative progression schemes - for example, the use of summer schools as access routes to HE. We will soon be disseminating good practice and developing ways in which it can be shared by existing institutional networks. We are supporting the promotion of women into science, engineering and technology through the Commission on University Career Opportunities (CUCO) Athena Project; and we intend to build on our previous successful initiatives aimed at improving provision for students with disabilities.

38. In the light of comments from institutions in regional seminars held in July 1998, we intend these initial developments to extend beyond 1998-99. The HEFCE Board has provisionally committed a further £4 million to continue existing special programmes and develop related programmes in 1999-2000. We will consider increasing these funds in the light of experience gained in the near future and the available funds from Government.

39. We seek comments on the purpose and nature of special funding, and suggestions for priorities for future special funding.

Funding

40. To make an impact on the nature of student participation and institutional participation strategies, we need to allocate significant resources to this policy. We propose that the balance of funds should lie, at least initially, more towards mainstream rather than special funding. We propose this balance because of the need to give institutions support for existing students and to allow institutions to act straight away on their present successful practices.

41. We would like to spend up to £30 million to support these proposals, but this will depend in part on the funds available. The HEFCE Board will agree the final amount in December, following this consultation and the Government's expenditure plans for HE in the years 1999-2000 to 2001-02. The funds associated with student numbers for widening participation would be additional to this amount.

42. We invite comments on our funding proposals for widening participation, and in particular the balance between mainstream and special funding.

Institutional participation strategies

43. The Dearing Committee emphasised the importance of institutional strategies for widening participation, stressing the need for institutions' governing bodies to monitor and review achievements. In its response to the Dearing report, the Government agreed that institutions should review their strategies and publish outcomes of the review and how their access and participation strategies have been implemented.

44. We recently consulted the sector on changes to their corporate plans and how we use these plans (HEFCE 98/13). We propose to introduce a three-year cycle for corporate plans, focusing on high level strategic aims. In the course of the three-year cycle we would request additional specific policy strategies to inform our policy development and funding initiatives. We propose that this should include institutions' participation strategies, the development and improvement of which could become a feature of our funding programme.

Role of institutions' strategies

45. The purpose of participation strategies would be to encourage institutions to develop coherent and planned approaches to the recruitment and progression of all students, particularly those from groups under-represented in HE. Such strategies would highlight institutions' commitment to these objectives, describe the activities undertaken to achieve them, and the support structures required.

46. We believe that, in future, the proposed payments and the additional student numbers for widening participation should only be allocated to institutions that have an institutional participation strategy, and can show that they are implementing it.

Nature and monitoring of participation strategies

47. Participation strategies will vary according to the mission, ethos and wider strategy of an institution. We intend to support diversity rather than prescribing any particular set of approaches or strategies for widening participation. To be effective such strategies must be owned by institutions, rather than being simple responses to our requirement for plans. Institutions' governing bodies must take responsibility for these plans, their monitoring and review.

48. We do not intend to compare strategies on a competitive basis for funding allocations. However, we propose to provide generic guidance on what we expect to be covered, to ensure there is evidence for funding decisions. Institutions could then respond according to their individual circumstances and wider missions. We believe that such a light touch would be welcomed by many institutions. An example of such guidance is outlined in Annex B.

49. In linking participation strategies to funding and the allocation of additional student numbers we will need mechanisms for monitoring to ensure that the strategies are being implemented. These mechanisms should be sufficient to satisfy our needs but not too burdensome for institutions. Annex B outlines possible monitoring arrangements.

Timetable for institutions' strategies

50. It is unlikely that all institutions will have enough time to produce full explicit strategies to inform funding decisions for 1999-2000. Therefore, the link between participation strategies and funding could take effect from 2000-01. This would enable us to promote and disseminate good practice, and help institutions develop appropriate strategies. The EQUALL Committee will be asked for advice on this in due course.

51. In the meantime, the student-related funds could be assigned to institutions in 1999-2000 on the basis of quantitative indicators only. These funds would be for one year only, until validated by participation strategies submitted by institutions in time for funding in 2000-01. We propose the immediate introduction of the additional funds, with strategies being developed later, even though for a small number of institutions this might mean funds being reduced in future if no acceptable participation strategy is forthcoming.

