Report 01/33

Holdback of HEFCE grant 2001-02

Executive summary (read on-line)

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Executive summary

Purpose

1. We have a funding agreement with each institution that we fund, which specifies the targets relating to student numbers that we expect it to meet. This document explains what action we will take if institutions do not meet their targets for 2001-02.

Key points

2. There are five constraints on recruitment within the funding agreements, as they will apply for 2001-02, although not all apply to every institution. They are:

1. The contract range. Under our funding method for teaching, we calculate a standard level of resource for each institution, and an assumed resource (actual HEFCE teaching grant plus an estimate of income from fees). The percentage difference between assumed and standard resource for the academic year 2001-02 must be within a given range - known as the contract range.
2. The maximum student number (MaSN). This is an upper limit for the student numbers on full-time undergraduate courses, other than those fundable by the NHS, plus any other students on initial teacher training courses.
3. Funding conditional upon delivery of growth. This only applies to institutions that are expected to increase student numbers in 2001-02 as a result of a successful bid for additional funded places. Funding for those places is contingent upon institutions actually recruiting students to fill the places.
4. The foundation and sub-degree target. This only applies to institutions that have been funded for additional places on foundation degrees or courses below degree level for 2001-02. Its purpose is to ensure sufficient increases in total student numbers on such courses, as planned by the Government.
5. The contract full-time equivalent (CFTE) number for students on undergraduate medical and dental courses to which a quota applies, setting minimum numbers.

3. These measures are designed:

1. To ensure that public expenditure on higher education remains within the overall spending limits set by the Government each year.
2. To maintain broadly comparable resource levels per student so that the quality of the student experience is not put at risk.
3. To ensure that funds allocated for expansion do indeed deliver additional places and, within that, to encourage the expansion of higher education below degree level.
4. To ensure that the intended number of medical and dental students required to meet national needs is delivered in return for the exceptionally high level of funding provided for such students.

4. To achieve these objectives we will withhold grant from an institution which:

1. Is found to have a level of assumed resource above its contract range.
2. Recruits more than a permitted margin above its MaSN. For 2001-02, that margin is 4 per cent.
3. Does not deliver the growth expected in 2001-02 arising from a bid for additional funded places.
4. Under-recruits against its CFTEs for medicine and dentistry.

5. Where an institution is found to be below its contract range, we will want to discuss the reasons with the institution, and to receive an action plan setting out how the institution will ensure it comes within the range in 2002-03. We expect that institutions will then take the necessary action to bring numbers into line with their targets.

6. In relation to paragraphs 4 and 5, before taking any action, we will give institutions an opportunity to tell us about any material changes in definitions or mitigating factors.

Action required

7. No response is required.