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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