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Small and Specialist Institutions

B8/08 Agenda item 10 24 January 2008

Issue 1. A group of small and specialist institutions currently receive additional HEFCE funding through the allocation of an institutional premium. As part of the latest review of the funding method for teaching it was agreed that we should move from this system of institutional premiums to targeted allocations. To assist in developing this approach the advice of an advisory group has been sought on the underlying principles that should inform the provision of a targeted allocation for these institutions together with funding implications. This paper presents the recommendations following advice from the Small and Specialist Institutions Review (SSIRG).

Recommendation(s) 2.

The Board is invited to agree: a. b.

c. d.

e. f.

g.

h. i. j.

To remove the category of specialist institution from HEFCE’s approach to the funding of teaching; To fund those specialist institutions currently in receipt of an institutional premium of up to 10 per cent by moving this funding into their mainstream grant; That for those institutions in receipt of institutional premiums in excess of 10 per cent should be converted to targeted allocation for 2008 – 09; That HEFCE continue to develop the initial work on public interest and public value with a view to having a model applicable across the sector by 2010; That the small institution premium for six institutions in paragraph 30 be provided as part of mainstream grant; That the small institution premium provided to Oxford and Cambridge be converted to a specific targeted allocation and reviewed in the light of any review of fees post 2009; That HEFCE require each institution in receipt of a targeted allocation provide an indication of how they will address both the general and specific public interest issues; That funding for additional student places in these institutions should be provided at standard levels of HEFCE funding; That HEFCE undertake to review targeted allocations discussed in this paper at least every five years; That HEFCE keep the land based studies area of provision under review.


Timing for decisions 3. Agreement of the general approach and principles at this Board meeting will allow the funding implications for 2008 – 09 to be implemented as part of the general funding round work for next year.

Further information 4. Liz Beaty (0117 931 7062, l.beaty@hefce.ac.uk) or Derek Hicks (0117 931 7460, d.hicks@hefce.ac.uk).

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Background 5. We consulted the sector on a new approach to the funding of teaching where part of the funding available to institutions would be through a specific targeted allocation. Such allocations would have specific purposes and be outside of the tolerance band. The consultation showed strong support for this general approach. 6. As part of the ongoing work to develop fully the targeted allocation approach, a review of the special funding that is attributed to small and to specialist institutions has been undertaken. Specifically, an advisory group chaired by Dame Janet Ritterman has been established to develop recommendations about the best way of moving from the allocation of an institutional premium as a generalised way of supporting small and specialist institutions towards a system of targeted allocations. The membership and terms of reference are attached at Annex A. 7. In developing their recommendations the SSIRG has drawn on the previous work on specialist institutions such as the Sutherland, Hosier and Ralph reviews, together with the views of the small and specialist institutions in response to a letter sent to each of them in August (a copy of this letter is attached at Annex B). The SSIRG has also been keen to work with the grain of HEFCE’s general approach to the funding of teaching, with the block grant and the autonomy of institutions seen as vital elements in supporting a vibrant, diverse and sustainable sector. Additionally, the SSIRG has been conscious of the major changes in the general funding environment, and has taken the need to provide some measure of stability, where appropriate, to institutional funding as an important objective of their work. 8. Five other factors have also been significant influences in shaping the recommendations made by the SSIRG: a. That the small and specialist institutions are a vital part of the overall HE ecology in England, providing important elements of diversity for students, employers and staff; b. That the evidence of previous reviews and some of the emerging TRAC data demonstrate that there are significant additional costs being incurred in many of these institutions; c. That HEFCE funding should not provide disincentives to institutions seeking other sources of income to support their teaching activities, nor to developing relationships up to and including merger with other HEIs; d. That providing a targeted allocation to support the small or specialist institutions should be seen as an exceptional approach, adopted where other approaches are judged to be unlikely to secure the benefits required; e. That all of the SSIRG funding recommendations may well need to be revisited after 2009 in the light of any more general review of fees.

