Report 00/34

Recurrent grants for 2000-01: final allocations

Executive summary

Purpose

1. This document gives our final allocations of recurrent funding to institutions for the academic year 2000-01.

Key points

2. We have updated a number of the allocations given in HEFCE 00/12. The main reasons for changes are:

1. Revisions to funding for additional student numbers.
2. Increased allocations for widening access and participation.
3. Transfers of student numbers and funding between institutions, particularly where further education colleges have chosen to be funded indirectly through a higher education institution.

3. Total recurrent funding has increased by £4 million to £3,958 million. We have allocated a further 2,510 maximum student numbers (MaSNs), largely due to changes in additional student numbers awarded for 2000-01.

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 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 will reduce their funding.

Action required

6. No action is required.

Introduction

7. HEFCE 00/12, ‘Recurrent grants for 2000-01’, issued in March 2000, announced provisional allocations of HEFCE funding for the academic year 2000-01. This report contains the final allocations.

8. All references are to academic years. There may be differences between individual figures and totals, due to rounding.

Revisions to allocations

9. Table 1 in HEFCE 00/12 showed total grants for 2000-01 of £3,954,026,971. The revisions to those allocations are shown in Table A.

Table A Revisions to provisional allocations

10. The changes to funding since March can be summarised under the following main headings:

1. Increased formula allocations for widening access and participation.
2. Revisions to funding for additional student numbers for 2000-01, following responses from institutions to the original allocations.
3. Institutional mergers and transfers.
4. Transfer to the Scottish Higher Education Funding Council (SHEFC) of funding responsibility for taught Open University students in Scotland.
5. Review of funding for specialist institutions.
6. Corrections to underlying institutional data and other miscellaneous transfers and adjustments.
7. Consequential effects of the above on funding for migration, moderation and MaSNs.

Increased formula allocations for widening access and participation

11. We made provision to allocate £20 million for students from disadvantaged backgrounds and £5 million for full-time undergraduate students with disabilities. These two allocations are made by formula on the basis of, respectively, postcode data and the numbers of students in receipt of the Disabled Students Allowance (DSA). The allocations announced in March totalled £24.4 million, the balance being set aside in anticipation of corrections to underlying institutional data.

12. We have increased the final allocations by £6,893,613, for the following reasons:

1. The Secretary of State announced in May a further £4 million to support widening participation of students from disadvantaged backgrounds.
2. The DSA is to be extended to part-time and postgraduate students from 2000-01. We have therefore provided an additional £2,006,337 to extend our allocations for disabled students to these categories.
3. Corrections to underlying data have increased the allocations by £887,276.

Revisions to funding for additional student places for 2000-01

13. The allocations announced in March included the additional places offered to institutions in response to the bids invited in HEFCE 99/56, ‘Additional student places and funds’. Some of those allocations have been revised to reflect institutions’ responses to those offers, particularly changes to the phasing of the additional places between academic years, and their attribution between price groups. We announced the places awarded for 2000-01 in HEFCE 00/26, ‘Additional student places and funds 2000-01: outcome of bids’. The changes to funding relating to that bidding exercise total £3,244,173.

14. We are also providing an additional £457,372 in funding for institutions that are diversifying out of initial teacher training (ITT). The total change to funding for additional places is therefore £3,701,545.

Institutional mergers and transfers

15. HEFCE 99/36, ‘Higher education in further education colleges: guidance for colleges on funding options’, set out the options for further education colleges (FECs) to obtain HEFCE funding for their higher education programmes. This could be directly from us, or indirectly through either a franchise or consortium arrangement. A significant number of FECs have now chosen to be funded indirectly from 2000-01. In addition, there are a small number of institutional mergers that will be effective in 2000-01. Annex A lists these new mergers and the changed funding routes for institutions that have been incorporated since our March grant announcement.

Transfer to SHEFC of funding for Open University students in Scotland

16. Funding responsibility for the Open University’s undergraduate and postgraduate taught students in Scotland is transferring to SHEFC for 2000-01. This will also include special initiative funding relating to widening access and participation and capital equipment for these students. This results in a reduction in HEFCE teaching funding for the university of £12,526,559.

Review of funding for specialist institutions

17. Advisory groups have reviewed the funding for a number of specialist institutions. The HEFCE Board generally endorsed their recommendations, which led to changes to funding for the following reasons:

1. We have extended the 10 per cent funding premium for specialist institutions to three art and design colleges (Cumbria College of Art and Design, Norwich School of Art and Design and Surrey Institute of Art and Design, University College).
2. We have reviewed the criteria for the award of specialist premiums to specialist music providers. This results in changes in funding for the Royal College of Music, the Royal Northern College of Music, and Trinity College of Music.
3. Special funding for minority subjects at the School of Oriental and African Studies will now be allocated through mainstream teaching funds.
4. The specialist premium for the University of London Institute of Education has been increased to recognise its role as a national resource.

