Funding models and mechanisms Peter Seddon 17 February 2011

HEFCE teaching funding method ___________________________________________________________________________________________________________________ Some principles: Block grant Zero sum Similar resources for similar levels of activity Growth in workforce development – growth in per student funding (additional student numbers) New co-funding mechanism – linked to main teaching funding method, but separately funded and monitored Growth in co-funding – not unlike a mini block grant

Differential funding rates to reflect costs of teaching, and fee income ___________________________________________________________________________________________________________________ Level of award Foundation degree Undergraduate degree Postgraduate degree Subject groupings (price groups) Price group A – Medicine, Dentistry, Veterinary Science Price group B – Science & Engineering courses Price group C – Architecture, Languages, Maths, IT Price group D – Arts, Humanities, Social Sciences, Management

Three existing identifiable funding models that could be supporting workforce development ___________________________________________________________________________________________________________________ HEFCE ‘fully funded’ (core/growth) e.g. NW HLSP HEFCE ‘co-funded’ Employer fully funded Does the student/employee pay?

Example – Foundation degree in a low cost subject Full time learners – regulated fee at £3,290 in 2010-11 Part time learners – fees are not regulated Employer fully funded HEFCE ‘co-funded’ HEFCE ‘fully funded’ £3.2k Tuition fee Tuition fee Employer funded (Full or part employer financed) Employer co-funding £3k-£4k HEFCE funding HEFCE co-funding

Approximate rates of HEFCE full funding – per full time equivalent ___________________________________________________________________________________________________________________ Price Groups   A B C D FD N/A £6k-£7k £4-5k 3.5k UG £14k-£17k £5k-£6k £4k £3k PGT £12k-£14k £3k-£3.5k £1.5k £0-£1k Level

Growth in co-funded students _______________________________________________________________________________________________________________________ growth in work-based students co-funded by HEFCE 9,300 in 2008-09 19,800 in 2009-10 35,000 in 2010-11 growth in employer income £4.2M in 2008-09 £12.8M in 2009-10

Co-funded students 2009-10 - all institutions ___________________________________________________________________________________________________________________

Employer income (co-funding contributions) – public sector ___________________________________________________________________________________________________________________

Employer income (co-funding contributions) – private sector ___________________________________________________________________________________________________________________

From August 2012 ___________________________________________________________________________________________________________________ HEFCE teaching funding phased out (including co-funding) New entrants recruited under the new fees system Higher fees of up to £9k No or little HEFCE funding New students support arrangements including for PT students Repayment triggered at £21k salary, longer (?) repayment period A largely student driven system Full cost recovery for employer led provision

Suggested topics for discussion ___________________________________________________________________________________________________________________ In the context of changing HE policy: HE sector question Identify existing models of workforce development that will work in the new fees system Identify areas of employer engagement activity that will require more innovative approaches to be successful in the new system Employer perspective To what extent will student choice align with the graduate skills employers want? In what ways will employers continue to engage with HE (consider differences across businesses (large, medium, small), and the public sector)?