Capital Investment Framework 2

If we passed CIF1 can we expect to pass CIF2?

We expect the majority of institutions to satisfy the requirements of CIF2, but the standard will be higher than CIF1. This reflects the progress that higher education institutions (HEIs) have made since CIF1 in 2007, the requirement for HEIs to have carbon plans, and for future capital funding to be linked to performance in reducing emissions.

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How is HEFCE taking account of the estates issues we have to address with our limited resources?

Higher education infrastructure has benefited from significant government investment over the last decade, contributing to improvements in condition and functional suitability. But government investment has accounted for less than half of aggregate investment, and higher education institutions (HEIs) have relied to a greater extent on other sources of income, such as trading surpluses, proceeds from disposals, loans and donations. The purpose of CIF is to ensure that HEIs are using a strategic approach to infrastructure planning and investment so that we and other stakeholders can have confidence that future infrastructure funds will be well spent.

It is accepted that some HEIs have significant outstanding infrastructure issues. The resolution of these is a matter for HEIs and their governing bodies. But we believe that CIF provides an objective assessment which will benefit HEIs and give confidence to stakeholders.

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Is CIF assessing past performance, current processes or future plans?

CIF is assessing all of these and using this to form a view about the institution's direction of travel.

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Is there any point in undertaking CIF given there may not be any government capital funding after March 2011?

We believe that the CIF process is light-touch, and that it has a positive effect on infrastructure management. The confidence which CIF gives to government and other funders makes the receipt of funding more likely and means it can be regulated in a way that is light-touch. Even if there is no HEFCE capital funding from April 2011, CIF could be relevant to any subsequent funding. It will allow us to reduce the level of information we require from institutions and to fund in a more flexible way.

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What is meant by the term 'infrastructure investment'?

By infrastructure investment we mean expenditure of sufficient scale that it would normally be eligible for capitalisation on the balance sheet. Infrastructure comprises items with a life of greater than 12 months and includes buildings, equipment, software development and campus infrastructure such as IT, roadways and utility services.

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Why is infrastructure considered important?

Around 20 per cent of the sector’s turnover is expenditure on infrastructure and facilities management. These are a major cost and also affect the mission of institutions at all levels. We are also required to ensure the public funds we administer bring value for money. To the extent that we can demonstrate this it gives confidence to the Government and other partner organisations.

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What is meant by a 'strategic approach to infrastructure planning and investment'?

Approaches to capital planning and investment will vary between institutions depending on their mission and management practices. But, we expect well-managed higher education institutions to show that:

• infrastructure planning is integrated within strategic and operational planning processes
• infrastructure is sufficient in terms of amount, fitness-for-purpose and condition to meet the needs of the institution
• the organisation is capable of generating an adequate income stream to cover operating, maintenance and capital costs
• the level of infrastructure investment required and planned is affordable
• capital investment plans are approved by the governing body.

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Can we assume that the people considering the submission have knowledge of the institution concerned?

Some of those considering the submission will have detailed knowledge of the institution but others will not. Submissions should therefore be stand-alone documents geared to an audience that does not have detailed knowledge of the institution.

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What level of evidence is required in submissions?

Supporting statements should be evidence-based, drawing on the metrics and including references to the dates of strategies, policy documents and surveys. The quality of the submission will be an important factor in passing CIF2.

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The narrative responses provide for up to 500 words. Do we need to write this much? Can we write more?

The emphasis is on coherent, well-evidenced submissions and the extranet will not accept supporting statements that exceed 7,992 characters (including spaces). It is therefore recommended that submissions are prepared and then pasted into the extranet.

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Strategic question 1 deals with 'Current condition and functional suitability'. In order to respond with an 'A' category higher education institutions (HEIs) must confirm that, 'A very substantial proportion of the non-residential estate is in condition categories A & B and in functional suitability categories 1 & 2.' What is meant by 'substantial'?

Category B requires institutions to have the 'majority' of their space in the top two condition and functional suitability categories. Category A is intended for institutions where there is a very high level of confidence that the institution has the physical infrastructure in terms of condition and fitness-for-purpose to deliver the institution's mission, aims and objectives.

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How do the CIF metrics take account of further education (FE) activity?

The measures of income include FE activity. But FE student numbers are not captured in the metrics relating to space, CO2 emissions or water consumption. Where institutions believe that these student numbers have a material effect on their metrics, details should be provided.

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What if we believe the 2008-09 metrics do not accurately reflect the current position?