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Discussion 9. The discussion and recommendations below will focus first on the specialist institution premium and then on the small institution premium. Specialist institutions 10. There have been significant changes to the institutions comprising the specialist institutions group, with a number joining the HEFCE sector since 1998 (Arts Institute Bournemouth, Birmingham College of Food, Courtauld Institute, Guildhall School of Music & Drama, Heythrop College, Institute of Cancer Research, Royal Agricultural College). In addition, we have seen the creation of new institutions through merger such as the University College for the Creative Arts bringing together Kent and Surrey Institutes of Art, and a brand new institution, the Conservatoire for Dance and Drama. Finally, four institutions have or are scheduled to merge during 2007 or 2008 (Cumbria Institute of Art, Dartington College of Arts, RCN Institute, St Martin’s College), so have not been considered as part of this review. (The current list of specialist institutions and an indication of the premium they receive - both percentage and funding - is at Annex C). In addition, other exercises have been undertaken to look at the funding of various areas of provision such as education, sports science, psychology and media studies ( subject areas common in many of the specialist institutions), and this work has led to funding changes which have removed the need for a premium for some of those institutions. 11. Another important development that the SSIRG has taken into account has been the transfer of funding responsibility from HEFCE to the Teacher Training Agency – now the Teacher Development Agency – for Initial Teacher Training (TDA), and to the NHS for nursing and other professions allied to health since the specialist institution category was established in 1998. This has seen major shifts in funding routes as many of the specialist institutions have very significant elements of one or both of these areas. The effect of this is that HEFCE provision often forms only a part, and sometimes a minority part, of provision and funding at some of these institutions. 12. The factors outlined above have led the Group to consider whether the whole specialist institution category is still useful as part of a new funding model. They concluded that it is not. In coming to this view, the SSIRG has taken particular note of the original Sutherland Report recommendation concerning the provision of an institutional premium only where the institution would move significantly above the +5 per cent level without one. This approach has meant that currently around a third of such institutions receive no premium at all, and a further 20 per cent or so a relatively small percentage of between 10 per cent (the vast majority) and 20 per cent. The SSIRG has also noted that the impact of the premium is often simply to move the institutions within the contract range. Taking all this into account, the SSIRG believe that a new approach is now required.

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A new approach 13. As a first step in a new approach the SSIRG believe, given the factors noted above, the specialist institution category has now served its purpose and should be abandoned. Recommendation: To remove the specialist institution category from HEFCE’s approach to funding. 14. If we remove the specialist institution category then plainly a new way of dealing with the funding of this group of institutions obviously needs to be developed. In the view of the SSIRG, the best way forward would be to split the specialist institutions into those receiving high or relatively high levels of funding through the institutional premium route from those receiving lower levels or no premium at all. Institutions receiving an institutional premium up to 10 per cent 15. Of the 40 institutions included in the remit of the SSIRG, it can be seen (at Annex C) that 20 are in receipt of either a small premium of up to 10 per cent, or no premium at all. Many of these institutions have characteristics in common such as significant proportions of initial teacher training (ITT) or a history of mixed FE and HE provision and funding. It is also the case that despite major changes to funding sources these institutions have been generally stable over the last five or six years, despite the major changes to funding mentioned above. 16. With almost 10 years’ of funding experience under the current approach there is no clear evidence to suggest that a substantial increase in funding is required to ensure the long term sustainability of any of these 20 specialist institutions. However, the SSIRG believes that these institutions provide a very important contribution to a diverse HE sector, and that broad stability in actual funding levels is particularly important at this time. Their view is that HEFCE should continue to provide this funding, not as a targeted allocation but as a part of the mainstream grant for those institutions currently in receipt of this institutional premium. The total sum involved here would be in the order of £12.2 million, but this approach does not require any additional funding to be made available. The main impact would be to affect institutions’ positions within the contract range. The implications of such an approach would require a small number of institutions to recruit more students in order to come back within the tolerance band. The impact of this approach (based on 2006 – 07 figures) is outlined in Annex D. Recommendation: To move the funding provided via the 10 per cent institutional premium into mainstream funding for each institution.