52. We seek comment on:

a. The proposal to link institutions' participation strategies to funding.

b. The nature of participation strategies and the proposed guidance in Annex B.

c. The proposals for monitoring the implementation of participation strategies, as outlined in Annex B.

d. The proposed timetable for linking participation strategies to funding.

Summary of responses sought

53. We invite comments and discussion on our strategic objectives to widen participation in HE, and the funding proposals to deliver these objectives. In particular, we would like comment on:

a. The proposed principles and funding objectives underpinning our approach to widening participation in higher education.

b. The proposal to require institutions to provide performance targets and measures against which to monitor improvements in widening participation.

c. The proposal to introduce student-related additional payments in the teaching funding method for students from poor backgrounds and for students with disabilities.

d. The use of either social class or geodemographic data to measure students from poor backgrounds for funding purposes, as discussed in detail in Annex A.

e. The proposal to continue to give priority to widening participation and diploma-level provision in the allocation of additional student numbers.

f. The purpose and nature of special funding and suggestions for priorities for future special funding programmes.

g. Our funding proposals for widening participation, and in particular the balance between mainstream and special funding.

h. The proposal to link institutions' participation strategies to funding.

i. The nature of participation strategies and the proposed guidance in Annex B.

j. The proposals for monitoring the implementation of participation strategies, as outlined in Annex B.

k. The proposed timetable for linking participation strategies to funding.

Responses

Please send responses to this consultation by 2 November 1998 to:

Nicola Dowds
Policy Directorate
HEFCE
Northavon House
Coldharbour Lane
Bristol
BS16 1QD

Annex A

Measurement of socio-economic background

Overview

1. There are two sources of data which can provide a measure of the socio-economic background of students:

• the social class, based on an occupation code for the student's parents
• the postcode of the student's home.

2. In theory it would be possible to develop a measure based on the means testing of students for fee payment, but this information is not available at institutional level, nor are there any plans to collect it at this level.

Social class

3. Young UCAS entrants (defined as under 21 on 30 September of year of entry) provide a description of the occupation of their highest earning parent or guardian and, from this description, UCAS derives their 'social class'. This measure is only available for UCAS entrants, which excludes part-time students and all direct entrants. It is also based on a self-assessment, which cannot be audited or verified. The difficulties in consistently and completely deriving occupation codes from descriptions are well known. It is possible that students from one region would be more likely to be coded as 'unknown' than those from another; this would introduce a systematic institutional-level bias. However, on the plus side, social class is related to the circumstances of individual students; and the issue of participation by different social classes has been widely reported and discussed, and is in general better understood than other measures of socio-economic background.

4. Social class will be collected on the Higher Education Statistics Agency (HESA) record from 1998-99; data from the full July return will be available in early 2000. Any allocation based on social class before this date would require data to be passed to the HEFCE from UCAS. This would be technically possible, but would require the agreement of UCAS and the institutions.

5. If this measure were to be adopted as a factor in funding, there would need to be discussions with UCAS. Decisions about collecting occupation descriptions and coding occupations are currently made without reference to any funding implications.

Postcode-based classifications

6. Some of the weaknesses of social class measures can be overcome by using the postcode to identify the neighbourhood or locality of students' homes before they enter the institution. There are several ways to measure the social and economic standing of that neighbourhood, all of which are largely or entirely based on census data. These include:

• bespoke models
• Department of the Environment, Transport and the Regions (DETR) index of local conditions
• geodemographic classification systems.

Bespoke models

7. The Scottish Higher Education Funding Council has commissioned research by Professor Raab at Napier University into the factors affecting participation in higher education. The analysis was carried out at a relatively high level of aggregation (about 5000 households) yet still demonstrated the strength of the association between social class, unemployment levels and participation in higher education.

8. There are clearly some advantages in using a model specifically derived for analysing higher education participation. However, the resources required to extend such an approach to England would be considerable, particularly if the results had to be sufficiently robust to support a funding allocation.

DETR index of local conditions

9. The DETR index of local conditions was developed by the Centre for Urban Policy Studies at the University of Manchester. The index combines a number of indicators into a single deprivation score.

