Select Committee on Innovation, Universities and Skills Written Evidence

Memorandum 96

Submission from the Thames Valley University


  1.1  The ELQ policy puts at risk the progress of Lifelong Learning in professional skills.

  1.2  The way that HEFCE propose to implement the ELQ policy means that even if institutions act quickly and decisively to shift provision from ELQ students to non-ELQ students, their mainstream teaching funding will still be cut for 2008-09.

  1.3  The exemptions proposed by HEFCE are welcome but there are areas of provision valuable to the UK economy that are not covered by the exemptions.

  1.4  Students with and without ELQs will be affected because some areas of provision will become unsustainable.

  1.5  A cash-terms safety net is better than no safety net but it means a real-terms funding decrease. Mainstream teaching grant forms a significant percentage of the total income for teaching-focused institutions like TVU and a real-terms decrease in funding will be problematic when costs continue to rise.


  2.1  Thames Valley University (TVU) is one of the UK's largest and most diverse Universities with more than 33,750 students from 117 countries.

  2.2  Achieving university status in 1992, TVU has over 140 years experience in delivering technical and vocational education. TVU merged with Reading College and School of Arts and Design in 2004 to form one of the largest institutions of its type in Europe.

  2.3  The University is based on four campuses: Ealing and Brentford in west London and at Reading and Slough in Berkshire. The University offers a wide range of vocational and academic courses for students aged between 14 to 84 years old and delivers Further, Higher and postgraduate education programmes as well as professional and short courses. The University is the largest provider of education in Hospitality, Healthcare and Music & related disciplines in the UK.


3.   Arguments against the Government's decision to phase out support to institutions for students studying ELQs

  3.1  The contradiction of the ELQ proposals with the wider Lifelong Learning agenda is clear. Up-skilling and re-skilling in professional areas will fall foul of the ELQ policy even though it is in the interest of the UK economy.

  3.2  Co-funding by employers is not always the answer: there are known issues in the creative industries where employers are often very small businesses. In addition, across all sectors individuals will sometimes wish to re-skill without the knowledge of, or financial input from, their current employer.

4.   The timing of the decision and of the implementation of the change

  4.1  The Secretary of State said in a speech to the Open University on 13 December 2007, "Assuming that OU students continue to study part-time at about the same intensity as now, it [the OU] will be able to recoup what it might lose, and more, by attracting another 3,000 or so first-time students in each of the next three years." This is not the case. HEFCE's proposed implementation does not make ELQ students unfunded but allow institutions to retain their teaching grant (T grant) by recruiting alternative fundable (non-ELQ) students. Instead it pulls from institutions funding related to ELQ students assumed to be studying at institutions (based on 2005-06 data). HEFCE is proposing to use historic data in order to ensure that institutional behaviour cannot affect HEFCE's ability to save the £100m requested by DIUS. However the flip side of this is that institutions cannot protect their funding even if they act in accordance with the incentives DIUS want to encourage.

  4.2  To give an extreme example, if TVU did not recruit a single new ELQ student in 2008-09 but instead recruited a balancing number of non-ELQ and/or Foundation Degree students, TVU would still be subject to a cash terms T grant funding freeze (ie a real terms decrease) for 2008-09 because our T grant will be adjusted in relation to the ELQs for 2005-06 (as in the HEFCE modelling). The only way that TVU could regain funding for student FTEs is via new Additional Student Numbers (ASNs) from HEFCE—and it is not realistic to suggest that we can apply for and receive the significant numbers of ASNs required in that timeframe, even if HEFCE were to make the ASNs available.

5.   The exemptions from the withdrawal of funding proposed by HEFCE

5.1  Foundation degrees

  5.1.1  We support the objective of providing a mechanism by which students can continue to access public funding to support them in studying for a qualification which may assist them to acquire skills required by employers and thus welcome the exemption for Foundation Degrees. However there are other well-established qualifications of a professional nature which are not being exempted although they are acknowledged to meet employers' skills requirements (eg qualifications in Accountancy, Purchasing and Supply and Project Management). The removal of funding for the substantial numbers of students on these courses may make them non-viable, putting at risk whole areas of taught provision. Those areas of taught provision are ones which are important not only for the students actually on professional qualifications but also for students on other types of course who may access these subject areas for smaller parts of their course. Learning experiences in business-related skills for such students can make a real difference to their employability.