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Institutions receiving a higher level of premium – next steps 17. If we deal with the institutions in receipt of premiums of up to 10 per cent as outlined above, we are left with 20 institutions (assuming Dartington College of Arts merges during 2008) in receipt of premiums ranging from 20 per cent to 305 per cent, totalling around £46 million. Almost all of these 20 institutions are very highly specialized, often with only one subject area of provision. They also include some of the most highly regarded institutions in their particular areas of specialism, many having extremely close relationships with the employment sector that they serve, and many also playing major national and international roles in the HE sector. The SSIRG understands and accepts the importance of the roles being fulfilled by these institutions for the HE sector and for the country. 18. In addition, a significant number of these institutions have been subject to detailed review to identify the scale and nature of additional costs incurred in delivering their particular areas of provision. Based on this information, and coupled with the knowledge of the SSIRG, there is no reason to question either that substantial additional costs are incurred, nor that reducing funding would, in most, but importantly not all, cases have a major negative impact on the institutions and the provision offered. Equally, drawing on the same evidence base, the SSIRG is clear that there is no strong case for increasing the general level of HEFCE funding to this group of institutions at this time. 19. The SSIRG view is that standard HEFCE funding would not be sufficient to allow these institutions to deliver their provision in the way and at the quality they currently offer. As has also been noted, there is good evidence to support the fact that significant additional costs are necessarily being incurred by many of the specialist institutions under review. It is also clear that for many of these institutions the current levels of funding are of such significance that major reductions would damage their viability, especially whilst the general HE market is still developing. Each of these factors plays out in an environment where the HE sector in general is undergoing some major changes in terms of funding, in particular with the introduction of variable fees for full time undergraduate provision. 20. Whilst short term stability is seen as important, the SSIRG has been giving considerable thought to the basis on which any additional HEFCE funding might be made available to this group of institutions in the longer run. Here major themes have been public interest and public value. Whilst this group of institutions shares many general characteristics, they are very diverse in the areas of provision covered and their particular types of provision. Some are wholly postgraduate, some have four year undergraduate programmes, some are very active in research, and some have major sources of funding other than HEFCE. Despite this varied set of institutions, the SSIRG has developed some initial thoughts around how public interest and public value tests might be used at a strategic level to inform funding decisions, but it has not so far been possible to develop a simple model that could drive funding for such a diverse set of institutions.

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21. Given these circumstances, the SSIRG believes that short term stability of funding should be a priority for this group of 20 institutions. Our view is that the best way to deliver this stability in the short term is simply to convert current specialist institution premiums into targeted allocations for 2008 – 09 with a view to undertaking further work that could result in funding changes in later years. Recommendation: That for those institutions in receipt of institutional premiums in excess of 10 per cent should be converted to targeted allocation for 2008 – 09. 22. In addition to the varied and complex issues relating to the group of small and specialist institutions within the remit of the SSIRG, based on their work to date it is equally clear that the public interest and public value issue would have significant implications for HEFCE funding beyond this particular group. If public interest and public value is to form a significant part of a HEFCE funding approach to teaching, we believe that there is a need for further work to be undertaken to develop these ideas in the context of the sector as a whole rather than simply focusing on this group of 20 institutions. Recommendation: That HEFCE continue to develop the initial work on public interest and public value with a view to having a model applicable across the sector by 2010. The Small Institution Premium 23. ln addition to the specialist institution question, the SSIRG was asked to consider the small institution premium. This affects only eight institutions (see Annex E), and is only really significant for Oxford and Cambridge where it is an integral part of the settlement reached in respect of the withdrawal by the Department for Education and Skills (as was) of funding for college fees. The total value of funding involved is around £9.1 million with around £7.82 million going to Oxford and Cambridge. 24. The SSIRG was persuaded that for the very small institutions, this premium plays an important part in supporting them as part of a diverse sector. In these cases the SSIRG view was that the funding should continue to be provided. However, the SSIRG also noted that there was a very wide difference in scale both of the premiums paid and the institutions involved, in particular Oxford and Cambridge. Here they accepted that the small institution premium played an important part in supporting the college system at Oxford and Cambridge in the current funding environment. So, whilst persuaded that overall there was a case for this funding to continue, the SSIRG made two observations. First, that HEFCE should give close consideration as to whether this funding was providing institutions with an incentive not to address issues of sustainability. Second, with reference to Oxford and Cambridge, that this funding stream, and its relationship to the overall settlement relating to college fees, should be reconsidered in the light of any review of tuition fees.