10. The index is based on a relatively small number of variables, compared with the geodemographic classifier described below. The problems of local fluctuations and distortions caused by extreme values are, arguably, more severe than for a more broadly based geodemographic classifier. The index is particularly good at identifying extreme levels of social deprivation, but low levels of participation in higher education are not confined to such extremes. We have not yet examined the relationship between participation and the DETR index, but we intend to do so in the near future.

11. The DETR index has the advantage of being widely used within Government, and is already used by other funding councils, albeit in a modified form. But with this indicator we could provide institutions with a look-up table, so that they could work out their widening participation factor for themselves.

Geodemographic classification systems -Super Profiles

12. Over the last 20 years a variety of geodemographic classification systems have been devised. The classification we used in our analysis of the relationship between neighbourhood affluence and participation levels was developed by Professor Batey and Dr Brown at the University of Liverpool, and is licensed under the name 'Super Profiles'.

13. Other geodemographic classifiers could have been used, though Super Profiles has some advantages for the HEFCE applications. In particular, Professor Batey and Dr Brown have a long track record of using geodemographic classifiers for policy analysis and development in the public sector.

14. The Super Profiles classification was based on a large number of census variables, supplemented by electoral roll and commercial trading data. This broad base of data, and the subsequent process of data reduction and clustering, along with the explicit treatment of smaller enumeration districts, means that the classification system should provide a stable measure even when applied to small areas. It also covers a range of affluence, from the very well off through to the poorest. We have shown that there are marked differences in higher education participation between the different neighbourhood types identified by this geodemographic classifier.

15. One disadvantage in using this classifier for funding is that it would not be possible (other than at high cost) to make the classification system available to institutions. The resulting student profiles can and will be made available, and it may be possible to provide the classification right down to the individual record level. But without purchasing the software licence, institutions would not be in a position to work out their student profile for themselves.

Mature students

16. For young students, both the social class data and postcode identification are related to the students' socio-economic origins, through information about their parents' occupations and parental home. For mature students this is not the case. The Universities and Colleges Admissions Service (UCAS) only collects data on the occupations of parents for students under 21. Older students provide a description of the occupation of the person who contributes the highest income in their household. Similarly, whilst it is reasonable to assume that the postcode collected for most young entrants is their parental home, this is unlikely to be the case for mature students.

Conclusion

17. Our preferred method of measuring the socio-economic background of students is through the use of the postcode to identify the neighbourhoods of students' homes. We have found that the Super Profiles geodemographic classifier is able to distinguish between neighbourhood types with markedly different higher education participation rates and, currently, this classifier is our first choice for funding allocations. However, we will be looking closely at alternative systems based on postcode identification and will take into account the views of institutions, particularly in respect to their requirements for their own monitoring.

Annex B

Proposed generic guidance for institutions' participation strategies

1. Institutions' participation strategies should include the following:

a. A description of how the participation strategy relates to the over-arching corporate strategy and financial plan, and to other related sub-strategies - for example, for learning and teaching, and staff development.

b. Clear listing of aims and objectives, and strategies for achieving these.

c. An understanding of the present and potential student population of the institution.

d. Identification of target groups and any specific targets.

e. Identification of key partners and collaborative relationships related to the implementation of the strategy, and delivery of the aims and objectives.

f. Evidence of mechanisms to monitor and measure progress against targets and objectives.

g. Provision for review of the strategy and its publication by the governing body.

h. Evidence of approaches to student support (academic and pastoral).

i. Approaches to improving student retention and specific associated targets.

Proposed monitoring arrangements for institutional participation strategies

2. Monitoring arrangements could include the following, which are not mutually exclusive:

a. The HEFCE's regional consultants could validate that institutions' strategies broadly follow our guidelines. The EQUALL Committee could provide an overview of strategies and consider cases where strategies may not initially meet our criteria for premium funding.

b. Institutions' governing bodies could be asked to monitor and review progress of their participation strategies (including indicators which demonstrate their performance against strategic objectives). They could also be asked to publish these reviews every three years, in parallel with the three-year corporate plan.

c. In developing performance indicators for the sector, we could monitor appropriate measures of institutional and sector-wide performance relating to widening participation and student progression. This would eventually provide opportunities for institutional benchmarking of such activity.