Memorandum 70
Submission from the Higher Education Funding
Council for England (HEFCE)
CORE HEFCE FUNDING
1. HEFCE allocates around £7 billion
for higher education each year. Formulae are used to determine
how 95% of this funding is allocated between institutions. This
approach is intended to minimise the accountability burden on
institutions and to provide a funding environment that supports
long-term strategic planning and decision-making. Our formulae
take account of factors such as the number and type of students,
the subjects taught, and the amount and quality of research undertaken.
Once this has been determined, it is provided in the form of a
"block grant", which institutions are free to spend
according to their own priorities, subject to a financial memorandum.[251]
We do not expect institutions to model their internal allocations
on our funding method, but instead to allocate their funding strategically
to deliver overall teaching and research activity and complement
activity supported by other funders.
2. £4.5 billion of HEFCE's annual allocation
is devoted to learning and teaching. In 2006-07, £543.5 million
of this was attributable to students in Engineering subjects.[252]
Funding attributable to each student full-time equivalent (FTE)
is weighted within four price groups, which are intended broadly
to reflect the cost of provision in different subject areas. Engineering
subjects reside within price group B, for which a weighting of
1.7 is applied to the base price (£3,964 in 2008-09) paid
by HEFCE for each student FTE. Following a consultation on teaching
funding, the HEFCE Board has agreed to review price groups during
2008, taking into account the evidence emerging from the transparent
approach to costing (TRAC) data institutions are gathering on
the cost of teaching. Any changes resulting from this analysis
will be implemented from 2009-10. In the meantime, HEFCE is providing
£75 million additional funding to sustain provision in very
high cost and vulnerable laboratory-based subjects, including
certain Engineering subjects (chemical engineering, and mineral
metallurgy and materials engineering).
3. HEFCE provides research funding as one
arm of the dual-support system, to which the government has re-iterated
its commitment, most recently in the Innovation Nation White Paper.[253]
Public funding through dual support, in combination with funding
from multiple external sources including the Research Councils
and the research charities, has served the country well in enabling
the development of a world class research base across UK higher
education. Around 20% or £1.4 million of HEFCE's annual allocation
is devoted to research. In 2006-07, HEFCE allocated £137.4
million QR funding to Engineering subjects.[254]
This is allocated as "quality-related" (QR) funding,
the level of which is determined by indicators primarily derived
from the periodic Research Assessment Exercise (RAE) and annual
Research Activity Survey (RAS). These indicators provide measures
of the quality and amount of research undertaken in an institution,
and of the level of specific activities for which we have earmarked
support, notably postgraduate research students and research funded
by charities and business. Although the level of QR attributable
to the activity of different subject areas is made clear in each
institution's grant, it is for the institution to determine how
best to distribute this funding across its areas of provision.
4. The central achievement of this non-hypothecated
funding is to enable institutions to invest in improving and updating
their research activities, both through general investment in
the research infrastructure and in training new researchers. In
particular, it enables institutions to identify and invest in
important new and emerging areas of work, including interdisciplinary
areas that may not comfortably reside within the boundaries of
Research Councils and other funding agencies. HEIs require the
support of QR to maintain the breadth and depth across the entire
research base to be ready and able to respond quickly and effectively
to priorities identified by Research Councils and others. QR funding
also supports the preliminary thinking and research required to
generate high quality grant proposals. The stability provided
by block grant funding, allocated through a method that minimises
volatility in the allocations to individual HEIs, is an important
element underpinning their ability to move quickly into innovative
fields and approaches in order to stay at the leading edge internationally.
This has been a key ingredient in the competitive advantage that
UK universities have been able to generate over their counterparts
in other countries.
5. Submissions to the 2008 RAE are currently
being assessed by panels and results will be announced in December
2008. A number of Improvements were made to the assessment process
during the period leading up to the 2008 exercise, including measures
specifically seeking to ensure that early career researchers,
researchers who experience a career break, and interdisciplinary
and applied research are not disadvantaged. Details of the steps
taken and the specific approach of the 2008 Engineering panels
are set out in the generic statement and panel working methods
on the RAE web-site.[255]
We are currently at an early stage of developing the Research
Excellence Framework (REF), which will be fully implemented by
2014-15. We are, however, committed to ensuring a similarly positive
approach to researchers at different stages of their careers,
and to interdisciplinary and applied research, within the new
system. The recent Ministerial announcement on the REF confirmed
that the use of indicators will vary according to the needs of
different subject areas.[256]
ADDITIONAL FUNDING
FOR STRATEGICALLY
IMPORTANT AND
VULNERABLE SUBJECTS
6. On 1 December 2004, the Secretary of
State for Education and Skills wrote to HEFCE requesting the Council's
view on "whether there are any higher education subjects
or courses that are of national strategic importance, where intervention
might be appropriate to enable them to be available ... and the
types of intervention which it believes could be considered".
The Secretary of State's letter included a list of subjects that
had been deemed strategically important.
7. In response to this, HEFCE set up a Strategically
Important Subjects Advisory Group, chaired by Professor Sir Gareth
Roberts, which met three times between January and April 2005.
The group was charged with providing HEFCE's Chief Executive with
advice on a number of issues, including developing a rationale,
process and criteria for identifying academic subjects as being
of strategic importance, both now and in the future; and for identifying
those strategically important subjects that are particularly vulnerable.