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25. The SSIRG’s view was that the small institution premium simply be converted to a specific targeted allocation. However, we have considered this approach and believe that the sums involved for six of these institutions (Bishop Grosseteste University College, Norwich School of Art and Design, School of Pharmacy, Ravensbourne College, Royal Veterinary College, Writtle College) would be better handled by adopting the same approach as for the 10 per cent specialist institution premium i.e. providing it as part of their mainstream grant. The combined impact of mainstreaming the small and specialist institutional premiums is outlined in Annex F. Recommendation: That the small institution premium for Bishop Grosseteste University College, Norwich School of Art and Design, School of Pharmacy, Ravensbourne College, Royal Veterinary College and Writtle College be provided as part of mainstream grant. 26. The exceptions to this approach, primarily because they are of a much more significant scale, would be Oxford and Cambridge, where moving the premiums into a targeted allocation would be a more appropriate approach. In taking this line, we do accept the comment of the SSIRG about the importance of reviewing this strand of funding in the light of any future review of undergraduate fees. Recommendation: That the small institution premium provided to Oxford and Cambridge be converted to a specific targeted allocation and reviewed in the light of any review of fees post 2009. General issues 27. In developing their thinking around a public interest approach, the SSIRG has emphasised that the targeted allocation should be regarded being provided to secure both general, in terms of the HE sector, and specific, in terms of that institution, aspects of public interest and public value. As such, it would expect any institutions in receipt of such funding to be clear both about the specific public interest areas that they were addressing, and the general public interest issues including factors such as widening participation, student satisfaction, employment rates, quality of provision, and the national and international roles played by many of these institutions. The SSIRG would expect an explicit undertaking from institutions receiving the targeted allocation confirming that they would exercise their best efforts in relation both to the specific and general public interest aspects. Recommendation: That HEFCE should require each institution in receipt of a targeted allocation provide an indication of how they will address both the general and specific public interest issues.

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28. There is a further important assumption implicit in the approach to targeted allocations that the SSIRG is taking, and that relates to growth. The SSIRG does not believe that there is a strong or clear case for providing further HEFCE funds to support an increase in the types of provision offered by many of the institutions covered by this review, particularly in respect of the highly vocational performing arts provision such as acting, and dance. There is no evidence that employers in the sectors served by these institutions are demanding more graduates; their concern is more focused on the type of graduate and their range of skills. Overall, the SSIRG believes that supply and demand for graduates in the areas covered by the specialists is broadly in balance. However, this was not specifically a part of the SSIRG’s remit and there may be a need for further work in this area. 29. The SSIRG has concerns about another issue related to growth. Under the current institutional premium arrangements additional student numbers allocated to HEIs in receipt of a premium also attract premium funding. In general, the targeted allocation is seen as a specific addition to institutional funding to support the existing levels of activity. Given the points noted above about the overall level of some types of provision, the SSIRG suggested that HEFCE give serious consideration as to whether funding for ASNs should automatically include a targeted allocation element and we endorse this suggestion. Recommendation: That funding for additional student places in these institutions should be provided at standard levels of HEFCE funding. 30. In making recommendations for targeted allocations, the SSIRG is aware that a balance needs to be struck between providing some stability in the general funding environment, and ensuring that there is scope to respond to changing circumstances. The targeted allocation approach is predicated on such allocations being essentially strategic in nature. With this in mind, the SSIRG would expect the Funding Council to review each institution’s targeted allocation on a regular basis, and at least every five years, to ensure that they are still serving the purpose for which they were provided. Recommendation: That HEFCE undertake to review targeted allocations discussed in this paper at least every five years. 31. The SSIRG has paid close attention to the possible impact of these recommendations on the land based institutions. They have also taken account of the Land Based Studies Review published in the Spring of 2007, and the very full responses of these institutions provided to the SSIRG. Taking all these factors into account, the SSIRG does not see a strong case for significant changes to funding via the targeted allocation route at this stage, but would ask HEFCE to keep the position of this important area of provision under review to ensure that steps could be taken if there were a major threat to the sustainability of the provision. Recommendation: That HEFCE keep the land based studies area of provision under review.

