Employer engagement - allocation of funding

Dear Vice-Chancellor or Principal

1.   This letter provides an update on the allocation of capacity development and provision funding to support workforce development activities with employers.

2.   Following the Leitch Review of Skills¹, and the Government's 2008 grant letter to HEFCE², the higher education (HE) sector has responded very positively to the skills agenda. With the agreement of the HEFCE Board we brought together a total Employer Engagement Fund package of up to £148 million over three years, of which up to £103 million was available for capacity building funding. This has enabled us to support a range of projects that will:

• develop the capacity of institutions in working with diverse employers
• provide learning programmes for employees, many of whom will not have previously experienced HE
• increase the resources for higher education through cash and in-kind contributions from employers.

3.   Collectively the projects will help us achieve the objectives of our employer engagement programme and deliver the targets the Government has set for growth in provision co-funded by employers.

4.   Following the publication of Circular letter 03/2007 'Allocation of additional student numbers in 2008-09 for employer engagement', we have encouraged institutions to come forward with proposals to transform their capacity to respond to employers' higher-level skills needs and significantly grow provision co-funded by employers.

5.   We have now contracted with HE providers to deliver over 10,000 new employer co-funded places for the 2008-09 academic year. This puts us in a good position to achieve our target of 5,000 employer co-funded entrants in 2008-09. We have also committed co-funded provision to the end of 2010-11, and expect those institutions currently contracted will collectively meet the targets across the Comprehensive Spending Review period. We will review progress annually following the end-of-year monitoring to ensure we are on track to achieve the targets.

6.   We are in discussions with a number of institutions to finalise the bids for the remaining available capacity funding. When we have committed the available funds to the projects we can support, we will be funding some 45 employer engagement projects, involving well over a third of all institutions in the HE sector. This is an excellent outcome, further demonstrating the commitment and enthusiasm of the HE sector to supporting business and the economy of this country. I think that we have, as a sector, been able to demonstrate a substantial enthusiasm for and commitment to engaging with employers on high-level workforce skills in a manner wholly consistent with the best principles of HE. This was very effectively demonstrated in the publication of 'Stepping Higher' by the CBI in October 2008, sponsored by HEFCE and Universities UK³.

7.   The challenge now is for the institutions taking forward employer engagement projects to deliver on their innovative and ambitious plans and to secure the best possible levels of growth and market share, albeit in tough economic conditions. We shall keep in close touch with the projects and ensure that the lessons learned are made available to all across the HE sector.

8.   I would like to thank all institutions and organisations that have considered the ways in which they can make a greater contribution towards supporting the workforce development requirements of employers and the needs of employees. We have not been able to support all proposals, and have had to make difficult decisions about which projects we believe will provide greatest value and help us to achieve our objectives.

9.   For those awaiting a response to an expression of interest or a full bid to the Employer Engagement Fund, a representative of HEFCE will be in touch to discuss what this means in specific terms in the case of the bid from your institution or organisation. In addition, if you wish to follow up with a member of our senior team please contact:

• Hugh Tollyfield (Employer Engagement - programme and policy issues)
• Yvonne Hawkins (Associate Director, Midlands and South)
• Christopher Millward (Associate Director, North)
• David Noyce (Associate Director, London and East)

10.   We do not foresee that there will be any additional funding available either for capacity building or provision, over the £148 million currently committed, during this Spending Review period.

11.   We have refreshed our web pages for employer engagement. Details of our employer engagement programme, including summaries of the projects funded to date can be viewed on the HEFCE web-site.

Yours sincerely

Professor David Eastwood
Chief Executive

Notes

1. 'Prosperity for all in a global economy: world-class skills' (2006), Sandy Leitch's review of the UK's long-term skills needs.
2. Grant letters can be read on the HEFCE web-site.
3. 'Stepping Higher: Workforce development through employer-higher education partnership' can be read on the HEFCE web-site.