Students and Universities - Innovation, Universities, Science and Skills Committee Contents

Memorandum 117

Supplementary memorandum submitted by the Higher Education Funding Council for England (HEFCE)



  HEFCE allocated 9,953 ASNs for 2009-10, of which 4,805 were full time and 5,148 part time. The full time figure of 4,805 includes an estimate of 3,000 additional first year entrants. The balance will accommodate second or subsequent cohorts to new or expanded courses that we have supported in earlier years. For example, if an institution is supported to develop a new three-year degree course, we would expect an increase in new entrants in the first year. If entrant levels are to be maintained, the institution is likely to need additional places in years two and three to support subsequent cohorts until student numbers across all three years of study reach a steady state.

Policy and Priorities

As you will know, the Government determines the number of places that can be allocated by HEFCE on a year by year basis and confirms this number in the grant letter. As part of our advice to the Government for the Spending Reviews, we provide intelligence on student demand and the needs of the sector in specific priority areas. However it is for the Government to decide what is affordable, taking account of student support costs. The cost of student support is of course a significant consideration for the Government in determining decisions on the number of places that can be made available in higher education.

In February 2008, in planning for the allocation of the ASNs which were then available for the spending review period, our Board determined that these should be focused on five priority areas, reflecting the priorities set out in the Secretary of State's grant letters:

    — the sustainability of existing Strategic Development Fund (SDF) projects;

    — foundation degrees;

    — health;

    — strategic subjects including science, technology, engineering and mathematics; and

    — higher education centres linked to "New University Challenge" funds.

  The Board also agreed at that time to take account of the implications of the Government's Equal and Lower Qualifications (ELQ) policy in allocating ASNs, and to continue to pursue its objective of widening participation as part of considering ASN proposals.

  You will be aware that two part-time providers, the Open University and Birkbeck College, were particularly affected by the ELQ policy, and we received early proposals from both institutions for ASNs to help restructure their provision. ASNs allocated to the OU and Birkbeck were for part-time provision. This reduced the availability of numbers for full-time entrants.

  In the letter sent to HEFCE on 29 October 2008 by the Secretary of State, we were asked to reduce the number of ASNs to 10,000 for 2009-10 and to consider ways of constraining recruitment in the sector. The HEFCE Board revisited the priorities for ASNs and agreed that we should not invite further proposals but should inform the sector that there would be no further ASNs to allocate for 2009-10 beyond those already allocated or already logged with the Council as future requirements. The Board also agreed that we should consider allocating the few remaining ASNs against the proposals logged with us (all of which met the original priorities), guided by the following principles:

    — bids for growth to support existing large capital investments where HEFCE;

    — funding-or that of other funders-would be put at risk if ASNs were not allocated;

    — bids for growth to support other HEFCE investments where our funding would be;

    — put at risk if ASNs were not allocated (this included Lifelong Learning Networks);

    — bids for growth in Strategically Important and Vulnerable Subjects (SIVS);

    — particularly STEM subjects (science, technology, engineering and mathematics); and

    — bids for growth in other priority areas (healthcare and foundation degrees).

  The Secretary of State re-iterated his concerns about over-recruitment in the Council's grant letter in January 2009 and asked us to bear down on over-recruitment to minimise or preferably eliminate this for 2009-10. As a result, the Council asked HEls to review their planned recruitment for the year and to ensure that they did not over-recruit.

  The Council is aware that there is considerable demand for ASNs and has adopted sensible rationing criteria, adjusting them as necessary to respond to the changing availability of funds.


  You asked about the process we use for allocating ASNs. We now allocate places through our Strategic Development Fund taking account of priorities determined from time to time by the Government and the Council—the priorities for the current period are set out above. Final decisions on the number of ASNs to be awarded can be taken by me (with advice from the HEFCE directors and institutional teams), by the Council's SDF Panel, or the full HEFCE Board, depending on the level of ASNs requested. A full description of our processes is set out in Circular Letter 05/2008 (See annex[385]).

HEIs' allocation of resources to courses and places

As you will know, HEIs have a great deal of autonomy to determine their own provision. The Council allocates a block grant to enable HEIs to use resources flexibly and effectively in the light of demand. HEls then determine their use of the block grant to support their chosen mix of higher education courses and to allocate places to each course, in response to demand.

Scope for expansion

I wanted to reply to your letter promptly and there has not been time to put together a detailed response to the questions you raised about whether or not the sector has the scope for further expansion and where additional numbers might be allocated. The intelligence I have from the HEFCE institutional teams is that most parts of the sector could probably accommodate more students, although institutions are now moving quickly towards entry decisions for 2009-10. If it would be helpful I would be happy to provide a follow up note on this issue based on ASN proposals currently logged with us and our intelligence from the sector.

June 2009

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