Select Committee on Public Accounts Minutes of Evidence


MEMORANDUM FROM THE HIGHER EDUCATION FUNDING COUNCIL FOR ENGLAND(PAC 97-98/146)

The Changing Role of the Council in Relation to the Higher Education Estate

1.  This memorandum has been prepared in advance of the Committee of Public Accounts hearing on The Management of Building Projects at English Higher Education Institutions. It explains the Council's role in relation to the higher education estate. We welcome the National Audit Office's report for the assurance it gives that building projects within higher education are broadly delivered on time and within budget. We also welcome suggestions for improving this important area of activity.

Changes in Higher Education

2.  Over recent years, higher education has achieved substantial increases in student numbers:


Student numbers (1000 FTEs)

with large decreases in the unit of resource for each student:


Unit of resource index (1992-93=100)

3.  This improved value for money has been mirrored in the better use of the higher education estate, with a greater than 15 per cent improvement in usage in five years (13.6 m2 per student in 1992 and 12.4 m2 per student in 1997).

THE COUNCIL'S ROLE

4.  Today the Council allocates the greater majority of its funds with no distinction between capital and recurrent grants. Responsibility for maintaining and developing higher education estates rests with universities and colleges themselves. They estimate that £4.2 billion expenditure on the estate is needed.

5.  The Council sets aside £70 million a year for capital projects (on a 50 per cent funding basis). This limited sum is targeted through a competitive bidding exercise at those institutions that have a poor estate or need support in refurbishing research laboratories. The Council also develops good practice guidance on capital procurement (with the Committee of Vice-Chancellors and Principals), space charging and investment appraisal. It is sponsoring a comprehensive study into estates management statistics, which will improve comparative performance benchmarking.

6.  The Funding Council's role in relation to the higher education estate has changed substantially over time. During the expansion of the 1960s and 1970s, its predecesssor, the University Grants Committee (UGC), provided 100 per cent of funds for any approved building. During this period the UGC had a close involvement in the plans and construction of university buildings. It issued extensive instructions and regulations on allowable costs and procedures and closely monitored developments. The price was a reduced sense of responsibility among individual universities.

7.  Increasing autonomy for institutions accompanied the abolition in 1992 of the binary line between the older universities and polytechnics and colleges, the rapid growth in student numbers and the introduction of more private finance. HEFCE has developed a framework of monitoring and advice, which has encouraged institutions to manage their affairs effectively and develop more professional estate management. Shared project funding, whereby institutions contributed between 50 per cent and 75 per cent of the cost of any project, has encouraged them to actively pursue savings.

8.  A major step forward was the publication in 1992 of the Council's report Capital Funding and Estate Management in Higher Education. This provided the framework for the development of the estate function within the sector. The Council now expects each institution to develop and maintain an estate strategy which forms the basis for institutions and the Council to assess progress.

9.  Reviews of estates management and controls are part of the Council's three-year cycle of regular audit visits. The Council also conducts value for money studies related to estates and disseminates good practice and advice. It plans to make the extensive body of guidance that has been produced readily available to all institutions via the internet. This and other work is carried out with the active involvement of institutions, enabling us to build on the achievement and improved value for money that the institutions and colleges have already delivered.

Higher Education Funding Council for England

6 February 1998


 
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