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Financial implications 32. There are no major financial implications to implementing these recommendations as the majority of the funding is already provided via a small or specialist institution premium. It is also important to note that moving to a targeted allocation approach allows for much greater dynamism in the HEFCE funding approach, with the ability to respond more directly to a changing HE environment.

Risk implications 33. One risk associated with the recommendations about the future funding approach for institutions currently in receipt of an institutional premium of 10 per cent or less and/or a small institution premium is that some of them will be required to recruit additional students in order to come back within the contract range. We can mitigate this risk through adopting a flexible approach as to timescales over which the institutions need to return within the tolerance band. We have also already been in discussion informally with many of the institutions affected to test out their reactions, and generally it has been positive. 34. A further risk which is inherent in the whole targeted allocation approach is that it is potentially more dynamic in funding terms. As the basis on which we provide these targeted allocations becomes tied more closely to securing a public interest, changes in the external environment can be more easily reflected in these allocations. This could lead to more funding turbulence, but in many ways such a dynamic environment is one of the aims of the whole targeted allocation approach. To mitigate this risk we can adopt a flexible approach as to how we might implement any funding changes, either in terms of timescale or through identifying other sources of funding.

Sector impact 35. A full sector impact assessment has been carried out as part of the overall Teaching Funding Review work and there are no major negative implications for institutions or the sector arising from this work.

Public presentation 36. Should these recommendations be agreed we will need to communicate directly with the institutions concerned and the sector more generally. However, without the funding implications communication at this stage might not be very helpful. In view of this a general message will be sent indicating that in broad terms funding stability will be maintained, and that the detailed funding implications will be provided after the February HEFCE Board meeting. In addition, a formal report from the SSIRG will be made available to the sector by March 2008.

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Annex A

Small and Specialist Institution Review Group (SSIRG) We are presently reviewing the nature of our support for small and specialist institutions. This review will be overseen by an expert panel, chaired by Dame Janet Ritterman. The panel will review current definitions of small and specialist institutions and advise on the features of institutions and provision that should be recognised through targeted allocations. In undertaking this work, the panel will be in touch with every institution that presently receives the small or specialist premium. We expect the panel to report to the HEFCE Board by January 2008, in order to inform funding for 2008-09. SSIRG Panel Terms of Reference.

The role of the SSIRG panel will be to; ! Review current definitions of small and specialist institutions. ! Advise on the features of institutions and provision that should be funded

higher than the standard HEFCE rate through targeted allocations. ! Make recommendations to the HEFCE Board in the light of the review concerning;

o o o

The institutions to be included for targeted allocations; The funding criteria for targeted allocations to small and specialist institutions; The funding levels for targeted allocations to small and specialist institutions.

SSIRG members Dame Janet Ritterman

Chair

Professor Les Ebdon

University of Bedfordshire

Lesley Morris

Design Council

Linda Holbeche Professor David Green Rev Dr Richard Ralph

Work Foundation University of Worcester Independent Consultant

For further information please contact Derek Hicks: d.hicks@hefce.ac.uk, 01179 7460 or Sandy Jones: s.jones@hefce.ac.uk, 01179 31 7379


Annex B

Dear Small and Specialist Institutions Review As you may know, within HEFCE’s review of the teaching funding method there is provision for a review of the special funding that is attributed to small and to specialist institutions. Following an earlier consultation, HEFCE plans to move from the allocation of an institutional premium as a generalised way of supporting small and specialist institutions towards a system of targeted allocations. I have been asked to chair the Small and Specialist Institutions Review Group (SSIRG), an advisory panel established to make recommendations to the HEFCE Board about how to implement the targeted allocation approach. You will find information on the Small and Specialist Institutions Review Group, and on the whole teaching funding review, on the HEFCE website http://www.hefce.ac.uk/learning/funding/review/ssirg/. The key purpose of this part of the review is to recommend a basis and an allocation method for these targeted allocations. In conducting this review the SSIRG plans to draw on previous work undertaken – where the focus was significantly around identifying areas of additional cost (e.g. as described in the Sutherland, Hosier and Ralph Reports) – together with other existing information, such as HESA data. It is therefore not anticipated that further detailed work on costs of provision will be needed on this occasion. Instead the Review Group will focus mainly on the identification of key principles to underpin a funding approach. Among the main issues to be explored will be that of ‘public interest’, as it relates, for example, to the maintenance of a diverse sector, or of expertise in areas of strategic importance where the market alone is unlikely to provide sufficient funding for their long term sustainability. On these, and related issues, your advice will be most welcome. Therefore, as part of the interaction with institutions, you are invited to send comments on the following:

! What is your view on the aspects of a small or a specialist institution that should attract public funds over and above that provided through the mainstream HEFCE grant?


