Report 99/24

Widening participation in higher education: Funding decisions

Executive summary

Purpose

1. This document describes the responses to HEFCE 98/39 (Widening participation in higher education: funding proposals); outlines decisions on our approach to funding widening participation in higher education (HE); announces related funding allocations; and provides information about the timetable for bidding for special funds and for the development of initial institutional statements on plans for widening participation.

Key points

2. Our key aim is to increase the recruitment and retention of students from under-represented groups, primarily through formula funding but also through a complementary special funding programme to support partnerships, innovation and development work.

3. The new measures complement the wider range of activities already in place to support the objective of widening participation. These include premiums for part-time and full-time mature students, the allocation of additional student numbers to widen participation, and the Access Funds and fee remission for part-time students.

4. We have introduced in the teaching funding method for 1999-2000 a funding supplement for young full-time undergraduate students from disadvantaged groups. This supplement is to recognise the additional costs of recruiting and retaining such students.

5. We expect to provide limited support for institutions that are particularly successful in recruiting part-time students from disadvantaged groups from 1999. The details will be announced in May 1999.

6. In the immediate term, for HEFCE-funded institutions, these students will be defined by one of 40 ‘neighbourhood types’, from the most deprived to the most affluent.

7. We will extend the existing premium for full-time mature students from new entrants to all undergraduate years from 1999-2000.

8. We expect to introduce in 2000-01 a funding supplement to recognise that institutions incur additional costs in providing for disabled students when robust data on the number of students with disabilities should be available.

9. In 1999-2000, £7.5 million will be allocated through a special funding programme, for developing partnerships between higher education, schools and community groups – building on the projects supported in 1998-99; disseminating and embedding good practices; and continuing to improve provision for students with disabilities.

10. Institutions will be asked to provide by October 1999 initial statements on their: objectives for widening participation; plans for the additional formula funding allocated for widening participation; recruitment targets for under-represented groups and targets for improvements in their retention. Institutional plans in this area, and achievements against these plans, will be monitored by the Council through the annual operating plan cycle.

Background

11. HEFCE 98/39 outlined the broad strategy which we proposed for widening participation in higher education and invited comments on our related funding proposals. The importance of our proposals was underlined by the Secretary of State in his November 1998 grant letter, which identified widening access to higher education as one of the Government’s key priorities in the Comprehensive Spending Review (CSR) settlement.

12. We received over 130 responses to the consultation, which indicated that there is broad support from all parts of the sector for our strategy and funding proposals. In particular, there is wide support for:

a. The principles and funding objectives underlying our strategy (see Annex A).

b. Additional funding to be allocated primarily through the teaching funding method, but with some separate special funding.

c. A link between institutional participation strategies and funding.

d. Institutions generating their own targets rather than the HEFCE setting sector-wide targets for participation.

13. Our Equal Opportunities, Access and Lifelong Learning Committee (EQUALL) has considered the key issues which emerged from the responses, and its advice has informed the Board’s specific funding decisions described in this document.

Purpose

14. It is widely recognised that more needs to be done to increase participation in HE by students from under-represented groups, particularly those from disadvantaged backgrounds and disabled students, and to improve the retention of students from such groups. This is the central objective of our funding proposals. We have developed funding measures to encourage all institutions to do more in this area as well as to support proven success. The new measures described below are in addition to those already in place for part-time and mature students.

15. We recognise that extra support is needed to help institutions to make the additional provision needed to recruit and retain such students. Student retention is a particularly important issue: our research has reported greater levels of non-completion among students from disadvantaged backgrounds than among other students.

Institutional diversity

16. In the responses to HEFCE 98/39, a number of institutions raised concerns about the extent to which our proposals might constrain institutional diversity. We will ensure that they do not. Although we do seek and expect some changes to follow, we do not expect this programme to induce wholesale transformation of institutional mission across the sector.

Funding mechanisms

17. There was wide support for our proposed combination of funding approaches: through mainstream formula funding, the allocation of additional student numbers, and a special funding programme. In particular, our proposal that the balance of funds available should lie more towards mainstream formula funding rather than special funding was generally supported. However, the need for some special funding was acknowledged by many, particularly to support innovative and developmental activity which may not produce short-term returns in respect of the increased participation of disadvantaged groups. Furthermore, institutions with low numbers of students from the student groups which would attract additional funding through our mainstream funding proposals argued that significant special funding was required to enable them to invest in development and outreach work.

18. Therefore, from 1999-2000 we will introduce a combination of funding approaches through the mainstream teaching funding method, the allocation of additional student numbers, and a special funding programme, with the majority of funds being provided through formula funding.

Mainstream funding

19. We already have within the teaching funding method student-related premiums for part-time students and full-time mature students. These funding premiums are to provide for the additional costs of providing for such students. There is general support for our proposals to recognise the additional cost of providing for students with disabilities and for those from disadvantaged backgrounds by providing additional funding for those groups too.

Students with disabilities

20. In order to introduce additional funding for students with disabilities, we need a robust measure to count and monitor such students. We intend to use data on the number of students in receipt of a Disabled Student’s Allowance (DSA) as a proxy measure for the number of disabled students in each institution. Suitable data on DSAs should be available from the DfEE in 2000-01, when we plan to introduce student-related additional funding for disabled students in the teaching funding method. The HEFCE Board will consider the details of this funding in December 1999.

