The document summarizes HEFCE's proposed approach to teaching funding for 2012-13, including: 1) Phasing out mainstream teaching grants for old-regime students over time using a scaling factor approach based on 2011-12 rates and student numbers. Allocations will be revised as new data becomes available. 2) Continuing targeted allocations for areas like widening participation but phasing out some other allocations over two years. 3) Introducing lower rates of teaching grant for new-regime students in high cost subjects for 2012-13, with amounts varying based on price group and London weighting. Allocations will also be revised as student number data is updated.

1. Teaching funding for 2012-13
Presented by:
Anna Sherratt, Senior Learning & Teaching Policy Adviser
Toby West-Taylor, Head of Funding

2. Estimated teaching grant 2012-13
£3,228M
Introduction of
Other targeted funding for high
allocations cost subjects
£271M, 6% £113M, 3%
WP £369M, 8%
Phase out of
mainstream T
grant £2,475M,
57%
Withdrawal of T
grant -£1,111M,
-26%

3. Three elements of teaching grant in
2012-13
• The phase-out of 2011-12 mainstream teaching
grant
• Applies to all categories of student, not just
those subject to regulated fees and student
support
• Targeted allocations, including for WP
• The introduction of funding for new regime students
in high cost subjects
• With lower rates of funding

4. The phase out of mainstream
funding for old-regime students (1)
Our aim for the phase out is to have an approach that:
• Is transparent
• Is fair and auditable
• Is recognisable, reflecting as far as possible the
parameters and measures previously used to
calculate the 2011-12 funding that is being phased out
• Does not introduce extensive new data collection
processes
• Minimises instability, by ensuring rates of funding
reflect current levels of grant and student
numbers

5. The phase out of mainstream
funding for old-regime students (2)
• Elements that will look familiar:
• Same concepts of price groups, modes, levels etc.
• Provisional allocation announced in advance, with
adjustments arising from subsequent
HESES/HEIFES and HESA/ILR data returns
• But some fundamental conceptual differences:
• No baseline rolling forward from previous year
• No tolerance band
• Fewer funding agreement targets: instead,
HESES/HEIFES and HESA/ILR used to
recalculate allocations from first principles

6. The phase out of mainstream
funding for old-regime students (3)
Funding rates x student volume x scaling factor
• Funding rates based on 2011-12 funding and
student population
• Institutional rates by price group, mode and
level incorporating London and partial
completion weightings and tolerance band
positions
• Initially derived from HESES/HEIFES11; revised
using HESA/ILR data for 2011-12

7. The phase out of mainstream
funding for old-regime students (4)
Funding rates x student volume x scaling factor
• 2012-13 Old-regime student volume:
• Initial allocation announced in March 2012 will
be like a payment on account, based on
2012-13 student numbers forecast in
HESES/HEIFES11
• Revised allocation announced in March 2013,
based on HESES/HEIFES12 student numbers
and revised funding rates using HESA/ILR data
for 2011-12
• Final confirmation in 2014 reflecting
2012-13 HESA/ILR student volumes

8. The phase out of mainstream
funding for old-regime students (5)
Funding rates x student volume x scaling factor
• Scaling factor:
• Necessary to ensure we remain within budget
available
• May be recalculated as part of revisions to
allocations arising from updated data

9. The phase out of mainstream
funding for old-regime students (6)
Why are recalculations necessary?
• We want funding to be phased out reflecting as
closely as possible the numbers of old-regime
students that are continuing
• We need to revise allocations as we get
increasing certainty about student numbers
• We want to avoid some institutions getting an unfair
advantage at the expense of others through
submission of unrealistic forecasts or inaccurate
data
• Data quality will be key and we will be
strengthening our verification and audit
processes

10. Consultation question 1
“Following the changes to
funding for higher education
agreed by the Government, we
need to phase out the
mainstream teaching funding
relating to old-regime students.
Do you have any comments on
our proposed approach?”

11. Non-mainstream funding: targeted
allocations (1)
• Allocations we expect to continue in 2012-13:
• Funding for widening participation and
improving retention (£369M)
• Institution-specific targeted allocation (£47M)
• Accelerated & intensive provision (£41M)
• Additional funding for very high cost &
vulnerable science (£23M)
• Clinical consultants’ pay (£18M), senior
academic GPs’ pay (£1M) and NHS
pension scheme compensation (£6 million)

12. Non-mainstream funding: targeted
allocations (2)
• Allocations that are “special cases” in 2012-13:
• Funding for co-funded employer engagement
will be phased out in a way that mirrors
mainstream teaching grant
• Part-time undergraduate targeted allocation will
have a reduced total budget (£52M) as we
phase out over two years the sum that was
added from 2009-10 arising from the ELQ policy
• A new targeted allocation to enable us to
continue to provide Erasmus fee
compensation to continuing students in
2012-13 and 2013-14 (£10M)

13. Non-mainstream funding: targeted
allocations (3)
• Allocations to be phased out in two equal
instalments from 2012-13 (showing 2011-12
budgets):
• Maintaining capacity in SIVS - ELQ
funding(£28M)
• Research-informed teaching (£9M) and
institutional learning and teaching strategies
(£28M) within TESS
• Transitional funding for ELQ students (£22M in
2011-12) will continue to be phased out as
previously planned

14. Consultation question 2
“Given the reductions to
HEFCE’s teaching grant from
2012-13, do you have any
comments on our proposal that
certain non-mainstream
allocations should be phased
out, and others continued as an
interim measure in 2012-13?”

15. Funding for new-regime students in
high cost subjects for 2012-13
• For 2012-13, relates only to students in price groups
A and B
• Lower rates of grant
• No tolerance band
• Only variation in funding rates by institution is
for London weighting
• Same iterative process of updating allocations
as 2012-13 new-regime student numbers are
updated
• We reserve the right not to count numbers
recruited in excess of medical and dental
intake targets or student number control limits

16. Indicative income for new-regime
full-time undergraduates
Basic rates excluding London weighting
HEFCE Price HEFCE Price HEFCE Price HEFCE Price
Group A Group B Group C Group D
Old regime (up to 2011-12 entry)
HEFCE teaching grant £13,335 £4,894 £3,426 £2,325
Regulated fee £3,375 £3,375 £3,375 £3,375
Total (2011-12 prices) £16,710 £8,269 £6,801 £5,700
New regime (from 2012-13 entry)
Approximate HEFCE £10,000 £1,500 0 0
teaching grant
Maximum regulated fee £6,000 - £9,000 £6,000 - £9,000 £6,000 - £9,000 £6,000 - £9,000
Total (2012-13 prices) £16,000 - £19,000 £7,500 - £10,500 £6,000 - £9,000 £6,000 - £9,000
These rates do not include non-mainstream teaching funding

17. Consultation question 3
“Following government changes to
funding for higher education, we
need to change the way HEFCE
provides teaching grant for new-
regime students. Do you have any
comments on our proposed
approach for 2012-13?”