Select Committee on Science and Technology Written Evidence


Supplementary evidence from the Higher Education Funding Council for England (HEFCE)

1.  What criteria does HEFCE use to determine whether or not it is in the national interest to sustain capacity in a subject in the absence of student demand?

  The Council has long recognised that there is some HE provision which is in the national interest but which it would not be reasonable to require institutions to make within their formula-based allocations for teaching and research. We began making a non-formula funding allocate to these minority subjects in 1991; in the current academic year we have allocated £2.8 million in their support. The initiative has been reviewed on several occasions since its inception, most recently in 2004.

  We have defined minority subjects as those which are unlikely in the foreseeable future to be able to attract ratios of students to staff which can usually be sustained through formula-based funding. In practice we identify them as those subjects which both are isolated academically from other subjects and are able to enrol no more than 100 students throughout the UK.

  We maintain specific provision for minority subjects only in exceptional cases and where we judge that the national interest requires this. For this purpose the national interest is defined as:

    (a)  The needs of diplomacy: This covers the full range of UK interests, influence and commitments overseas and requires a supply of independent expertise to be available to respond to the patterns of UK interests as they vary over time.

    (b)  The needs of industry and commerce: International trade and the development of overseas markets demand knowledge of local language and culture. Again, as international trading patterns change, so do the countries and regions about which knowledge is required.

    (c)  Maintenance of academic diversity: Minority subjects contribute to the diversity of provision by HEIs and their continuation is important to maintaining the balance and breadth of discipline expertise in the UK. Minority subjects by their nature are dependent upon a very small group of experts and would quickly become in danger of disappearing if the number of new first degree entrants were allowed to decline too far. Once gone, the reintroduction of a subject would be unlikely.

  This initiative is targeted at very small and specialised provision. We recognise that some further action in support of strategic subjects could be appropriate and, following receipt in December of the Secretary of State's letter asking for advice in relation to strategic subjects, I have established a Board advisory group. This group will provide advice about criteria that might be used to determine which subjects are strategic and which vulnerable and advise on the nature of support that could appropriately be offered by the Council for such subjects. The Group will report to our Board in June, whereupon I will pass the advice of the Council to the Secretary of State.

2.  The teaching weightings assume a certain range of student numbers for each department, effectively raising the unit cost of running a small department. On what basis would you consider making greater financial provision for departments with fewer students?

  The response to question one above shows the criteria under which we have made additional funding provision available for very small teaching units.

  It is not strictly true to say that the teaching weightings assume a "certain range of student numbers for each department". As described in our written evidence to the Committee, the weightings are derived from financial information returned from institutions to HESA. The model uses average expenditure by student FTE across four weighting groups, but does not take account of the number of departments represented by those numbers of students. It is perhaps also important to restate here that the majority of teaching funding is allocated as a block grant and that HEIs are free to allocate their funding across their subject portfolio as they see fit. It is their decision whether or not to maintain small (or indeed large) departments.

  That said, we understand that small institutions often carry disproportionately high central and administrative costs. Through a review carried out in 1998 we recognised that small size can be important in offering distinctive provision to students and should be taken into account as a factor in contributing to additional costs. We therefore offer a specific premium to these institutions, which are defined as those having less than 1,000 full-time equivalent students. The premium is set at a level which does not perpetuate inefficiency or discourage collaboration.

3.  What progress has been made with the pilot scheme using TRAC methodology to calculate the costs of running a course?

  We have recently let a project to a joint consultancy to look into the use of cost-based approaches to funding in order to inform the ongoing review of our teaching funding method. The review will include the consideration of TRAC as a possible methodology to draw on. We are happy to share the full tender specification with the Committee if this would be helpful. In brief we have asked consultants to:

    (a)  Outline the general policy arguments for and against utilising a cost-based approach (as distinct from an expenditure based approach) to inform a teaching funding method.

    (b)  Consider to what extent a cost-based approach can and should be used by HEFCE to;

    (i)  identify and reflect the actual cost of those features of HE provision that may warrant differential funding in its funding method, including but not restricted to "subject", "mode", and "level" and including concepts of "investment modelling".

    (ii)  identify the overall cost of sustainable teaching across the higher education system which at least maintains current teaching quality and academic standards.

    (iii)  identify the overall cost of sustainable teaching in an individual institution which at least maintains current teaching quality and academic standards.

    (c)  Consider the practical requirements and implications of any proposed uses of a cost-based approach that address i-iii above.

  The final report will be submitted to HEFCE officers by the end of June 2005.

4.  What measures do you use to measure the adequacy of undergraduate science provision at a regional level?

  The Board advisory group will consider the provision of science at a regional level as one aspect of the advice that we will give to the Secretary of State in June.

  We are proactive in building relationships in the regions. As a national funding body HEFCE believes it must work with others when considering the adequacy of regional provision. (We would also remind the Committee that we do not have planning powers in this respect). Over the last year we have worked with a range of stakeholders to establish the priorities for investment in HE in the regions, and this has included looking at the available data on levels of provision and discussing them at a number of seminars held across the country. More details of these discussions can be found at In addition, where significant closures are signalled, we hold discussions with the relevant RDA to establish their view on the need for that provision and their willingness to invest.

  Moreover, we maintain close and regular contacts with all institutions and are often able to support them in decisions about subjects. For example, we were able to assist in the transfer of physics provision from Birkbeck to UCL, University of East Anglia to Bath and from the University of Essex to York. Whilst these transfers, often decided on the basis of research interests, are inter-regional we considered that assistance was important in order to safe-guard the health of the subject nationally. We are currently helping to retain Chemistry provision in the South West region by offering further places to Bristol and Bath following the closure of Exeter's Chemistry Department.

  I hope that you find this response useful, please do not hesitate to request further information or clarification.

March 2005

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