Institutions should explain what lies behind the metrics and the reasons behind divergence from expected median or quartile values. This might be, for example, where a substantial element of the estate is earmarked for imminent disposal or demolition, or where the institution’s infrastructure differs significantly from others in the same TRAC group.

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What is TRAC and how is it being used with the metrics?

Between 1997 and 2005, the Joint Costing and Pricing Steering Group developed a costing and pricing structure for UK higher education. This is called the Transparent Approach to Costing (TRAC). Institutions have selected TRAC groups and these have been used in CIF to provide insight into estate performance. In some cases infrastructure provision and institutional mission will differ between TRAC group members, and HEIs may wish to consider this in seeking to explain the metrics.

More about the TRAC methodology

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Will HEFCE review draft submissions?

We are not offering this facility.

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Will submissions after the 8 October deadline be accepted?

Submissions after the deadline will not normally be accepted and HEIs failing to make a submission by the deadline will be considered to have failed to meet the requirements of CIF2.

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The revised institutional carbon baseline report applies gross conversion factors to energy consumption. Why is this different from the earlier guidance on producing carbon management strategies and plans?

The figures in Appendix A of the carbon management guide to good practice use net conversion factors based on the best advice at the time. More recent advice from the Department for Energy and Climate Change, Defra and SQW is that gross conversion factors should be used. These are available in Annex 1 Table 1c of '2010 Guidelines to Defra / DECC's GHG Conversion Factors for Company Reporting'. The reason for this is to align with energy consumption data and the approach used in the National Inventory and the Government’s Sustainable Operations on the Government Estate targets. Over time institutions should align their carbon plans to this approach, but we do not require this at this stage if it would cause undue effort (if, for example, plans have already been finalised.

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We are having difficulty assembling a 2005 carbon baseline. What are our options?

We apply a common baseline year so that progress by the sector and between institutions can be measured as consistently as possible. We use 2005 for reporting against UK government targets and consultation with the sector confirmed that this was a suitable baseline year.

We recognise that some higher education institutions (HEIs) did not exist in their present form in 2005 and that others have re-organised significantly since then. We commissioned a report on carbon baselines which takes account of mergers, de-mergers and transfers.

We do not consider that changes since 2005 create a need to vary the 2005 baseline approach. All HEIs will change over time and a common baseline allows aggregate change to be measured. HEIs are free, however, to set additional baseline year(s) and target(s).

Where HEIs have significant doubts over the accuracy of the data used to assemble a 2005 baseline they have several options:

• an additional baseline year/s and target/s can be incorporated within the carbon management plan
• data for 2005 can be enhanced by the institution through research or estimation
• data for an alternative year(s) can be used for the 2005 baseline (preferably this would be for an adjacent year).

Institutions should bear in mind that carbon targets and progress against them need to be reported publicly and they should seek to adopt a reasonable and transparent approach. This may include information on the nature and scale of any concerns over the accuracy of 2005 data. Institutions should also be mindful of the CIF2 requirement to demonstrate absolute or relative reductions in carbon emissions since 1990 or 2005.

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Do institutional carbon targets need to match the sector carbon targets?

This is not a requirement for individual institutions. The sector as a whole needs to meet the sector-level targets. But the progress that individual higher education institutions can achieve will differ depending on their circumstances and level of ambition. CIF2 asks for the targets so that we can form an overall picture of the sector's progress.

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Is there a pass mark?

There is not a defined pass mark. In order to be successful higher education institutions (HEIs) will need to provide a convincing, evidence-based case for category- A and-B assessments for all or most of the six strategic questions. There will be clear grounds in cases where an institution does not meet the requirements of the framework, and we will advise HEIs of these.

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Are some aspects of CIF2 more important than others?

It is unlikely that institutions will be able to satisfy CIF2 if they do not meet the requirement for a carbon management plan, and demonstrate performance in reducing emissions. We attach particular importance to this issue because of the requirements of the 2008 and 2009 HEFCE grant letters from the then Secretary of State.

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How will HEFCE use its knowledge of institutions in the assessment process?

We will use our knowledge of institutions to validate the CIF submissions, to assess the viability of infrastructure plans, and consider their fit with the mission of the institution.

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How can we have confidence in the HEFCE assessment when HEFCE now has such limited estates capability?

Although HEFCE has reduced the number of estates professionals it still has considerable experience relating to infrastructure, carbon reduction and sustainable development. We will also be drawing on the experience of senior and recently retired estates directors.

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