26 May 2017 
Karel Thomas, Executive Director
In 2015 the BUFDG Financial Metrics Working Group recommended a change in the financial metric used by UK funding councils as a trigger measure for further affordability of financial commitments. This was in recognition that the adoption of FRS 102 by the sector, together with the FEHE SORP, could result in some quite volatile financial results for HEIs. After agreeing some key principles, HEFCE modelled forecast and actual figures and has now approved a new approach to calculating commitment thresholds for institutions based on the adjusted net operating cashflow (ANOC) measure developed by the Working Group.
HEFCE and institutions do not need to revisit existing arrangements, but an institution will still require, as now, written approval from its funding council to increase its financial commitments above an agreed threshold. HEFCE published Circular letter 14/2017 dated 23rd May 2017 which explains how they will use the new "trigger metric" and the BUFDG Financial Commitments Working Group has issued a briefing to members.
