1. Funding models and mechanisms
Peter Seddon
17 February 2011

2. 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

3. 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

4. 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?

5. Example – Foundation degree in a low cost subject
Full time learners – regulated fee at £3,290 in 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

6. 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

7. Growth in co-funded students
_______________________________________________________________________________________________________________________
growth in work-based students co-funded by HEFCE
9,300 in
19,800 in
35,000 in
growth in employer income
£4.2M in
£12.8M in

8. Co-funded students all institutions ___________________________________________________________________________________________________________________

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

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

11. 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

12. 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)?