29th July 2015
HEFCE clarifies £150million cuts
HEFCE has announced details of reductions to the teaching grant for 2014/15 and 15/16 academic years. The sector was aware of £150million in expected cuts to university funding following the June budget, as part of a wider £450million savings at the Department for Business, Innovation, and Skills (BIS). The letter outlines that the £150million reduction will be made up of a 2.4% cut (£38million) from the Teaching budget from 14/15 (Column H here).
Of the remaining amount, £52million is to come from the now non-issuance of two funds first announced earlier this year that would have supported research-degree supervision, £37million from a fund to support the expected increase in student numbers in 2015/16, £13million from the Catalyst Fund budget, and £10million through grant reductions for 15/16 from institutions that over recruited in 2014/15.
Therefore all reductions, apart from the 2.4% shaved from the 14/15 Teaching grant, fall on the 15/16 financial year.
HMRC has launched a number of consultations over the past few days. The subjects of the consultations include Simplification of the Tax and National Insurance Treatment of Termination Payments and Improving Large Business Tax Compliance which might be of particular interest and relevance to universities.
A more detailed article on the termination payments consultation can be found here, including an invitation to contribute to BUFDG's response, and our full news article on the large business consultation can be found here.
Other consultations just launched by HMRC are:Tackling the hidden economy: extension of data gathering powers and Strengthening sanctions for tax avoidance: a Consultation on Detailed Proposals, both of which we will be reviewing to see if we can spot any of those famous 'unintended consequences' (although these often appear in the draft legislation itself).
Graduate employment rates rise
73% of UK 2013/14 graduates were in work 6-months after graduation, up from 70% for 2011/12 leavers, according to the latest HESA ‘Destination of Leavers from Higher Education’ report. The report compiles self-reported responses from individuals and institutions and tracks post-graduation activity by Gender, Contract type, Class of Degree, and other features.
Of the other figures reported, 7% of graduates were unemployed, down from 9% two years earlier, while 16% were engaged in further study, over four-fifths of whom were on a postgraduate course. The report, along with the data from previous years, can be downloaded from the HESA website.
The survey is not without its problems, according to Edward Peck, V-C of Nottingham Trent University, writing for WonkHE. The data collected by HESA is expected to be reconsidered, but he believes there are ‘significant’ problems to flag up, including the fact that the self-reported nature of data which makes it vulnerable to interpretation error and gaming. As a result he believes that a more robust system is needed, which includes a measure of the ‘value added’ by universities, to fit with the new policy era where employment metrics are likely to impact on university funding.
Charging irrecoverable VAT to KTP grants
For anyone who hasn't seen this discussion board topic, it was brought to our attention a couple of weeks ago that a new version of the 'Applicant Guidance' for Knowledge Transfer Partnerships ('KTPs') was published online last month here.
This has very subtly but rather vitally changed at the bottom of page 8 to state that only ‘recoverable input VAT’ (rather than ‘input VAT’ as in the previous version) is an ineligible cost. We are currently trying to find out from Innovate UK whether the more detailed VAT Statement for the KTP Guidebook will be/has been updated to reflect this welcome amendment. However, if anyone is already aware of such a change in the VAT Statement for the KTP Guidebook, please let Amanda know.
TRAC conference and training sessions
The TRAC Development Group (TDG) conference for TRAC practitioners will take place on Wednesday the 14th October at the Grand Connaught Rooms, London. The event bookings are being managed through BUFDG, and you can now book your place here. The delegate fee is £195.
TDG is focussing on supporting the sector to embed the new TRAC guidance and to adapt TRAC processes to address the implications of moving to the new accounting standard – FRS102. The conference theme is ‘Informed decision making in a more demanding environment’. The conference will provide an opportunity to hear from a range of institutions on their approaches to key aspects of the TRAC process; to learn about good practice; and network with colleagues from across the UK. Keynote speakers include Nolan Smith (Director of Finance, HEFCE) and Andrew McConnell (Director of Finance, University of Huddersfield).
