Sector responses to the BIS grant letter

Last Wednesday afternoon (a matter of hours after last week’s Digest went to press) BIS released its grant letter to HEFCE, confirming funding allocations and highlighting government priorities for HE for the year. This year the sector faces the implementation of the new financial and funding arrangements, so the grant reflects more funding coming ‘direct’ from students for tuition fees. HEFCE point out that the “ring-fenced settlement for science and research means that we will be able to maintain overall funding for research at the same cash levels as for 2011-12”. In addition they note that institutions will find out their individual allocations on 22^nd March.

The letter covers a wide range of issues, with the Times Higher choosing to focus on measures to avoid the over-recruitment of students by universities. It highlights the section that says there has been a “recent trend of strong recruitment across the sector” and that “As a result, we are now asking the council to reduce its entrant control maximum by 5,000 places in 2012-13. This brings it in line with our original spending plans and reduces the risk of over recruitment.” However, the NUS said that, coupled with the letter’s confirmation that the 10,000 extra “stimulus” places allocated in 2011-12 would not be repeated; this represented an “incredibly short-sighted” cut of 15,000 places. The letter also makes clear that the fine for over-recruitment will increase in the coming years, from the £3,800 per student set for 2012-13, the Telegraph reports.

Pam Tatlow, Chief Executive of think-tank Million+ said that while they “welcome the Government’s commitment to monitor the impact of the mini-market in AAB students… the reduction in the total number of student places available in 2012-13 by 15,000 is likely to dash the aspirations and ambitions of many well-qualified applicants”. The UCU general secretary Sally Hunt said that “'The government's university funding plans are a dangerous experiment untried anywhere else in the world that could well be disastrous for our universities”.  

In other parts of the letter BIS describe their intention to review postgraduate participation, and detail the work HEFCE are doing on improving efficiency, social mobility and enhancing the student experience. There’s precious little on Sustainability though (see if you can find it!). 

...and HEFCE funding decisions

Just this afternoon HEFCE have published their response to the grant letter, putting flesh on the bones of the funding agreement. On teaching funding they say that "the overall level of government support for teaching in universities and colleges is set to increase over the next few years as a result of higher tuition fee loans under the Government’s new finance arrangements for higher education. HEFCE’s grant will reduce accordingly, but our commitment to supporting high-cost and strategically important subjects, widening participation and smaller specialist institutions will be maintained". 

In addition to the Teaching grant and the ring-fenced research settlement, there will be £150million for knowledge exchange, £265million for capital funding, and £125 million for special national facility programmes such as museums and JISC. Regarding student number controlls, the announcement says that HEFCE will "adjust grants to HEIs at a rate of £3,800 per full-time undergraduate where there has been over-recruitment in 2011-12. The rate for over-recruitment in 2012-13 has not yet been announced, but universities and colleges should expect this to be at a level that represents a financial disincentive to over-recruit".

Simon Baker has produced a quick-analysis of the announcement on the THE website.

UCAS application figures Part I

UCAS this week published the 2012/13 applicant figures for students to UK universities. The data set shows an 7.4% decrease on the same stage last year. UCAS Chief Executive Mary Curnock Cook said: "There has been a headline drop of 7.4% in applicants with a slightly larger fall in England.The more detailed analysis of application rates for young people takes account of population changes. This shows a fall of just one percentage point in the application rate in England, with little change across the rest of the UK”. Interestingly, she added that “our analysis shows that decreases in demand are slightly larger in more advantaged groups than in the disadvantaged groups. Widely expressed concerns about recent changes in HE funding arrangements having a disproportionate effect on more disadvantaged groups are not borne out by these data”.

This will no doubt prove interesting to the new Independent commission on fees recently set up by the government, to look at the impact of the increase in fees on university participation. Chair of the commission Will Hutton said that it would “provide an independent check on the biggest reforms for higher education in a generation, particularly looking at what impact higher fees have on prospective students from less privileged backgrounds”. An article in the Guardian suggests the biggest impact has been on mature students.

UCAS application figures Part II

The figures also show that there has been a decrease of over 11% in applicants from EU countries, but the number of prospective students from outside the EU has increased by 13.7%. Simon Baker writes in the THE to say that “it is now the norm for at least 15% of a universities’ students to come from outside the country”. Referencing a HEPI report on Institutional Diversity in UK HE, he adds that “only 61 British institutions had passed this threshold in 1996-97, whereas in 2009-10 it was 102, well over half the total. The average proportion of non-UK students in each institution has increased by half in the same period to 21 per cent - fuelled by a rise in non-European Union students”.