Students from disadvantaged backgrounds

21. We raised in the consultation document the problems of identifying a reliable way to define and measure the numbers of students from disadvantaged backgrounds. In the absence of better alternatives, and despite some misgivings, there was general support for starting with geodemographic techniques, which provide a measure related to the social background of almost all students. (We are able to use postcodes to link each student in each institution to a classification of 40 neighbourhood types, from the most deprived to the most affluent – the detailed methodology is described in HEFCE 98/39).

22. Although we recognise that there are some flaws in the use of geodemographic data, we believe this is the best measure currently available for allocating funds in respect of students from disadvantaged backgrounds. Therefore, we will use this measure until any better and more precise measures are developed in the future.

23. For each of the 40 geodemographic groups we have computed a young participation index related to the proportion of young entrants to full-time HE in each of the groups. The average participation rate for this index across all groups is 32 per cent (approximately one in three). Our research has shown that the index is linked to affluence: the higher the level of affluence on average, the higher the rate of participation. By classifying the 40 geodemographic groups according to this index into those above and below the average 32 per cent participation rate, we can identify those groups under-participating in HE – most of which are from the less affluent neighbourhoods.

24. Therefore, the additional funding will be applied to young full-time undergraduate entrants to HE from lower than average participating geodemographic groups in each institution. In 1999-2000, institutions will receive additional funds for widening participation as measured by the numbers of such students. In 2000-01 and subsequent years, institutions which have increased the number of such students will receive further additional funding. This will encourage improvement in the recruitment of students from disadvantaged backgrounds.

25. This additional funding is distinct from the existing premiums for part-time and full-time mature students because it supplements the funding made available through the teaching funding model. Although the part-time premium already recognises the additional costs of such provision we will also provide limited additional funds for institutions that are particularly successful in recruiting part-time students from disadvantaged groups. We will announce details of this in May 1999.

26. We will monitor closely the scale of improvement in the recruitment and retention of disadvantaged students on an annual basis to determine the need for additional funds and the success of this policy. Individual institutional allocations are contained in their grant letter for 1999-2000.

Full-time mature students

27. The new student-related additional funding (for students from disadvantaged backgrounds and for disabled students) will apply to all years of undergraduate study, as does the existing part-time premium. However, the full-time mature student funding premium applies at present only to first-year students. The rationale for this restriction was that the principal costs associated with such students are concerned with recruitment and initial support. This was a fine judgement which has subsequently been criticised. We now believe it would be right to extend the premium to full-time mature students in all years, to make it consistent with the other student-related premiums.

Use of additional funding

28. The purpose of the proposed student-related additional funding is: to cater for the additional costs of provision for the students concerned; to support proven success in widening participation; and to provide an incentive for institutions in this respect. We do not propose to be prescriptive in requiring institutions to use the additional formula funds in specific ways: none of the other premiums are for prescribed purposes. However, there are a number of areas where we expect institutions to be active and to incur additional costs. These include:

a. Additional academic support and counselling.

b. Additional contact hours.

c. Special recruitment schemes (for example, summer schools and outreach work).

d. Special retention schemes (for example, mentoring).

e. Staff development – in respect of recruitment strategies, retention programmes, and learning and teaching strategies to meet the diverse needs of students.

f. Additional support structures and facilities, especially child-care arrangements for mature students.

g. Maintenance and development of in-house expertise in reaching out to non-participating groups and the wider community, and in developing flexible delivery of HE.

29. Such activity is undertaken in respect of part-time and full-time mature students as well as students from disadvantaged backgrounds.

30. We will also ask institutions to indicate, via their initial statements on widening participation (paragraphs 37-39), how they will use this additional formula funding.

Additional student numbers

31. There is wide support for our proposal to continue to give priority to widening participation in the allocation of additional student numbers. This has already featured prominently in the criteria in the 1999-2000 bidding round (see HEFCE 20/97 and HEFCE 98/14). Furthermore, in future years, earmarking a number of additional part-time places for institutions collaborating with the University for Industry, as requested by the Government in the Council’s grant letter, will also contribute to widening access for new groups of learners.

Special funding

32. We initially proposed to allocate about £4 million per year in special funding to support development activity. As discussed in paragraph 17 many of the responses argued that a larger amount was required to support institutional development and partnership activity, particularly where expertise needed to be developed. Therefore, a special funding programme of £7.5 million will be established in 1999-2000 with three main elements:

a. Building partnerships. In 1998-99 we allocated £1.5 million to 25 regional partnership projects involving HEFCE-funded HE institutions, further education colleges, schools and community organisations to initiate joint activity to improve progression to HE for students from disadvantaged backgrounds (see HEFCE 99/07). When we launched this initiative we anticipated that additional funds would become available from 1999-2000 and indicated to institutions that the projects established in 1998-99 could be extended if additional funds were forthcoming. The new funds could be used to support:

i. The implementation of activities arising from the development phase of many of the partnership projects funded in 1998-99. We would expect projects to identify clear aims and outcomes for the planned activity.

ii. The development of new partnership projects which could not be supported in 1998-99 because of the limited funds available.

