2 The Funding Council's role in improving
retention
7. The Department for Innovation, Universities and
Skills has overall responsibility for public spending in higher
education in England. It delegates day-to-day responsibility for
managing the sector to the Funding Council. The Funding Council
promotes and funds teaching and some research to help the sector
meet the diverse needs of students, the economy and society. It
works with universities to encourage the sector to achieve the
Government's strategic objectives, primarily through funding incentives.
In 2006-07 the Funding Council granted £6.7 billion
to universities, including £4.2 billion for the teaching
of higher education courses, with most of the balance allocated
for research and capital expenditure. Universities are autonomous
bodies, legally independent of government.[15]
8. The Funding Council uses a 'light touch' approach
at the behest of the Government and operates at arm's length from
individual universities.[16]
The Funding Council has a number of instruments to influence
universities' behaviour, the most important of which are a funding
distribution that is based on expected student numbers, the publication
of a range of performance data and the promotion of good practice.[17]
9. A light touch is appropriate providing there are
no warning signs about universities' performance on retention
as well as other issues. There is, however, room for improvement
in the Funding Council's oversight of poorer performing universities.[18]
The Funding Council has a risk-based approach to the sector, only
intervening when it believes there may be a problem.[19]
Between 2001-02 and 2004-05, around one in four universities suffered
a decline in its retention of first-year, full-time students.[20]
10. The Funding Council's way of allocating teaching
funding to universities is based on the number of students a university
aims to teach, rather than to retention performance directly.[21]
Each university agrees with the Funding Council the number of
students that will complete the particular year of study. If a
university falls sufficiently short of that number, either because
of a shortfall in recruitment or a lower than expected rate of
retention, some of its teaching funding will be held back. In
2003-04, the Funding Council held back funding from 12 universities
because of issues with student numbers. In the following year
only seven improved their retention performance.[22]
11. In 2003-04, the Funding Council altered its allocation
method for teaching funding. Part of the sector's teaching grant
was redistributed between universities to reflect the numbers
of 'non-traditional' students they recruited. These students often
require more support in order to complete their higher education.
In 2006-07, the Funding Council allocated £240 million
to universities in this way, part of £800 million over five
years.[23] Universities
have considerable freedom in how they distribute this funding
and, to minimise the burden of regulation, audit and reporting
on universities, the Funding Council does not require them to
report on how they spend their retention allocation, though some
universities do keep detailed records. The Funding Council is
currently reviewing how it distributes its widening participation
and retention allocations, and what reporting requirement should
be made of universities on that expenditure.[24]
12. The Funding Council has regional teams who provide
advice and support to universities on a range of issues, including
retention. Where a university's performance gives rise to concern,
the regional team will make contact with the university. A significant
increase in withdrawal rates in an individual university should
cause the regional team to target that university to swiftly identify
the issues.[25]
13. The Funding Council funds several organisations
that conduct research into improving teaching and support practices,
and share the results with the sector. The work of these bodies
mainly covers teaching and learning issues, which can have implications
for retention, but they also cover retention specifically. For
example, in 2005-06 the Funding Council granted the Higher Education
Academy around £17 million for a range of work to enhance
pedagogy and raise the quality of teaching across the sector,
though only a proportion of this money was spent directly on the
issue of retention. There continues to be a wide range in the
performance of universities on retention, so it is not clear whether
these organisations are succeeding in spreading good practice
and improving performance on retention.[26]
14. The Higher Education Statistics Agency publishes
annual performance indicators, including on retention, for individual
universities. The indicators are intended to provide reliable
and comparable information for a range of users, including prospective
students, universities and the Funding Council. The publication
of performance indicators provides an incentive for universities
to perform well, and can affect universities' reputations and
numbers of student applications.[27]
The indicators are based on the proportion of the previous year's
intake that re-enrolled for study in the subsequent year.[28]
15 C&AG's Report, paras 2.2-2.3 Back
16
Q 16 Back
17
C&AG's Report, Part 2 Back
18
Qq 17-18 Back
19
Qq 30, 42 Back
20
C&AG's Report, para 1.14 Back
21
Qq 26-27 Back
22
C&AG's Report, paras 2.5, 2.8 Back
23
Q 42; C&AG's Report, paras 2.9-2.10 Back
24
Q 30; C&AG's Report, paras 2.4, 2.12 Back
25
Qq 118-120; C&AG's Report, para 2.13 Back
26
Qq 7-9, 98-103; C&AG's Report, para 2.20 Back
27
Q 16; C&AG's Report, paras 2.13-2.14 Back
28
Qq 122-124; C&AG's Report, page 5 Back
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