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As part of its work to collect evidence about postgraduate education, including the potential impact of the reforms to undergraduate finance, HEFCE appointed the consultants KPMG to see whether the costs of teaching for postgraduate taught (PGT) courses could be clearly disaggregated from undergraduate teaching costs. In the first phase, working with a small group of higher education institutions in a pilot exercise, KPMG tested different methods of identifying PGT costs and concluded that the time allocation method used in the transparent approach to costing for teaching (TRAC(T)) would remain the best approach. In the second phase, KPMG collected, validated and analysed cost data from a sample group of 22 institutions.

Based on this small sample, the study found that the cost of PGT courses was in general higher than undergraduate teaching. The most significant factors impacting on the cost of postgraduate teaching appear to be:

  • The number of students in a cost centre – there are significant economies of scale in teaching postgraduates.
  • The cost of staff teaching and support costs – the staff cost of PGT is more than twice the staff cost at undergraduate level.
  • The cost of delivering postgraduate teaching at specialist postgraduate institutions is lower than at institutions providing both undergraduate and postgraduate courses.
  • Laboratory-intensive PGT courses are generally more expensive than classroom-based subjects.
  • There are economies of scale that come from having large numbers of overseas students on PGT courses.

We are committed to further work to validate and expand upon these preliminary findings.