! What is your institution’s position as a small or a specialist institution within the higher education sector, and what are the specific aspects that you believe should receive additional public funds over and above that provided through the mainstream HEFCE grant?

! Do you have any further comments for the small and specialist review group regarding the small and specialist premium allocations? On 6th August will send you by email a document on which you are invited to respond with your comments. It would be helpful to receive these by 18th September 2007. The Review Group will use the comments and information that are collected during this exercise to help develop its thinking about criteria that could be used to determine how the targeted allocation approach is implemented. Members of the panel may wish to have further discussions with some institutions. Please indicate when emailing your comments whether you are willing to volunteer for this. HEFCE has been providing a range of briefings to institutions over the past few months to outline the general approach to the new teaching funding methodology. However, you may wish to clarify some points or have further questions. The HEFCE staff working on this are arranging a series of telephone surgeries for this purpose, so if you wish to book a time to speak with the team at HEFCE, please contact Sandy Jones on 01179 31 7379, s.jones@hefce.ac.uk. Yours sincerely,

Dame Janet Ritterman


Annex C

Specialist Institutions 2007 - 08

Institution

Guildhall School of Music & Drama Heythrop College Newman College of Higher Education School of Pharmacy Royal Veterinary College St George's Hospital Medical School College of St Mark & St John St Martin's College Trinity & All Saints Birmingham College School of Pharmacy Royal Veterinary College Writtle College Arts Institute at Bournemouth University College for the Creative Arts University College Falmouth University of the Arts London London Sch of Economics & Political Sci Norwich School of Art & Design Ravensbourne College School of Oriental and African Studies Harper Adams University College Leeds College of Music London Business School Institute of Cancer Research London Sch. of Hygiene & Tropical Med. Liverpool Institute for Performing Arts Rose Bruford College Royal Agricultural College Central School of Speech and Drama Institute of Education Courtauld Institute of Art Royal Academy of Music Royal College of Music Conservatoire for Dance and Drama Trinity Laban Royal Northern College of Music Cranfield University Royal College of Art University of London

%tage specialist institution premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.0% 0.0% 0.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 13.0% 20.0% 23.0% 25.0% 27.0% 27.0% 30.0% 35.0% 40.0% 60.0% 65.0% 75.0% 125.0% 130.8% 134.0% 140.0% 150.0% 155.0% 260.0% 305.0%

Specialist institution premium ÂŁ 0 0 0 0 0 0 0 0 0 0 0 0 0 921,837 2,366,954 1,057,793 5,152,779 1,479,845 595,073 630,682 1,182,097 1,768,048 697,414 553,409 256,658 889,294 788,946 1,104,901 1,440,441 1,982,044 3,087,328 758,819 2,572,441 2,958,999 5,807,762 5,001,835 4,047,380 8,464,836 8,501,594 1,391,187 65,460,396


Annex D

Specialist institutions with a 10% institution-specific premium Source: 2007-08 individual grant tables (from InfoBase), institution-specific premium on Table G set to 0.

