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London Conference - Juliet Chester - Higher Education Policy
 

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  • Central and devolved decisionsReforms to teaching funding and fees – key policy interventions Tuition fees: the emerging UK pictureSummary of reforms to funding and student number controlsChanging sources of financeImpact on the public financesImpact on unit of funding for HEIsImpact on student recruitment

London Conference - Juliet Chester - Higher Education Policy London Conference - Juliet Chester - Higher Education Policy Presentation Transcript

  • Higher education policy and theimplications of the funding reformsAUA London Jubilee Conference, 6 December 2011Juliet ChesterHead of policy and data analysis, Universities UK
  • Contents1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 2
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 3
  • Central and devolved decisions Combination of partially devolved decision-making and cross-UK impact Westminster govt Devolved administrationsFee policyStudent numbersStudent financeFunding council (T and R)Research CouncilsQuality assuranceImmigration/Visapolicy = policy decisions relate directly to all = policy decisions relate directly to UK HEIs HEIs in home nation 4
  • Reforms to teaching funding and fees (1/2) – key policy interventions in England 2010 2011 Summer Autumn Winter Winter Spring Summer Autumn Chancellor’s AutumnFiscal mandate Emergency Spending Budget statement budget Review HE WhiteReform agenda Response Paper: to Students at Browne the heart of Review the system Regulatory framework consultation Fees OFFA HEFCE T Outcomes of HEFCE TImplementation legislation guidance funding funding consultation consultation 5
  • Reforms to teaching funding and fees (2/2) – summary of developments in the devolved nations– Scotland, • Additional £135.5million per year • Average fee of £6,841 for students from the rest of the UK– Wales • Fee grants for Welsh students in Wales and rest of UK, likely to cost over £1bn over next 5 years • Other students in Wales to be charged up to £9,000– Northern Ireland • Tuition fee levels maintained for home students • Other students in NI to be charged up to £9,000 • Loans for NI students in rest of UK up to £9,000 6
  • Tuition fees: the emerging UK picture Illustrative maximum WHOLE COURSE charges for full-time undergraduates 1998 2001 2006 2008 2010 2012England £3,000 £3,225 £9,000 £9,435 £9,870 £27,000 [£10,395]Wales £3,000 £3,225 £3,600 £9,435 (£3,765) £9,870 £27,000 (£10,395)Northern Ireland £3,000 £3,225 £9,000 £9,435 £9,870 £27,000 (£10,395) £3,225 £36,000Scotland £3,000 (£4,000) £2,000 £6,800 £2,289 £6,800 £7,280 [10,395]KEY Upfront fee with means-tested discounts for all UK students Regulated variable fees + fee grants for home country and non-UK EU students Graduate endowment for home country students + upfront fee with means-tested discounts for rest of UK (RUK) students Flat-rate fee with loan for RUK students only Regulated variable fees supported by income-contingent loan Regulated variable fees + fee grants for some with same maximum for all UK students RUK students Flat-rate fee with income-contingent loan Regulated variable fees + reduced fees for Figure in WHITE is maximum tuition charge for a three–year course in England, Wales and Northern home country and non-UK EU students Ireland or a four-year non-medical course in Scotland (real terms for illustrative entry year). Amount in round brackets is the maximum charge for students from the home country and non-UK EU students; amount in square brackets is reduced amount for some RUK students Voluntarily capped fees for RUK students only Figure in BLACK is estimated payment through a compulsory graduate endowment + fee grants for some RUK students 7
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 8
  • Summary of reforms to funding and student number controls• Changes to basic and higher fee amounts – 149 institutions with access agreements (December 2011) – Average net fee of £8,161 in July 2011, £8,071 in December 2011• Reduction in HEFCE funding – c. £2.9 billion by FY2014/15 – c. £1.1 billion in AY2012/13• HEFCE funding reforms – 2012/13 a transitional year• New student number controls to promote dynamism – AAB+ – Price-related margin 9
  • Changing sources of funding (1/3): balance of teaching funding Indicative breakdown of funding between loans for the graduate contribution and HEFCE teaching grant between 2010/11 and 2014/15 100% 90% 80% 70% Loans outlay to HEIs 60% 50% Teaching grant (adjusted baseline) 40% 30% 20% 10% 0% 2010/11 2011/12 2012/13 2014/15Notes(1) Uses figures provided in the HEFCE grant letter of 20 December 2010 (Annex and paragraph 12)(2) Only broad indicative figures are given for 2014/15 (Teaching grant of £2 billion and loans of £7 billion 10
  • Changing sources of funding (2/3): Impact on the public financesThe cost of higher education to the public purse is now more significantlyinfluenced by:• The take-up of tuition fee loans• Interest and write-off policies• Repayment behaviour• Graduate earnings growth and earnings profiles• Cash flow implications in shift from block grant (financial year) to loan funding (academic year)• These considerations have all influenced government policy to date, including student number control policies• Future decisions may yet be affected (e.g. final HEFCE grant) 11
  • Changing sources of public funding (3/3): Impact on institutions• Already managing impact of Spending Review decisions – HEFCE recurrent: c.£190 million for AY2010/11; c.£750 million for AY2011/12 – HEFCE capital: 58 per cent cash terms reduction in HEFCE capital funding• Reduction in core student numbers• Funding more closely linked to actual undergraduate numbers• Increased funding at stake through successful negotiation of access agreements• Cash-flow and administrative implications in shift from HEFCE grant payments to student loan instalments• Impact on taught postgraduates• Further income diversification? – Alternative forms of student finance 12 – Alternative sources of capital
