Review of TRAC (Transparent Approach to Costing)

We are reviewing the way universities and higher education (HE) colleges report the costs of their activities. After much initial work we launched a consultation to gain wider input from the HE sector and beyond. Our proposals aim to provide greater transparency for students and taxpayers, and reduce the administrative burden of providing the information.

An independent report by KPMG gathered evidence about the existing arrangements for TRAC, and looked for opportunities to improve the system for its users. We used this to inform the consultation’s proposals.

The consultation ran until 11 January 2013. We are now considering our proposals in light of feedback through the consultation.

What are we asking?

Our questions and proposals address the following four themes:

The needs of stakeholders, now and in the future
The evidence from KPMG’s work shows that TRAC provides consistent and comparable information that meets the needs of institutions and funders. We could not identify a better alternative and the evidence shows widespread support for the continued use of TRAC. For this and other reasons we are not proposing an alternative to TRAC.

The burdens and benefits of TRAC as a costing system for the HE sector
The review identified that TRAC is widely used in institutions - two-thirds use TRAC data to provide management information or to inform decision-making. But we are interested to know why it is not more widely used. We invited institutions to suggest alternative approaches to costing that they use and which would provide consistent and comparable information, or ways to improve TRAC.

Opportunities to improve and streamline TRAC and the associated reporting requirements, and to secure better use of TRAC information
We set out specific areas where the TRAC requirements could be revised and sought views on these suggestions. These include:
- increase the threshold for dispensation so that more institutions with low levels of publicly funded research need not address certain TRAC requirements
- refine the time allocation processes to reduce burden and improve confidence in its quality and use
- harmonise the collection of all TRAC data in a single return, with a single sign-off process within HEFCE’s accountability framework
- other changes that may enhance TRAC as a management information tool for institutions.

Providing greater transparency for taxpayers, students and prospective students
We present options for how the HE sector can demonstrate greater transparency about the way it spends public funding. This could provide information for taxpayers and students about how institutions spend their income to deliver high-quality higher education and support the student experience.

Events

As part of the consultation process, we held two half-day consultation events to introduce the consultation document.

Further details and presentations from the events

TRAC Review Group

The TRAC Review Group has advised us in the course of this review. The group is chaired by an independent HEFCE Board Member.

Other members are drawn from across key stakeholder groups.

HEFCE review of TRAC

The 2011 higher education White Paper asked HEFCE to consult with the sector on a proposed streamlining of the Transparent Approach to Costing (TRAC) reporting process. A small review group is meeting to consider the scope and content of the consultation. Details are available to download below.

HEFCE Review of TRAC: terms of reference and scope

Download the HEFCE review of TRAC as PDF (93 KB)

Research reports

To support the work on the review, KPMG gathered evidence from across the range of groups and individuals with an interest in TRAC to provide analysis of the current TRAC arrangements and identify opportunities for improvements.

The report ‘Review of the Transparent Approach to Costing: A report by KPMG for HEFCE’ (October 2012) is published alongside this consultation.

The review has also drawn heavily on the evidence in ‘Review of time allocation methods: A study for the TRAC Development Group’ (July 2012).

Review of time allocation methods

The TRAC Development Group has led a review into time allocation methods across the sector. The report provides further insights and practical suggestions to assist institutions in enhancing their management information in this area in addition to improving the data that informs the TRAC process.