Dear Vice-Chancellor or Principal
1. This letter outlines the arrangements for higher education institutions (HEIs) to make submissions for assessment under the second Capital Investment Framework (CIF2).
2. In December 2009 we issued 'Capital Investment Framework – Consultation on the assessment process' (HEFCE 2009/48). Responses to the consultation showed broad support for our proposals. A detailed analysis of the consultation responses and how these have been taken into account in the final version of CIF2 will be published shortly.
3. The original Capital Investment Framework (CIF1) was designed to encourage a strategic approach to infrastructure planning and capital investment while reducing the burden of regulation. The strategic questions and self-assessment categories have been updated, but still seek assurance that HEIs' approaches are an integral part of their strategic and operational planning and that the focus and levels of investment are sufficient to maintain infrastructure in a fit state now and in the future.
4. We believe that many institutions will be able to demonstrate that they meet the requirements of CIF2, providing us with confidence in their governance and management. This in turn will enable us to continue to provide any future capital funding in a flexible manner.
5. Completed submissions (see sample form at Annex A) should be approved by the head of the institution and submitted using the HEFCE extranet by Friday 8 October 2010. Separate guidance for accessing the system will be sent. HEIs will be advised whether they have satisfied the requirements of the framework in January 2011.
6. The provision of capital funding from April 2011 will depend on the forthcoming spending review. In the meantime HEIs are encouraged to continue to plan their capital investment, taking account of the challenging economic climate.
Capital planning and investment
7. Institutions must provide evidence that their capital investment plans:
- are an integral part of strategic and operational planning processes, supportive of academic and wider institutional objectives, and adaptive as objectives change
- identify and sustain the necessary level of capital investment to maintain physical infrastructure in a fit state now and in the future
- are environmentally sustainable.
8. Additionally there are two new areas that need to be addressed:
- Reducing carbon emissions. In the 2008 and January 2009 grant letters to HEFCE the then Secretary of State set out the need for HEIs to contribute to the Government's targets for a reduction in carbon emissions and for future capital funding to be linked to this.
- Improving space usage. There is an opportunity to improve space usage in HEIs, as identified in 'Performance in higher education estates: EMS annual report 2008' (HEFCE 2009/28) and 'Performance in higher education estates: EMS annual report 2009' (HEFCE 2010/04)See note 1.
The assessment process
9. The assessment process will be managed by HEFCE's capital and projects team, with input from those at HEFCE who have responsibility for estates, sustainable development, assurance and institutional liaison. An external panel of estates advisors with sector experience will contribute to the assessments.
10. In line with CIF1, the assessment includes four strands, three of which are covered in the submission form (shown for information at Annex A):
- Institutions must respond to the six strategic questions in section A of the submission form. The categories A-D reflect different levels of progress in the development of good practice in each area. HEIs are asked to identify which categories best match their level of progress and to provide a supporting statement for each. The form includes guidance on the types of supporting evidence that we expect to receive.
- A range of metrics will be used as part of our assessment. These are shown at Annex B and are accessible via the HEFCE extranet. HEIs should use these metrics to provide context for their responses to the strategic questions and comment on or validate the metrics as appropriate in section B of the submission form.
- Institutions must produce an action plan to address the key outcomes from a self-assessment of estates management capability. Institutions may undertake the self-assessment in the manner which they consider best meets their needs. One approach would be to use the tool developed by the Association of University Directors of Estates to self-assess estate management capability: it is available at www.audesat.org.uk.
- We will also draw on other information that is provided to HEFCE as part of existing data collection or reporting processes.
11. Taking these four strands together will enable us to form an overall assessment of whether an HEI is adopting a strategic approach to infrastructure planning and capital investment.
12. To improve transparency and validate the process, we are establishing a panel to review all assessments that do not yet satisfy the requirements of the framework, and a sample of other assessments. The review panel will be drawn from those involved at strategic levels across the higher education sector. A sample of HEIs' submissions may be audited.
13. Institutions should submit their responses to the questions, the metrics commentary and confirmation of the action plan following self-assessment, via the HEFCE extranet by Friday 8 October 2010. This is later than previously indicated as it has taken longer to finalise CIF2 and to allow HEIs more time to complete their submissions. We intend to work with sector bodies over the summer to provide further guidance to HEIs on the level and form of supporting evidence we are seeking as part of the submissions.
14. The submission form and metrics can be accessed using the HEFCE extranet, and are shown at annexes A and B, respectively, for information.
15. A letter will be sent to the head of each institution in January 2011 advising whether the requirements of the Capital Investment Framework have been satisfied.
16. A timetable of the process is as follows:
|19 July 2010 – 8 October 2010||CIF2 submission system open|
|8 October 2010||All submissions to be complete|
|11 October 2010 – 5 November 2010||Internal assessment process which will include input from an external panel of estates advisors|
|8 November 2010 – 26 November 2010||Internal assessment process by HEFCE institutional teams|
|Week commencing 29 November 2010||Internal quality assurance panel – Ian Lewis, Andrew Smith, William Dent|
|Week commencing 13 December 2010||External panel review|
|January 2011||HEIs advised whether they have met the requirements of CIF2|
17. As indicated in paragraph 6, capital funding from April 2011 depends on the outcome of the forthcoming spending review. No assumptions on future capital funding can be made at this stage.
18. However, the HEFCE Board agreed in November 2009 that it would take account of the outcomes of the CIF2 assessments in distributing any capital funding through the Capital Investment Fund.
19. The arrangements will be:
|CIF compliance position||Funding implications|
|HEIs that comply with CIF1 and CIF2 by 1 April 2011||100% of funding is provided|
|HEIs that comply with CIF1, but not CIF2, by 1 April 2011, but resubmit CIF2 successfully by 31 March 2012||100% of funding is provided|
|HEIs that comply with CIF1, but not CIF2, by 1 April 2011, but do not resubmit CIF2 successfully by 31 March 2012 *||60% of funding is provided. Proportion of 40% that relates to 2011-12 is lost. Remainder of 40% funding will be lost proportionately from 1 April 2012 to the point when a successful resubmission is made|
|HEIs that do not comply with either CIF1 or CIF2 by 1 April 2011, but resubmit successfully before CIF2 ends *||60% of funding is provided. Remaining 40% will be lost proportionately from 1 April 2011 to the point when a successful resubmission is made|
|HEIs that do not comply with CIF1 and do not comply with CIF2 before CIF2 ends||60% of funding is provided. Balance of 40% funding is lost|
20. All payments to HEIs will be on a profile basis set by HEFCE.
21. Further details will be provided when funding from April 2011 is announced and the HEFCE Board has considered how those funds should be distributed.
22. We will review the metrics annually to ensure that capital investment continues to be at a level to secure long-term sustainability and is in excess of the level of grant funding. We will provide feedback on the metrics annually.
23. Where metrics – or other relevant knowledge about an HEI – indicate cause for concern, those issues will be raised with the HEI. The outcome of those discussions may resolve those concerns or lead to a re-assessment of the basis for capital funding.
24. We expect HEIs to revisit their estate management capability self-assessments at regular intervals, and to implement any actions that arise from that process.
25. I would like to take this opportunity to thank the steering group who have worked with us on the further development of the framework.
- All HEFCE publications are available at www.hefce.ac.uk under Publications.