Bookings have also opened for the next round of Introduction to TRAC sessions which take place on the 5th November - London, and the 6th November - Birmingham. The delegate fee for the introductory session is £350 and a place can be booked by clicking on the above links. Places at these sessions are limited to 12 at each venue so early booking is recommended.
If you have any queries on the booking process for either the TRAC Conference or the Introduction to TRAC sessions, please don’t hesitate to contact Gill.
FRS102 impact on iXBRL
Software provider IRIS has produced a short paper for Accountancy Age setting out some considerations and thoughts regarding how FRS102 will impact on iXBRL filing. One change being the removal of minimal tagging with comprehensive tagging being required - the Financial Reporting Council has stated “All business data items in a report must be tagged with an appropriate XBRL tag if a suitable tag exists in the relevant taxonomy.” The paper can be accessed here.
Some success in widening access
HEFCE has been examining the success of the sector in improving access for students from disadvantaged backgrounds. Drawing on the conclusions of five independent research reports it commissioned, it found that there has been some success in widening access, but also urges universities to do more. According to HEFCE, “analysis has shown that the young participation rate was 4 percentage points higher than the trends in GCSE attainment implied in 2009”, while the ‘non-continuation’ rate for full-time students “has improved from a rate of 14 per cent in 2003-04 to 10 per cent in 2013-14”. There has also been progress on access for disabled students, with the number of disabled students entering HE increasing “from just over 16,700 new entrants in 2003-04 to just over 51,300 in 2012-13”.
Separate comment on the HEFCE website highlights how the council hopes to respond in order to meet the target, set by the Prime Minister, to double the proportion of students from disadvantaged backgrounds by the end of the current parliament. The article also includes links to the five independent reports, while the story is covered by both the BBC and Research Fortnight.
In related news, a separate study of outcomes in the US, the UK, and Australia suggests that the design of higher education systems has little effect on “the handicap faced by children from disadvantaged families trying to enter leading higher education institutions”.
Pensions tax consultation
The government is considering further changes to pension tax relief, according to Ros Altman, government Pensions minister. In an interview with the FT, she told the paper that she preferred a flat rate of tax relief, and that “the current system, which offers extra tax relief to higher earners according to their tax band, was ‘bound to be regressive’”.
The government is currently undertaking a review of the tax system around pensions, and has launched a consultation, open to responses from institutions and individuals. The consultation covers a number of areas including simplicity, transparency, and sustainability, as well as personal responsibility and auto-enrolment. The deadline for submissions is the 30th September.
The FT article describes the proposed changes, on top of the restrictions on top-end tax relief outlined in the chancellor’s Summer Budget last month, as a ‘death knell’ for UK executive pensions. It quotes Mark Jackson, a partner at the actuarial consultants Lane Clark & Peacock as saying that “For the executives in our survey, this signals the end of the road as we know it for defined benefit and defined contribution executive pensions”. He added “As a consequence, we expect the move to cash will accelerate further over the next year. We expect the death of executive pensions by April”.
New address for notifying VAT errors to HMRC
HMRC has issued a new version of Notice 700/45: how to correct VAT errors and make adjustments or claims, with a new address for notifying errors shown in section 4.11.
Capital spending still on a downward trend for many
A few weeks ago we covered a report for HEFCE by Frontier Economics on the importance for the sector of HEFCE funding for capital expenditure. The report found a clear correlation between the level of capital expenditure and an institution’s ability to attract undergraduates, researchers, and research funding. Times Higher reporter Chris Havergal has spent the intervening period digesting the figures, and has a number of further articles in the paper.
The first explains how UK HE spends about a third of the amount, per student, on capital expenditure compared with the US system, and much less than HE in Australia, Switzerland, and Spain. In total just seven OECD countries spend less than the UK. The second article claims that, not only is capital spending in the UK low by international standards, but the variation across the sector means that in many HEIs the trend is still downward. According to the figures “a third of universities have cut spending on campus facilities by more than a quarter since 2008”, while “About half of English higher education institutions reduced their annual capital expenditure by some degree between 2008-09 and 2013-14”.
