Report 98/41

Recurrent grants for 1998-99: final allocations

Executive summary

Purpose

1. This document gives our final allocations of recurrent funding to institutions for the academic year 1998-99.

Key points

2. We have revised a number of the allocations given in HEFCE 98/09. As a result, the total recurrent funding allocation has increased by £22.4 million to £3,565 million.

3. Following adjustments to the recurrent funding for teaching, we have allocated a further 2,354 maximum aggregate student numbers (MASNs).

4. The Financial Memorandum between the Council and institutions specifies the terms and conditions governing our grants.

5. Institutions supply data to inform funding allocations. We will continue to audit these data selectively, and may use data from the Higher Education Statistics Agency (HESA) to verify them. If we find that the data were inaccurate, so that institutions have received higher allocations than they should have done, we may reduce their funding.

Action required

6. No action is required.

Introduction

7. HEFCE 98/09 'Recurrent grants for 1998-99', issued in March 1998, announced funding allocations for 1998-99.

8. All references are to academic years.

Revisions to allocations

9. Table 1 in HEFCE 98/09 showed total grants for 1998-99 of £3,542,560,254. The revisions to those allocations, which are described in more detail in paragraphs 10 to 14, are as follows:

10. Changes to core funding for teaching incorporate the following:

11. Other changes to teaching funds are as follows:

a. 'Additional funded places' now includes the funding allocated in response to the bids for additional student numbers invited in Circular 20/97. We announced the outcome of this bidding exercise in HEFCE 98/14.

b. Changes to fee compensation arise for authorised corrections to data relating to year abroad students, and for corrections to the student numbers within the MASN who are eligible for fee compensation.

c. 'Adjustments to core' includes changes to funding to help institutions migrate to within ±5 per cent of standard resource levels. Such changes may arise as a result of any recalculation of institutions' standard or assumed resource levels. The main reasons for changes since HEFCE 98/09 are:

1. the incorporation of funding for additional student numbers.
   
2. The incorporation of funding for the additional costs for medical schools.
   
3. The reclassification of certain provision within the Education and Sports Science and Leisure Studies cost centres to price group C.
   
4. Agreed changes to institutions' migration strategies.
   

12. Changes to research funds include additional funding for the Natural Resources Institute, and changes arising from the correction of underlying research activity data.

13. HEFCE 98/09 explained that, to help maintain stability, we would moderate the allocations so that no institution would receive a reduction in resource (our funding for teaching and research, plus regulated tuition fee income ((Regulated income is an estimate for comparison purposes of fee income which is subject to statutory controls. It relates to mandatory level fees, paid either by local education authorities, or students themselves, or a combination of both, depending on the outcome of means-testing. It is calculated from 1997-98 student numbers eligible for inclusion in the MASN, but excluding those who are fundable by the Teacher Training Agency. For 1998-99, the mandatory level fees are usually £1,000 per undergraduate full-time equivalent student, although they vary for particular categories of student.)) of more than 1 per cent in real terms compared with 1997-98. Any changes in our funding for teaching or research, or in the assumed level of regulated fee income, can result in changes to moderation funding. The changes in funding detailed above have resulted in an overall reduction in moderation funding of £133,051. Institutions should note that any further changes to grant for 1998-99 could affect the announced moderation funding.

14. Changes to special funding relate to allocations for specialist research collections in the humanities.

15. The revised total grant for 1998-99 is therefore £3,564,923,472. Final grant allocations for 1998-99 are given in Table 1. Table 2 compares them with the allocations for 1997-98. Within Table 2, 'Transfers into recurrent funds' represent adjustments for comparison purposes to the total grant 1997-98 (excluding non-formula funding), given in Table 1 of Circular 16/97, for:

a. Transfers between us and the Teacher Training Agency (TTA) relating to funding for in-service education for teachers (INSET).

b. Transfers into recurrent funding of the 1997-98 non-formula funding allocations for London extra costs.

c. 1998-99 funding allocations to assist diversification out of initial teacher training (ITT), where there is a reduction in ITT course length. These are treated as transfers from the TTA.

d. Other miscellaneous adjustments to 1997-98 and 1998-99 grant.

e. Transfers for certain students in the healthcare professions, whose funding is to transfer to the Department of Health in 1998-99.

f. Funding for the additional costs for medical schools for 1997-98.

The latter two adjustments account for the changes in the 'transfers into recurrent funds' since HEFCE 98/09.

Maximum aggregate student numbers (MASNs)

16. HEFCE 98/09 gave the MASNs for 1998-99 as 740,798. We have since allocated a further 2,354 MASNs, so the total is now 743,152. These are shown in Table 3 and have also been included in institutions' individual funding agreements. The main reasons for changes to MASNs are:

a. For the additional student numbers allocated in response to the bids invited in Circular 20/97.

b. Changes in the ITT intake targets set by the TTA.

c. Reductions because students whose funding will transfer to the DoH in 1998-99 will no longer meet the MASN definition.

d. Changes to bring institutions closer to the standard resource levels under our new funding method.

Conditions of grant

17. HEFCE grants are conditional on the funds being used for the activities specified in the Further and Higher Education Act 1992, section 65(2). The conditions which apply to funding for 1998-99 are set out in Circular 15/97, 'Model Financial Memorandum between the HEFCE and institutions (revised)'.

18. Grants are also conditional upon institutions delivering teaching and research. We recently sent each institution its funding agreement for 1998-99, which forms Part 2 of the Financial Memorandum. This specifies further conditions of grant governing our funding, and sets the level of teaching activity (the funding contract) which we expect institutions to deliver in return for HEFCE funds for teaching. HEFCE 98/38, 'Holdback of HEFCE grant 1998-99', describes how we will monitor whether institutions have complied with their funding contract, and the action we will take if they fail to do so.

Audit of funding data

19. Data collected from institutions inform the allocation of funds for teaching and research. We will continue to audit these data selectively in this and future funding exercises, through a number of audit visits.

20. We may also use data which institutions provide to the Higher Education Statistics Agency (HESA) to verify the data they send directly to us.

21. If we find that the data were inaccurate, so that institutions have received higher allocations than they should have done, we may reduce their funding.

Further information

22. Institutions requiring further information should contact their Higher Education Adviser.

Tables

These are availble as anExcel workbook.

Table 1: Resources for academic year 1998-99
Table 2: Comparison with grants for 1997-98 academic year
Table 3: Distribution of maximum aggregate student numbers