Report 99/49

Recurrent grants for 1999-2000: final allocations

1. Executive summary

   Purpose

2. This document gives our final allocations of recurrent funding to institutions for the academic year 1999-2000.

   Key points

3. We have updated a number of the allocations given in HEFCE 99/13, principally to incorporate the outcomes of the bidding exercise reported in HEFCE 99/38, ‘Additional student places and funds 1999-2000’. As a result, the total recurrent funding allocation has increased by £99.4 million to £3,839 million.
4. We have allocated a further 18,966 maximum student numbers (MaSNs), largely for the additional funded places for 1999-2000.
5. The Financial Memorandum between the Council and institutions specifies the terms and conditions governing our grants.
6. Institutions supply data to inform funding allocations. We will continue to audit these data selectively, and will also use data from the Higher Education Statistics Agency (HESA) and the Further Education Funding Council (FEFC) 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

7. No action is required.

   Introduction

8. HEFCE 99/13 'Recurrent grants for 1999-2000', issued in March 1999, announced provisional allocations. This report contains the finalised allocations for the academic year 1999-2000.
9. All references are to academic years.

   Revisions to allocations

10. Table 1 in HEFCE 99/13 showed total grants for 1999-2000 of £3,739,355,641. The revisions to those allocations are shown below. There may be some differences within the figures due to rounding.

    All figures in £ Headings from Table 1	HEFCE 99/13 provisional allocations	Final allocations	Change
    Changes to teaching funds:
    Core funding	2,789,756,107	2,791,342,760	1,586,653
    Additional funded places	7,892,446	94,548,106	86,655,660
    Adjustments to core	16,873,370	18,645,586	1,772,216
    Widening participation from disadvantaged backgrounds	17,999,998	19,874,648	1,874,650
    Changes to total teaching funding	2,832,521,923	2,924,411,100	91,889,177
    Changes to research funds:
    Quality-related (QR)	835,000,001	835,040,178	40,177
    Generic research (GR)	20,000,000	19,931,653	-68,347
    Changes to total research funding	855,000,006	854,971,837	-28,169
    Moderation of teaching and research	6,654,072	5,918,761	-735,311
    Total changes to teaching and research grants	3,694,176,001	3,785,301,698	91,125,697
    Changes to special funding	45,179,640	53,482,952	8,303,312
    Changes in total grant 1999-2000	3,739,355,641	3,838,784,650	99,429,009

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

    	£
    Changes to transfer from the FEFC	342,442
    Validation fee compensation for Diploma in Social Work students	254,663
    Corrections of underlying data and miscellaneous transfers and adjustments	989,548
    Total	1,586,653

12. Other changes to teaching funds are as follows:
    1. ‘Additional funded places’ now includes the funding allocated in response to the bids for additional student numbers invited in HEFCE 98/56. We announced the outcome of this bidding exercise in HEFCE 99/38, ‘Additional student places and funds 1999-2000’.
    2. ‘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 99/13 are:
       1. The incorporation of funding for additional student numbers.
       2. Agreed changes to institutions’ migration strategies. These include the incorporation of recommendations by the Performing Arts Review Panel, as summarised in HEFCE 99/41, ‘Funding of specialist performing arts institutions’.
    3. ‘Widening participation from disadvantaged backgrounds’ includes an additional £1,772,321 for widening participation of undergraduate part-time students living in disadvantaged neighbourhoods. The remaining difference since HEFCE 99/13, of £102,329, is due to changes to the underlying HESA data which have informed the allocations.
13. Changes to total QR and GR research funds arise from the correction of underlying research activity data.
14. HEFCE 99/13 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) of more than 2 per cent in real terms compared with 1998-99. 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 £735,311. Institutions should note that any further changes to grant for 1999-2000 could affect the announced moderation funding.
15. Changes to special funding include £8,211,638 for museums, galleries and collections, allocated on behalf of the Arts and Humanities Research Board, and £91,674 for other miscellaneous adjustments.
16. Final grant allocations for 1999-2000 are given in Table 1. Table 2 compares them with the allocations for 1998-99. As explained in HEFCE 99/13, within Table 2, ‘Transfers into recurrent funds’ represent adjustments for comparison purposes to the total grant 1998-99 (excluding non-formula funding), given in Table 1 of HEFCE 98/41, for:
    1. Validation fee compensation.
    2. Fee compensation for outgoing exchange students.
    3. Fee compensation for intercalating medical students.
    4. Fee compensation for thin sandwich students.
    5. Fee compensation for further education colleges which we did not fund directly in 1998-99.
    6. The transfer of funds from the FEFC.
    7. The transfer from the DfEE into teaching funding of funds for undergraduate college fees for the Universities of Oxford and Cambridge.
    8. Other miscellaneous adjustments and transfers, including for the second year transfer to the Department of Health of funding for certain students in the healthcare professions.

    Maximum student numbers (MaSNs)

17. HEFCE 99/13 gave the MaSNs for 1999-2000 as 833,254. We have since allocated a further 18,966 MaSNs, so the total is now 852,220. These are shown in Table 3 and have also been included in institutions’ individual funding agreements. The main reasons for changes to MaSNs are:
    1. 17,499 for the additional student numbers allocated in response to the bids invited in HEFCE 98/56.
    2. 30 for changes to student numbers to bring institutions closer to the standard resource levels.
    3. 1,437 for other reasons, including for changes to the ITT intake targets set by the TTA, and to underlying recruitment data.
18. The MaSN definition has changed for 1999-2000, and is given in HEFCE 99/13. The MaSNs shown in this report are not comparable with those for previous years.

    Conditions of grant

19. HEFCE grants are conditional on the funds being used for the activities specified in section 65(2) of the Further and Higher Education Act 1992, and upon institutions delivering teaching and research. The conditions which apply to funding for 1999-2000 are set out in Circular 15/97, 'Model Financial Memorandum between the HEFCE and institutions (revised)'.
20. We recently sent each institution its funding agreement for 1999-2000, which forms Part 2 of our Financial Memorandum with higher education institutions. For those further education colleges whose higher education provision we fund directly, there is a single funding agreement which incorporates relevant parts of the financial memorandum. The funding agreement 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 99/46, ‘Holdback of HEFCE grant 1999-2000’, describes how we will monitor whether institutions have met their funding contract, and the action we will take if they have not.

    Audit of funding data

21. 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.
22. We may also use data which institutions provide to HESA or the FEFC to verify the data they send directly to us.
23. 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

24. Institutions requiring further information should contact their HEFCE higher education adviser.

Tables

Tables are available as an Excel workbook.

Table 1 Resources for academic year 1999-2000

Table 2 Comparison with 1998-99 academic year grant

Table 3 Distribution of Maximum Student Numbers (MaSNs).