10 Minutes with... Robin Higgins
In our latest '10 Minutes with...' series, we talk to the Purchasing Manager at Canterbury Christ Church University, Robin Higgins.
"Robin has worked in procurement since he graduated from Canterbury Christ Church University with a joint honours degree in History and Radio, Film & Television Studies. After failing to get a job as a radio journalist he worked as an order placer and expeditor for a company who manufactured electrical connectors for the aerospace industry and worked his way up to the role as a ‘commodity controller’. From there Robin moved to foodservice provider Brake Brothers where he specialised in non-core procurement. When the ethical position of the private sector became too much Robin then returned to Canterbury Christ Church where he was spent the last ten years working to embed good procurement practice and develop the reputation of the procurement function."
Read the interview here.
Jon Moon – Clarity and Impact
Imagine being able to write in a way that presses readers’ buttons and help you achieve your outcomes.
Visualise writing in a way that impresses and influences. That engages and gets results.
Imagine writing about your business with real clarity and impact.
Imagine no more. This training shows you how.
Now that the latest round of FRS102 sessions are drawing to a close, and you are all mastering the technical accounting changes, we have turned our attention to words. To help you tell the story that goes with the new accounts format, we have engaged Jon Moon to run a series of workshops on communicating with Clarity and Impact:
15/09/15, Edinburgh (St Leonards Hall), Clarity and Impact - Edinburgh
02/10/15, Cardiff University, Clarity and Impact - Cardiff
08/10/15, Liverpool Hope University, Clarity and Impact - Liverpool
09/10/15, London (IoE), Clarity and Impact - London
15/10/15, Teesside (Darlington), Clarity and Impact - Teesside
16/10/15, Leicester (DMU), Clarity and Impact - Leicester
05/11/15, University of Sussex, Clarity and Impact - Sussex
Spaces are limited and will be on sale from next Monday 3rd August 2015 on a first-come first-served basis.
Book early to avoid disappointment!
HESA codifies data good practice
The four HE funding bodies, working in conjunction with HESA, have drawn up a code of practice for Higher Education data collections, to guide standards in the production and management of data used by students, funders, and institutions themselves. The accompanying HESA articles states that “While these principles have always been implicit, we are bringing them together in this Code of Practice for ease of reference, and to support those preparing and managing data collections”. The article goes on to expand on what the three principles of Honesty, Impartiality, and Rigour mean in reference to data, and how they are applied.
The article also provides a list of relevant contacts at each of the funding bodies that institutions and individuals can contact should a ‘breach of the code’ be identified.
UUK launches 'Universities for Europe' campaign
Universities UK launched its new ‘Universities for Europe’ campaign this week, stating the case for the benefits to UK HE of European membership. With an EU referendum due during 2017, the organisation has set its stall out early. Speaking at the launch of the campaign, Nicola Dandridge, Chief Executive of Universities UK said:
“UK’s membership of the European Union makes the UK’s outstanding universities even stronger - contributing to economic growth, employable graduates and cutting edge research discoveries. The Universities for Europe campaign will ensure that university sector is a strong, positive voice in the referendum debate. From today, universities want to inspire the debate on Europe and ensure that it is informed and strengthened by evidence”.
The launch of the campaign was covered in the Independent, while a separate UUK blog post highlighted the three main roles universities can play as a result of the EU connection. However recent articles in the Times Higher and on the WonkHE blog show that the case for staying in Europe is perhaps not as clear-cut as may be assumed, and a recent article by Nick Hillman on the Research Fortnight website suggests that universities need to make their arguments about more than just funding if the campaign is to be successful.
Job of the Week
Our Job of the Week is for a Finance Partner at De Montfort University, Leicester. “Working within the Financial Reporting team, the Finance Partner will oversee the compilation of the monthly financial pack for the Executive Board and deliver planning, forecasting and financial information to Senior Executives, Directors and budget holders within the areas supported”. The closing date for applications is the 26th August. Click here for other HE finance vacancies.