Institution H-0197 Arts Institute at Bournemouth H-0206 University College for the Creative Arts H-0017 H-0024 H-0137 H-0190 H-0030

University College Falmouth University of the Arts London London School of Economic and Political Science Norwich School of Art and Design Ravensbourne College

Funding relating Percentage difference Current to the institution- without the premium percentage specific (assumed resource difference premium stays the same) -1.9% 921,837 7.7% -1.2% 2,366,954 8.5% -5.6% -2.9% -6.9% 1.1% -5.2%

1,057,793 5,152,779 1,479,845 595,073 625,699

Notes

Due to merge with Dartington in January 2008 and will no longer have a 10% premium (likely to be 3.6% around 18%) 5.7% 1.1% 10.4% 3.0%


Annex E

Small institutions and premium 2007 - 08 Institution Bishop Grosseteste University College University of Cambridge Norwich School of Art & Design University of Oxford School of Pharmacy Ravensbourne College Royal Veterinary College Writtle College

Funding relating to the small institution premium 107,899 3,025,579 99,275 4,796,616 225,572 357,887 414,692 113,112 9,140,632


Annex F Change to percentage differences after setting the institution-specific and small institutions premiums to zero

Bishop Grosseteste University College Norwich School of Art & Design School of Pharmacy Ravensbourne College Royal Veterinary College Writtle College

Original 2007Percentage Funding relating 08 Funding relating difference after to the small percentage to the institutionremoving the institution difference specific premium institution-specific premium (October) premium -5.0% 0 107,899 -5.0% 1.1% 595,073 99,275 10.4% 1.3% 0 225,572 1.3% -5.1% 630,682 357,887 3.2% -5.1% 0 414,692 -5.1% 4.6% 0 113,112 4.6%

Percentage difference after removing the institution-specific and small institution premium -2.8% 12.2% 5.8% 8.5% -3.3% 6.8%


Outcomes of the Small and Specialist Institution Review 1. This document sets out the outcomes of HEFCE’s review of funding for small and specialist institutions. These outcomes are informed by the advice of the Small and Specialist Institution Review Group (SSIRG) in consultation with small and specialist institutions and other stakeholders. It concludes that HEFCE funding plays an important role in protecting certain forms of provision but that additional funding is not required by all small and specialist institutions. It is for information only.

Background 2. In early 2007, HEFCE began a review of the additional funding received by small and specialist institutions. This took place within the context of HEFCE’s more general review of funding for teaching, described in HEFCE 2005/41 and HEFCE 2007/02. 3. The Small and Specialist Institution Review Group (SSIRG) was established in April 2007 to advise HEFCE in this process. The role of the SSIRG was to: a.

Review current definitions of small and specialist institutions.

b. Advise on the features of institutions and provision that should be funded higher than the standard HEFCE rate through targeted allocations. c. Make recommendations to the HEFCE Board in the light of the review concerning: i. The institutions to be included for targeted allocations ii. The funding criteria for targeted allocations to small and specialist institutions iii. The funding levels for targeted allocations to small and specialist institutions. 4. The SSIRG was chaired by Dame Janet Ritterman. Full terms of reference of the group, and its membership, can be viewed on the HEFCE web-site at www.hefce.ac.uk/learning/funding/review/ssirg/.

Consultation 5. In August 2007, the Chair of the SSIRG wrote to small and specialist institutions and other stakeholders, inviting them to comment on the following questions: a. What is your view on the aspects of a small or a specialist institution that should attract public funds over and above those provided through the mainstream HEFCE grant?

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b. What is your institution’s position as a small or a specialist institution within the higher education sector, and what are the specific aspects that you believe should receive additional public funds over and above those provided through the mainstream HEFCE grant? c. Do you have any further comments for the small and specialist review group regarding the small and specialist premium allocations? 6. Thirty-three institutions responded to these questions. Many of these responses discussed the additional costs that are incurred by small and specialist institutions. For instance, a number of respondents suggested that the provision offered by small and specialists is particularly expensive due to low student-staff ratios, or the use of top-ofthe-range technology. Some conservatoires highlighted the additional costs involved in auditioning students and in maintaining performance spaces that are open to the public. Other respondents noted that their costs are increased by the need to recruit staff with particular experience, and to work closely with small and medium-sized enterprises (SMEs). 7. Respondents also discussed the particular role of small and specialist institutions in the HE sector. Here various claims were made: some respondents argued that small and specialist institutions provide a particular type of environment for students because of their teaching style; their existence therefore protects student choice. Others argued that some small and specialist institutions contribute to innovation in the sector, and may be centres for excellence, nationally and internationally. Some respondents commented that many small and specialist institutions provide highly tailored provision, which produces graduates equipped to work in a variety of settings, including SMEs.