  5.1.2  Furthermore, there are often instances in which the qualifications that currently meet employers' skills requirements are less substantial than a foundation degree. These qualifications will not be exempt from the ELQ policy, setting up a potential perverse incentive for students to be driven towards courses which are longer (and thus more expensive in terms of HEFCE funding) than they need.

  5.1.3  A foundation degree is not always going to be the best way of providing students with new skills, particularly in the enterprise/entrepreneurship areas. In these and other areas smaller units of learning (which might combine over time into a larger qualification) are more accessible both in terms of time and money for individuals developing their own SMEs or developing skills which may be required not by their current employer but for a future career move.

5.2  Co-funded ASNs

  5.2.1  We support the objective of providing a mechanism by which students can continue to access public funding to support them in studying for a qualification which may assist them to acquire skills required by employers and thus welcome the exemption of co-funded ASNs. However we do not welcome the fact that institutions will essentially have to re-bid, through a bureaucratic process, for funding they were previously entitled to; and that furthermore, that funding will be then considerably less flexible than it has been before, because co-funded ASN allocations are outside the teaching grant contract range.

5.3  Strategically important and vulnerable subjects (SIVS)

  5.3.1  We support the exemption of SIVS from the ELQ policy but do not agree with the proposal to do this via a targeted allocation outside the tolerance band. This will only protect historical levels of provision in these subject areas rather than support any expanded provision, even though expanded provision may be in the public interest.

  5.3.2  An institution that was active in a SIVS area in 2005-06 but is not in future will receive an allocation, while an institution that was not, but now is, would not. The proposal to push funding through a separate static allocation will mean that institutions, particularly in growing areas, will need to charge higher fees to all ELQ students (as no specific students would be fundable). This would potentially disincentivise students from joining courses in SIVS areas of study.

6.   The impact upon students

  6.1  There will clearly be a financial impact upon students with ELQs in all instances where institutions decide to charge higher fees for ELQ students (in order to maintain resource levels).

  6.2  Where programmes cater particularly to ELQ students—examples for TVU include professional qualifications in Accountancy, Purchasing and Supply and Project Management—then it is likely that some programmes will become unviable. Institutions will have little choice but to cease to offer these programmes, affecting non-ELQ students as well.

  6.3  Where institutions charge higher fees to students who are not fundable because of their previous qualifications, it is apparent that there will be a disincentive for potential students to declare their prior qualifications. This will reduce the ability of institutions to respond as appropriately as they would wish to the prior knowledge and experience of their students, meaning the student experience will not be as positive as it might otherwise be.

7.   The impact of the change upon institutions

  7.1  Much has been made of the fact that in HEFCE's proposals institutions are protected by a cash-terms safety net. However a cash-terms safety net is scant protection for an institution like Thames Valley University, the mission of which is strongly teaching-focused and whose income is therefore more concentrated (and smaller) than that of the research-intensive institutions. In 2006-07 HEFCE's mainstream teaching grant (not including WP funding) formed 27% of our TVU's total income and 42% of TVU's non-LSC or NHS income. To have this funding stream entirely frozen in cash terms when our costs are not frozen will have significant effects on the institution's sustainability.

  7.2  While a safety net is clearly preferable to no safety net, a real terms decrease in funding which will begin in less than one year's time and continue across the planning horizon will place some institutions in positions of substantial financial risk. It is now January 2008 and we are still not sure if our budget the year starting on 1 August 2008 will be cut (in real terms) or not: the implementation of this decision has been too hurried to allow institutions to plan effectively for managing the impact of the funding implications.

  7.3  We are particularly concerned about the impact of a real terms decrease in funding for 2008-09. A planned decrease in 2009-10 but not 2008-09 would give those institutions which are hardest hit a little more time to develop plans both in terms of assuring additional fee income from ELQ students, and in terms of changing the nature of provision offered to target students who remain HEFCE-fundable. A real terms funding cut for 2008-09 will be very difficult to manage without a significant impact on the student experience, and this will be most keenly felt in those institutions which are doing most to reach out to those who need to be drawn into HE both to meet the Government's 50% participation target and the wider Leitch agenda.

  7.4  The institutions most heavily affected (including TVU) are those who have made great efforts to reach out to employers and to employees by providing flexible (part-time) and professionally-orientated provision. These same institutions are those who have fewer other major sources of income (especially research funding) with which to sustain themselves over a difficult period of transition.

January 2008

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