1. How the main HEFCE teaching grant is calculated Thom Brain Funding Round Project Manager

2. Purpose of this session Explain how the data submitted in HESES are used in the mainstream teaching funding model Explain how the data submitted in HESES are used in the calculations of adjustments to grant Opportunity to ask questions

3. Overview of presentation Mainstream teaching grant: overview of funding method Funding agreements, recruitment and grant adjustments Examples General questions

4. Mainstream teaching grant: overview of funding method

5. Mainstream teaching grant: principles Similar activity is funded at similar rates, with variations based on explicit and justifiable reasons Institutions wishing to expand should apply to HEFCE for additional student numbers

6. Mainstream teaching grant: key terms Standard resource: A notional resource level calculated by our funding model Assumed resource: Actual HEFCE grant + our assumption of fee income Tolerance band: A 5% band around standard resource Migration: The process by which we move institutions that were originally outside the tolerance band to within it over an agreed period of time

7. Students funded by mainstream HEFCE teaching grant Home & EC students who are: –not funded by another EC public source –on a course open to any suitably qualified candidate –at least 0.03 FTE (approx 1 week full-time study) –on a recognised course of HE

8. Mainstream teaching: price groups A4(Clinical) B1.7 (Science, engineering & technology) C1.3(Other high cost subjects with a studio, laboratory or fieldwork element) D1(All other subjects)

9. Mainstream teaching: student-related factors FactorPremium Part-time students10% Students on foundation10% degrees Long courses (45 weeks +) 25%

10. Mainstream teaching: institutional factors FactorPremium Inner London8% Outer London5% Specialist institutionsVariable Small institutionsVariable Old & historic buildingsVariable

11. Mainstream teaching: calculation of standard resource Calculate total weighted FTE for each institution, using price group and student- related weights Multiply total weighted FTE by base price (standard unit price for 1 weighted FTE) Base price for 2006-07 is £3,721

12. Mainstream teaching: calculation of base price Calculate total mainstream resource (including fee income) for sector Calculate total weighted FTE for sector Base price is: Total resource Total weighted FTE Base price is recalculated each year

13. Mainstream teaching: assumed resource Assumed resource = HEFCE grant + assumed fee income Mainstream HEFCE grant rolls forward from one year to the next, with adjustments for, for example: –Inflation –Holdback, ASN funding, transfers –Migration Fee assumptions per FTE for 2006-07: –FTS and PT UG£1,200 –SWOUT UG£1,200 –PGT subject to regulated fees£1,200 –Other FT PGT£3,721 –Other PT PGT£4,093

14. Mainstream teaching: migration We express the difference between assumed resource and standard resource as a percentage of standard resource We want an institution’s assumed resource to be within ±5% of standard resource Migration through additional funding (for those below the band) or increasing student numbers (for those above it) Institutions are only eligible for migration funding to the extent that their position outside the tolerance band is due to changes to the funding method, rather than their own recruitment behaviour

15. Funding agreements, recruitment and grant adjustments

16. Funding agreements Three controls: –The contract range –Funding conditional upon delivery of growth –The medical and dental contract FTE (CFTE)

17. The contract range (1) Applies to all institutions Expressed as percentage range –for example: -5% to +5% Refers to the percentage difference of actual (assumed) resource to standard resource –does not mean the percentages by which institutions can vary their overall recruitment levels

18. The contract range (2) We use HESES data to: –Recalculate 2006-07 standard resource –Recalculate 2006-07 assumed fee income –Recalculate 2006-07 assumed resource We compare recalculated standard and assumed resource If new percentage difference is outside contract range, institution may be liable to holdback –For 2006-07, holdback only for those above their contract range Institutions also have second chance to recover 2005-06 contract range holdback if its reinstatement keeps the institution in its contract range

19. The contract range (3) Compliance with the contract range is affected by: –Overall recruitment levels –The mix of students between price groups –The mix of students between modes –The mix of students between levels A template is available to help institutions assess the effects of different recruitment positions

20. Funding conditional upon delivery of growth (1) Applies to institutions that are expected to increase recruitment in 2006-07 as a result of a successful bid for additional student numbers Expressed as FTE targets for total HEFCE- fundable student numbers Holdback of ASN funding if targets not met Institutions get two chances to deliver growth

21. Funding conditional upon delivery of growth (2) Baseline FTEs First (lower) target: to recover ASN funding previously deducted for not delivering sufficient growth in 2005-06 Second (higher) target: to avoid holdback of 2006-07 ASN funding

22. Funding conditional upon delivery of growth (3) Academic year

23. Funding conditional upon delivery of growth (4) Baseline FTEs go up: –To reflect additional funded places delivered the previous year –For other additional funded places awarded outside the mainstream bidding exercises (eg for medical intakes or ITT diversification) –For institutional transfers Baseline FTEs go down: –For institutional transfers

24. Grant adjustments Grant adjustment rules published in July Provisional grant adjustment reports issued in December Institutions have opportunity to appeal in January Final grant adjustment reports issued in February