Outcomes of the Small and Specialist Review 8. In its deliberations, the SSIRG acknowledged that HEFCE funding plays an important role in protecting certain forms of provision. However, such additional funding is not required by all small and specialist institutions – in many cases, standard HEFCE funding is sufficient to enable them to deliver their aims. The group also agreed that there is a need to make any additional HEFCE funding transparent, and to ensure that it is more explicitly tied to the public value delivered by institutions in receipt of this funding. 9.

The SSIRG invited the HEFCE Board to agree: a. To remove the category of specialist institution from HEFCE’s approach to the funding of teaching, on the grounds that specialism, per se, is not sufficient grounds for the award of additional funding. b. That where an institution is in receipt of a specialist premium of 10 per cent, or less, this funding should be retained in their mainstream teaching grant. This will not reduce funding for these institutions. Depending on their position in the tolerance band it may, however, require the recruitment of additional students.

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c. That where an institution is in receipt of a specialist premium in excess of 10 per cent, this should be converted to an institutional targeted allocation for 2008 – 09. d. That HEFCE continues to develop the initial work on public interest and public value with a view to having a model applicable across the sector by 2010. e. That the small institution premium provided to Oxford and Cambridge be converted to a specific targeted allocation and reviewed in the light of any review of fees post 2009. f. That other small institution premiums be provided as part of mainstream grant. g. That HEFCE requires each institution in receipt of a targeted allocation to provide an indication of how they will address the general and specific public interest issues. h. That funding for additional student places in these institutions should be provided at standard levels of HEFCE funding. i. That HEFCE undertakes to review targeted allocations discussed in this paper at least every five years. j.

That HEFCE keeps the land-based studies area of provision under review.

10. These recommendations were accepted by the HEFCE Board in January 2008. The Board also requested that HEFCE should proceed immediately to examine the additional funding that will be awarded through the targeted allocations. The Board paper and minutes can be viewed on HEFCE’s web-site at www.hefce.ac.uk/pubs/board/2008/118/.

Future work 11. In February 2008, HEFCE began a review of exceptional funding for institutions (REFI). The aim of this review is to consider the circumstances in which institutions may be eligible for funding that falls outside HEFCE’s usual formulaic approach, focusing on those institutions that will receive an institution-specific targeted allocation in 2008-09 (listed in Annex A). A group formed on the basis of the SSIRG, and augmented by additional members, will advise the REFI. The terms of reference of this group can be found on the HEFCE web-site at www.hefce.ac.uk/learning/funding/review/refi.

Further information 12. Further information is available from Anna Sherratt, e-mail a.sherratt@hefce.ac.uk, tel 0117 931 7236, or Sandy Jones, e-mail s.jones@hefce.ac.uk, tel 0117 9317379.

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Annex A Institutions to receive an institutional targeted allocations in 2008-09 Central School of Speech and Drama Conservatoire for Dance and Drama Courtauld Institute of Art Cranfield University Harper Adams University College Institute of Cancer Research Institute of Education Leeds College of Music Liverpool Institute for Performing Arts London Business School London School. of Hygiene & Tropical Medicine. Rose Bruford College Royal Academy of Music Royal Agricultural College Royal College of Art Royal College of Music Royal Northern College of Music School of Oriental and African Studies Trinity Laban University College Falmouth University of Cambridge University of London University of Oxford Institutions whose premium will be added to their mainstream teaching grant Arts Institute at Bournemouth University College Birmingham Bishop Grosseteste University College University College Plymouth, St Mark & St John Cumbria Institute of the Arts (Now included in the University of Cumbria) Guildhall School of Music & Drama Heythrop College London School of Economics & Political Science Newman University College Norwich School of Art & Design Ravensbourne College RCN Institute Royal Veterinary College

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School of Pharmacy St George's Hospital Medical School St Martin's College (Now included in the University of Cumbria) Trinity & All Saints University College Falmouth University College for the Creative Arts University of the Arts London Writtle College

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Small and Specialist Institutions Review  

B8/08 Agenda item 10 24 January 2008 Recommendation(s) Issue 2. The Board is invited to agree: 3. Agreement of the general approach and prin...

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