18. We will publish the outcomes of the specialist institution reviews later this year. We expect to review institutions that receive a specialist institution premium of more than 10 per cent every five years to consider the need for continuing supplementary funding.

Corrections to underlying institutional data and other miscellaneous transfers and adjustments

19. There have been a small number of changes to underlying data affecting allocations of teaching or research funding. There have also been some other miscellaneous changes affecting teaching or special funding. These are summarised in Table B.

Table BChanges due to data corrections and other adjustments

Consequential effects on funding for migration and moderation

20. We wish to ensure that institutions’ resources for teaching (HEFCE grant plus an assumption of fee income) come within 5 per cent of standard levels. If institutions’ resources were outside this margin when we introduced our funding method, then we agreed a process of migration with them. This has involved adjusting their funding or student numbers to ensure they reach the 5 per cent threshold within an agreed period. The above changes affect our resource calculations and therefore can affect the adjustments to funding we provide for migration.

21. To help maintain stability, we have continued our policy of phasing in changes by moderating the allocations. Institutions will not receive a reduction in resource (teaching and research grant, plus regulated fee income) of more than 2 per cent in real terms compared with the equivalent figure for 1999-2000. The above changes can affect the need for moderation funding for individual institutions.

Summary of changes to grant

22. The above changes to grant are summarised in Table C, which uses the column headings from Table 1.

Table C Summary of changes to grants for 2000-01

View Table C in separate window

23. Final grant allocations for 2000-01 are given in Table 1. Table 2 compares them with the allocations for 1999-2000. Annex A of HEFCE 00/12 provided a full explanation of the column headings of these two tables.

Table 1 - Resources for academic year 2000-01
Available in MS Excel [92K] or zipped MS Excel [32K].

Table 2- Comparison with 1999-2000 academic year grant
Available in MS Excel [75K] or zipped MS Excel [26K].

Maximum student numbers (MaSNs)

24. HEFCE 00/12 gave the MaSNs for 2000-01 as 865,438. We have since allocated a further 2,595 MaSNs, to bring the total to 868,033. These are shown in Table 3 and have also been included in institutions’ individual funding agreements. Of the total changes to MaSNs, 2,366 relate to additional places awarded for 2000-01, either following institutions’ responses to the places offered through the bidding exercise invited in HEFCE 99/56, or for diversification out of ITT.

Table 3 - Distribution of Maximum Student Numbers (MaSNs)
Available in MS Excel [44K] or zipped MS Excel [13K].

Conditions of grant

25. 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 that apply to funding for 2000-01 are set out in HEFCE 00/25, 'Model financial memorandum between the HEFCE and institutions'.

26. We recently sent each institution its funding agreement for 2000-01, which forms Part 2 of our financial memorandum. For further education colleges whose higher education provision we fund directly, there is a single funding agreement that incorporates relevant parts of the financial memorandum. The funding agreement specifies further conditions of grant governing our funding, and sets targets relating to student numbers that we expect institutions to meet in return for our funding for teaching. HEFCE 00/31, ‘Holdback of HEFCE grant 2000-01’, describes how we will monitor whether institutions have met the targets in their funding agreement, and the action we will take if they do not.

Audit of funding data

27. 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 audit visits.

28. We will also use data which institutions provide to HESA or the FEFC to verify the data institutions send directly to us.

29. If we find that erroneous data have resulted in institutions receiving higher allocations than they should have done, then we will reduce their funding accordingly.

Further information

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

Annex A

Institutional mergers and changes to funding routes for further education colleges

1. This annex lists institutional mergers and changes to further education colleges’ choices of funding routes that we have incorporated since publishing our provisional recurrent funding allocations for 2000-01 in March.

2. The institutional mergers are as follows:

• University of Hull and North Riding College
• Imperial College and Wye College
• Oxford Brookes University and Westminster College, Oxford
• Canterbury Christ Church University College and the College of Guidance Studies
• The London Institute and Cordwainers College
• Westminster College (London) and Kingsway College.

3. The following FECs have chosen to be indirectly funded, either through a franchise or a consortium arrangement:

4. In addition, there have been changes to funding routes where franchise arrangements have come to an end. These are as follows:

1. The University of Hertfordshire is transferring provision that it previously franchised out to Chichester College of Arts, Science & Technology, so that it becomes directly funded. Provision that it previously franchised to Barnet College will now be franchised through Middlesex University.
2. The University of Lincolnshire and Humberside is transferring provision that it previously franchised out to Grimsby College, so that it becomes directly funded.
3. Nottingham Trent University is ending its franchise arrangements with eight FECs. Provision that it previously franchised to Grimsby College, New College Nottingham, North Lincolnshire College, the People’s College Nottingham, South Nottingham College, and West Nottinghamshire College will become directly funded. Provision that it previously franchised to Stamford College will now be franchised through Loughborough University; and provision that it previously franchised to Grantham College will now be franchised through De Montfort University.

5. Finally, we will fund the Institute of Cancer Research directly from 2000-01. We have therefore deducted its funding from that of the University of London and identified it separately.