  • HEFCE capital funding for institutions HEFCE capital funding for institutions - real terms (2011/12 = 100) [1] 1,200 1,000 800£m 600 400 200 - 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Financial year [2]Notes[1] HEFCE capital grant to institutions is TCIF and RCIF in 2008 to 2011 and TCIF2 and RCIF2 in 2011 to 2013[2] £250 million of allocated capital was brought forward from 2010/11 to 2008/09 and 2009/10 13
  • Impact on institutions - diversity of provision Distribution of UK/EU UG, UK/EU PG and non-EU students by institution, 2009/10100%90%80%70%60% Non-EU students50% UK/EU postgraduates UK/EU undergraduates40%30%20%10% 0% 14
  • Impact on unit funding for institutions: HEFCE funding for new system students: high-cost subjects For 2012/13 (£113 million available) • Premium for Price groups A and B retained Reduction (£) by level of study and price group Reduction (%) by level of study and price group£3,500 100% 90%£3,000 80%£2,500 70% 60%£2,000 50%£1,500 40%£1,000 30% 20% £500 10% £0 0% PGT - B UG - C (FT) UG - B PGT - A PGT - D UG - A UG - D PGT - C (non- UG - C (FT) UG - D PGT - D PGT - C (non- UG - A UG - B PGT - A PGT - B regulated) regulated) Comparisons are made here between March 2011/12 notional grant rates and the illustrative sector average rates for 2011/12, but note that the whole system is changing – shift from tolerance band to funding based on actual student profile From 2013/14 (subject to further consultation) • New funding supplements informed by TRACT(T) data 15 • Possible linking of funding rates to the fee charged
  • Impact on student recruitment: the AAB+ student population• Under-representation of disadvantaged groups in the AAB+ population: Low participation neighbourhoods Per cent of young entrants with AAB+ Per cent of all young entrants NS-SEC 4-7 0 10 20 30•Risks to opportunities for some groups of students – counter toGovernment’s social mobility policy aims?•Outcomes depend on institution and student behaviour, and any further 16policy interventions
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 17
  • Summary of proposals• HEFCE to have redefined role as lead regulator and ‘student champion’• Single funding framework for student support and grant funding across higher education providers• Move towards risk-based financial and quality assurance (subject to separate consultations)• Simplification of the degree awarding powers process• Removal of barriers to non-teaching bodies being able to award taught degrees• Introduction of a sanction to suspend or remove degree awarding powers, however granted• Review of the use of university title so that there are fewer barriers for smaller institutions 18
  • UUK’s response• Core elements of UK system’s success need to be protected: – High quality and standards – Institutional autonomy – Co-regulation• Welcome risk-based approach alongside a single regulatory framework• Some proposals need further work to determine how they will be implemented, for example: – HEFCE’s role as ‘student champion’ – relationships between regulatory bodies 19
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 20
  • Research and innovation• Science and research ring fence – £4.6 billion• Research capital (HEFCE and research councils) cut by over 50% in December 2010• Recent announcements: additional £250m for specific projects and £360m for life sciences• Trend towards further concentration of research and innovation funding• Impact and public engagement• Research and innovation strategy to be launched Thursday 8 December 21
  • Immigration 22
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 23
  • Short-term timetable of data availability and policy interventionsWestminster Government 2011 2012 Autumn Winter Winter Spring Early indications ofPublic finances Autumn statement student finance commitments Office for Budget Responsibility Fiscal Budget Forecast HEFCE consultation Grant letter to Student numberFunding for outcomes HEFCE allocationsinstitutions Early indications of Firmer indications ofStudent numbers demand demand Bidding process for 24 20,000 places
  • What do we need to monitor?Student opportunities• Level and patterns of demand among different student groups – Including intra-UK flows• Changes in offers and acceptances• Changes in course provisionFunding implications• Government progress against deficit reduction plans• Take-up of loans – Government has modelled an average £6,800 per student but forecast to be £7,000• Eligibility for maintenance grants – Note that funding for grants and HEFCE grant form part of the HE budget , which has to be reduced by c.£3 billion as part of Spending Review commitments – Any overspend on grants has direct implications for HEFCE funding 25
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 26
  • Conclusion• A period of transition – Long-term trend and aspiration is towards a more deregulated sector – Short-term reality is increased intervention, complexity, and adjustment, with potential risks to student opportunities and strength of UK brand that will need to be carefully managed• Successful navigation of this transitional period could bring opportunities for effective change – streamlining data and information flows – more innovative ways of engaging with students – strong institutions through further diversification of income• Promoting understanding of the impact of change will be central to UUK’s activity – continuing to draw on sector expertise to make sure the implications are understood – monitoring and influencing change and future policy development 27
  • 1. Policy context2. Implications of teaching funding reforms in England3. Changes in the regulatory landscape4. Other policy developments5. UUK’s role in policy impact monitoring6. Conclusion7. Questions for discussion 28
  • Questions for discussion1. What can we do to better communicate changes in the policy environment to administrative staff in higher education institutions?2. Which changes to policy are likely to be the most difficult for your institution to manage, and why?3. What policy changes would you most like to see in the short term?4. Are there other themes you think we could use for publications similar to ‘Driving economic growth’? 29
  • Contact details• Dr Juliet Chester – Head of policy and data analysis, Universities UK• juliet.chester@UniversitiesUK.ac.ukUniversities UKWoburn House, 20 Tavistock Square, Londonwww.UniversitiesUK.ac.uk 30