How the main HEFCE teaching

grant is calculated

Thom BrainFunding Round Project Manager

Purpose of this session

• Explain how the data submitted in HESES are used in the mainstream teaching funding model

• Explain how the data submitted in HESES are used in the calculations of adjustments to grant

• Opportunity to ask questions

Overview of presentation

• Mainstream teaching grant: overview of

funding method

• Funding agreements, recruitment and grant

adjustments

• Examples

• General questions

Mainstream teaching grant:

overview of funding method

Mainstream teaching grant: principles

• Similar activity is funded at similar rates, with

variations based on explicit and justifiable

reasons

• Institutions wishing to expand should apply to

HEFCE for additional student numbers

Mainstream teaching grant: key terms

• Standard resource: A notional resource level calculated by our funding model

• Assumed resource: Actual HEFCE grant + our assumption of fee income

• Tolerance band: A 5% band around standard resource

• Migration: The process by which we move institutions that were originally outside the tolerance band to within it over an agreed period of time

Students funded by mainstream HEFCE teaching grant

• Home & EC students who are: – not funded by another EC public source– on a course open to any suitably qualified

candidate– at least 0.03 FTE (approx 1 week full-time study)– on a recognised course of HE

Mainstream teaching: price groups

• A 4 (Clinical)• B 1.7 (Science, engineering &

technology)

• C 1.3 (Other high cost subjects

with a studio, laboratory or

fieldwork element)

• D 1 (All other subjects)

Mainstream teaching: student-related factors

Factor Premium

Part-time students 10%

Students on foundation 10% degrees

Long courses (45 weeks +)25%

Mainstream teaching: institutional factors

Factor Premium

Inner London 8%

Outer London 5%

Specialist institutions Variable

Small institutions Variable

Old & historic buildings Variable

Mainstream teaching: calculation of standard resource

• Calculate total weighted FTE for each

institution, using price group and student-

related weights

• Multiply total weighted FTE by base price

(standard unit price for 1 weighted FTE)

• Base price for 2006-07 is £3,721

Mainstream teaching:calculation of base price

• Calculate total mainstream resource

(including fee income) for sector

• Calculate total weighted FTE for sector

• Base price is:

Total resource

Total weighted FTE

• Base price is recalculated each year

Mainstream teaching: assumed resource

• Assumed resource = HEFCE grant + assumed fee income

• Mainstream HEFCE grant rolls forward from one year to the next, with adjustments for, for example: – Inflation– Holdback, ASN funding, transfers– Migration

• Fee assumptions per FTE for 2006-07:– FTS and PT UG £1,200– SWOUT UG £1,200– PGT subject to regulated fees £1,200– Other FT PGT £3,721

– Other PT PGT £4,093

Mainstream teaching: migration

• We express the difference between assumed resource and standard resource as a percentage of standard resource

• We want an institution’s assumed resource to be within ±5% of standard resource

• Migration through additional funding (for those below the band) or increasing student numbers (for those above it)

• Institutions are only eligible for migration funding to the extent that their position outside the tolerance band is due to changes to the funding method, rather than their own recruitment behaviour

Funding agreements,

recruitment and grant

adjustments

Funding agreements

• Three controls:

– The contract range

– Funding conditional upon delivery of growth

– The medical and dental contract FTE (CFTE)

The contract range (1)

• Applies to all institutions

• Expressed as percentage range– for example: -5% to +5%

• Refers to the percentage difference of actual (assumed) resource to standard resource– does not mean the percentages by which

institutions can vary their overall recruitment levels

The contract range (2)

• We use HESES data to:– Recalculate 2006-07 standard resource– Recalculate 2006-07 assumed fee income– Recalculate 2006-07 assumed resource

• We compare recalculated standard and assumed resource

• If new percentage difference is outside contract range, institution may be liable to holdback – For 2006-07, holdback only for those above their contract

range• Institutions also have second chance to recover

2005-06 contract range holdback if its reinstatement keeps the institution in its contract range

The contract range (3)

• Compliance with the contract range is affected by:– Overall recruitment levels– The mix of students between price groups– The mix of students between modes– The mix of students between levels

• A template is available to help institutions assess the effects of different recruitment positions

Funding conditional upon delivery of growth (1)

• Applies to institutions that are expected to increase recruitment in 2006-07 as a result of a successful bid for additional student numbers

• Expressed as FTE targets for total HEFCE-fundable student numbers

• Holdback of ASN funding if targets not met• Institutions get two chances to deliver growth

Funding conditional upon delivery of growth (2)

• Baseline FTEs

• First (lower) target: to recover ASN funding

previously deducted for not delivering sufficient

growth in 2005-06

• Second (higher) target: to avoid holdback of

2006-07 ASN funding

Funding conditional upon delivery of growth (3)

Example for Institution Z

1000

1020

1040

1060

1080

1100

2004-05 2005-06 2006-07 2007-08

FT

Es

1st chance (toavoid holdbackof bid funding)

2nd chance (torecover bidfunding)

Baseline FTEs

Academic year

Funding conditional upon delivery of growth (4)

• Baseline FTEs go up:– To reflect additional funded places delivered the

previous year– For other additional funded places awarded

outside the mainstream bidding exercises (eg for medical intakes or ITT diversification)

– For institutional transfers

• Baseline FTEs go down:– For institutional transfers

Grant adjustments

• Grant adjustment rules published in July

• Provisional grant adjustment reports issued in

December

• Institutions have opportunity to appeal in

January

• Final grant adjustment reports issued in

February