The analysis from Universities Scotland shows that the proportion of English applicants to Scottish Universities has increased slightly, and it also shows Scotland has fared better in relation to EU and International students. Oddly there’s no mention of the change in the number of Scottish students in Scottish universities. The Universities UK press release from Chief Executive Nicola Dandridge says that “the dip is far less dramatic than many were initially predicting. And if we look at the number of 18-year-old applicants from the UK, this has dropped by only 3.6 per cent at a time when the overall 18-year-old population is in decline. The main issue now is whether students from certain backgrounds have been deterred more than others. Universities UK will continue monitoring the impact of the new system on groups of students and specific subjects”. David Willetts also has his say in an article in the Telegraph.

Are we in or out?

This is a key question for English HEIs – the burden and limitations of the EU Procurement Regulations are seen as a key stumbling block to freeing up procurement processes within HEIs to achieve optimum efficiency.

I am sure that those of you following this debate will recall David Willetts’ announcement in the autumn, where he explained that “we [the government] believe EU public procurement rules will no longer apply to the vast majority of our universities” [on the grounds that under the new regime less that 50% of their funding will be public funding]. Of course it is clear from this statement that individual universities will still have to make a judgement based on the individual circumstances of their organisation. Being cautious accountants, BUFDG has been working with UUK to ascertain whether BIS can share their legal advice, to assist HEIs in making this assessment. Unfortunately this line of enquiry has not produced any firm evidence. Although we are aware that some universities have already taken individual advice, we are keen to avoid duplication of effort and so BUFDG is planning to seek legal advice for the benefit of the sector (in all parts of the UK) - we are currently putting together the instructions for this and we will publish the outcome as soon as it is available. If you have any particular concerns or interest in this area then please get in touch. 

Is it necessary?

After David Willetts’ bold statement at the Politeia Winter address that it’s full steam ahead for shared services now that the VAT barrier has been removed (see our scepticism in last week’s digest), a further concern has come about. Last Thursday the European Commission officially asked Luxembourg to change its interpretation of the Cost Sharing Exemption because the Commission believes it is incompatible with European Union law. The key area of difficulty is in their interpretation of “directly necessary”. In Luxembourg, all services supplied to a member by a cost sharing group are deemed to be directly necessary providing the member’s taxable activities do not exceed 30%. For those of you following the UK debate, you will be aware that the proposals for the UK are very similar, although the threshold for taxable activities is slightly lower at 15%. 

In our view the proposed UK interpretation introduces a risk of challenge from the EU commission - For those who are familiar with other VAT provisions, a more natural level would fall at 5%. However this concern comes on top of a the more fundamental issue that the current UK proposals exclude many research intensive institutions (from the Russell Group and 1994 Group). BUFDG have already raised this matter in a meeting with BIS last week and plan to follow up with written representations. If you feel you may have something to add to this then please get in touch.

Bits and bobs

• UCU are considering dropping work-to-rule industrial action, the THE reports. "Sally Hunt, the UCU general secretary, wrote to members last week saying the employers had agreed to two joint reviews of changes to the Universities Superannuation Scheme. These reviews would look at pension rights in redundancy for staff aged 55 or over, and compare benefits in the new career-average USS section against those in public sector schemes such as the Teachers’ Pension Scheme". 

• LUPC are running an 'Introduction to EU Procurement Course' in London on the 2nd February. The course "is ideal for non-procurement specialists looking for an introduction in how to use framework agreements and apply the EU procurement process in their institutions. The course will cover an overview of procurement rules; frameworks and calling off; and common pitfalls". It's £135 +VAT. 

• The Leadership Foundation for Higher Education are offering the graduates of their deputy directors program a follow-up package. This will take the form of a telephone coaching session supported by a HE Transformational Leadership Questionnaire (TLQ). The aim of this package is to enable delegates to build on the discussions about organisational culture and change at the residential event they attended, with particular focus on their personal leadership style (this was identified in the feedback as an area for development).

• This package will be available in March and early April, at mutually convenient times. The price is £550. Please get in touch before the end of next week if you would like to take up this opportunity or want further information.

• Universities UK are calling on the government to exclude legitimate non-EU students from immigration figures. According to the THE, "the proposal - for additional immigration data exclusive of university students to be established alongside present figures - could also protect the academy from any further toughening of student-visa rules". Edward Acton, vice-chancellor of the University of East Anglia and chair of UUK's task force on the Tier 4 student-visa system, said: "This move we're proposing would make it far easier for universities and the British Council to get the message across...that legitimate non-European Union students are most welcome".

• Lastly, Universities face a challenge from within in commercialising research according to work done by a researcher at the University of Abertay Dundee. Despite knowledge transfer and greater HE involvement for business being high on the political agenda, "over two-fifths of academics surveyed resent pressure to commercialise their work", the THE reports.