We will also consider with the Further Education Funding Council the scope for developing elements of such collaborative activity into a joint special funding programme.

b. Disseminating and embedding good practice. We have already started the process of promoting good practice through a number of the schemes funded in 1998-99. In particular, institutions have welcomed the opportunity to draw on expertise which we will make available through practitioner networks.

There was support in the consultation for special funding support for innovation and the embedding of activity which was unlikely to be supported by formula funding. The type of activity which will be supported will vary widely according to the experience of the institution. On the one hand, there will be institutions which may seek to introduce and embed good practice developed in other institutions; on the other hand, there will be institutions which may seek to extend their experience into new areas. This funding stream would provide earmarked funds for activity within this wide range, with the aim of supporting institutions in adopting good practice and developing their capacity to widen participation.

c. Improving the quality of provision for disabled students. The introduction of student-related additional funding for disabled students will go some way towards recognising the additional costs of providing for such students. However, special development funding will improve the level, extent and quality of provision for disabled students, and will also help us to discharge our statutory responsibility to have regard for the needs of such students. Therefore, a further special funding programme of £2 million per year for three years will commence in 1999-2000 (see HEFCE 99/08 for the invitation to bid).

33. Details of the programme for students with disabilities were announced in February. Further details and an invitation to bid for the other two programmes will be issued in May. An outline timetable for these is at Annex B.

Institutional participation strategies

34. The responses to the consultation revealed significant support for our proposals to encourage institutions to develop coherent and planned approaches to the recruitment and progression of all students, particularly those from disadvantaged groups, through participation strategies. Many respondents also supported a link between funding and participation strategies.

35. Participation strategies should describe the activities undertaken and the support structures required to underpin institutions’ commitment to widening participation. Participation strategies will vary according to the mission, ethos and wider corporate strategy of an institution. We do not intend to prescribe any particular approach. To be effective such strategies must be particular to institutions, whose governing bodies will need to take responsibility for these plans, their monitoring and review.

36. We will also expect institutions bidding for special programme funding and additional student numbers for widening participation to place these bids within the context of their corporate plan and participation strategies. This will provide a specific link between a coherent and planned strategy and the funding of specific activity.

Initial strategic statements

37. In the light of the additional funds which we will allocate to institutions to widen participation, institutions are requested to provide initial statements on their objectives and targets for widening participation and the extent to which these fit with the institution’s wider corporate strategy (as referred to in Circular letter 3/99). In addition, we expect these statements to include:

a. Appropriate key targets for improving the representation and retention of students from specific under-represented groups against which institutions and the Council would monitor their performance.

b. Other indicators - for example, on processes and activities - and measurable outcomes for activities.

c. An indication of how the institution will use its additional formula funding provided from 1999-2000 (see paragraph 30).

38. In their discussions with institutions on annual operating plans, our Regional Consultants will consider the extent to which institutions are developing and implementing participation strategies, and will monitor institutions’ progress towards their key targets, as outlined in their initial statements, from July 2000 (see Circular letter 3/99).

39. In order to help institutions to consider what could be covered in the development of participation strategies and in their initial strategic statements, we will shortly provide guidance that will also include the range of possible indicators and measurable outcomes that might be used by institutions. We will expect institutions to have provided us with initial statements by October 1999. We will also outline for FE colleges appropriate separate arrangements for setting widening participation targets, and monitoring them, for their HE provision. Further details will follow in May 1999.

Evaluation

40. We will establish mechanisms to monitor progress in widening participation, to take account of the various funding streams proposed: mainstream funding, the allocation of additional student numbers, and special funding programmes. We will also take into account other related funding which the Council provides on behalf of the Government (principally the distribution of Access Funds and fee remission for part-time students who become unemployed during their course or who are on benefits or low income).

41. As stated in paragraph 37, we will expect institutions to develop their own targets for improving the recruitment and retention of students from specific under-represented groups within the context of their corporate strategies. This approach will ensure that targets are meaningful and appropriate to the nature and circumstances of the institution.

42. We will also be able to monitor institutional and sector progress through performance indicators, which our Performance Indicators Steering Group is developing (see HEFCE 99/11).

Funding

43. The introduction of student-related additional funding for students from disadvantaged backgrounds, and a new special funding programme will provide a total of £21 million and £7.5 million of additional funds respectively in 1999-2000.

44. This funding is not the full amount provided by the Council in support of widening participation. To it should be added the amount for the existing student-related premiums for part-time students and full-time mature students (£28 million), £63 million in Access Funds and fee remission for part-time students, and an appropriate sum for additional student numbers provided in response to bids to widen participation in 1999-2000. In total, nearly £150 million will be provided in support of this important policy objective.

Annex A

Principles and funding objectives

1. The key principles underlying our approach to funding widening participation in HE are:

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.

2. The funding objectives underlying our approach to funding widening participation in HE are to:

a. Reward proven success and encourage all institutions to improve their record in widening participation.

b. Recognise the additional costs of providing access for 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.

Annex B

Outline timetables