8. Sir Gareth's group focused on the following
subjects which they considered to be both strategically important
and vulnerable[257]:
(a) Science, technology, engineering and mathematics
(STEM subjects).
(b) Area studies and related minority languages.
(c) Modern foreign languages.
(e) Quantitative social science.
9. In summary, Sir Gareth's group advised
that:
- the dynamism of the HE sector is a great
strength. Action should therefore be proportionate to the problems
we find; and
- each strategic and vulnerable subject will
have its own characteristics that will require a tailor-made solution.
10. Since then we have worked in partnership
with a wide variety of stakeholders, using a sound and reliable
evidence base, to support and develop strategically important
and vulnerable subjects. Stakeholders include, but are not limited
to, funding bodies, Royal Societies and professional bodies,,
subject associations and groups concerned with widening participation
into HE. Over the five years 2005-06 to 2010-11 we estimate we
will have committed £300 million to support SIVS. Details
of HEFCE's support for Engineering within this, which is made
in partnership with the Royal Academy of Engineering, is provided
in the Annex; this is in addition to HEFCE's mainstream formula
funding for Engineering teaching and research.
11. In tandem with this we keep a watching
brief on the potential national consequences of individual department
closures to monitor whether current provision is out of step with
national or regional need. Acting with regional partners, such
as Regional Development Agencies, we are able to sustain disciplines
of strategic importance in a region where an individual HEI's
decision may have led to some decline. We also keep abreast of
the data so that we can understand trends over time in strategic
subjects. This helps us to recognise the vulnerability of individual
strategic subjects. Over the longer term, these data will help
us understand the impact of our work to encourage more people
to study strategic subjects in higher education.
12. More recently, we have re-convened our
advisory group. Chaired by Professor Sir Brian Follett, the group's
aim is to produce a report, by September 2008, that reviews our
policy towards strategically important subjects and progress since
the 2005 report, and to advise HEFCE on the value of its investments
and whether its policy remains fit for purpose.
13. Considering demand for undergraduate
Engineering, the group has found:
- Taking into account (via UCAS applications)
the full range of Engineering disciplines, a 5% increase in applicants
for entry over the period 2002 to 2007 to 22,599 prospective students.[258]
- A 29% increase in student numbers (FTEs)
for Civil Engineering over the period 1999-2000 to 2006-07 to
8,823 home students.
- Mechanical, Aeronautical, and Production
engineering student numbers have remained stable over the period
2002-03 to 2005-06 at 15,500 home FTE students.
- General Engineering and Mineral, Metallurgy
and Materials Engineering have seen decreases of 17% over the
period 1999-2000 to 2006-07 to 12,060 and 2,382 FTEs respectively.
- Decreases in many Engineering disciplines
have been offset by strong growth (in many cases doubling) of
international student numbers. For example, Chemical Engineering
has seen international students rise from 493 FTE students to
942 FTE over the period 1999-2000 to 2006-07.
14. Looking further forward, and in line
with Recommendation 7.15 from Lord Sainsbury's review of Science
and Innovation,[259]
a new advisory group will be established with an extended remit
to oversee graduate supply and demand. Terms of reference will
be developed for the new group, which will include representatives
from discipline groups, employers, and different types of HE institution.
251 www.hefce.ac.uk/pubs/hefce/2006/06_24/ Back
252
2006-07 HESA and ILR data, Home and EC funded only; notional grant
calculated as standard resource minus assumed fees. This includes
courses in: General Engineering; Chemical Engineering; Mineral,
Metallurgy and Materials Engineering; Civil Engineering; Electrical,
Electronic and Computer Engineering; Mechanical, Aero and Production
Engineering; IT and Systems Sciences; Computer Software Engineering. Back
253
www.dius.gov.uk/ScienceInnovation.pdf Back
254
This includes units of assessment 26 to 31 (covering General Engineering,
Chemical Engineering, Civil Engineering, Electrical and Electronic
Engineering, Mechanical, Aeronautical and Manufacturing Engineering,
and Mineral and Mining Engineering). Back
255
www.rae.ac.uk/pubs/2006/01/ Back
256
www.hefce.ac.uk/news/hefce/2008/ref.htm Back
257
See http://www.hefce.ac.uk/aboutus/sis/group/
for the group's full report and http://www.hefce.ac.uk/aboutus/sis/
for a formal update to the Secretary of State on HEFCE's programme
of work to support SIVS Back
258
Data taken from an analysis prepared for the HEFCE Chief Executive's
Advisory Group on Strategically Important and Vulnerable Subjects,
to be published in September 2008 Back
259
www.hm-treasury.gov.uk/independent_reviews/sainsbury_review/sainsbury_index.cfm
Recommendation 7.1.5 states: "To address the lack of information
on the supply and demand of STEM skills, HEFCE should transform
the Strategically Important and Vulnerable Subject Advisory Group
into an Advisory Group on Graduate Supply and Demand and extend
its remit to include responsibility for publishing an annual report
describing: undergraduate subject trends; recent graduate jobs
and salaries; and the subjects where employers and government
departments believe that there are, or are likely shortly to be,
shortages of graduates with key skills. The Review welcomes the
extension of the group's membership to include an industry and
a STEM business representative". Back
|
