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October 2005/41
Core funding/operations

Responses should be made by Friday 13 January 2006

Review of the teaching funding method

Consultation on changes to the method

This is a consultation on our plans for the method for allocating funds for teaching. Our goal is to create a method that provides institutions with stable and predictable funding through the introduction of variable fees. We aim to create a method that will improve the support and protection of our strategic priorities.

Outcomes of the first cycle of consultation

To: Heads of HEFCE-funded higher education institutions
Other relevant stakeholders
Of interest to those responsible for: Senior management, Finance, Governance
Reference: 2005/41
Publication date: October 2005
Enquiries to: Chris Taylor - Learning and Teaching
tel 0117 931 7264
Sean Mackney - Learning and Teaching
tel 0117 931 7486
Toby West-Taylor - Analytical Services
tel 0117 931 7286

Executive summary (read on-line)

Frequently asked questions


Consultation document

[ MS Word 237K | Zipped Word 82K | Adobe PDF 215K | Zipped PDF 164K ]

Executive summary


1.    This is a consultation that seeks agreement to a number of proposed alterations to our main formula funding method for teaching.

Key points

2.    We believe that we must review our funding methods in order to ensure that they remain robust. This document is the first formal consultation on the proposals we are making as result of this review process. We intend to conduct a further consultation in autumn 2006 on particular elements of the new method. We would welcome responses from all HEFCE-funded institutions and all relevant stakeholders. We intend to publish the outcomes of this consultation in March 2006.

3.    The consultation document outlines a two-cycle approach to the review of the funding method. The first cycle, which we expect to last at least until the outcome of the Government's review of fee income in 2009, will address issues that require attention and put in place the foundations for changes that may be required in the future. The second cycle will address changes that might be needed post-2009.

4.    The document sets our priorities for the funding method. In particular it considers:

  • the need for stability and predictability from HEFCE grant
  • our belief that we should support and protect strategic priorities through the funding method
  • the need for a simplified method.

5.    There a number of proposals relating to the current funding method, in the following areas:

  • premiums (paragraphs 43 to 51)
  • cost information (paragraphs 56 to 62)
  • subject weightings (paragraphs 63 to 67)
  • fee assumptions (paragraphs 68 to 77)
  • volume measures (paragraphs 78 to 101)
  • data sources (paragraphs 102 to 107)
  • part-time provision (paragraphs 108 to 114)
  • widening participation (paragraphs 115 to 118).

6.    Two events will be held as part of the consultation: in London on 9 December and Manchester on 13 December. Places are limited so early booking is advisable. Please contact Alison Felton for further information: e-mail, tel 0117 931 7078. We will also be running a dedicated seminar for further education colleges at the Association of Colleges' annual conference on 15-17 November.

Action required

7.    Responses to this consultation should be made by 13 January 2006, using the online form.

8.    We are aware that many of the issues considered in this document are complex. We will therefore be publishing a 'Frequently Asked Questions' guide in early November which will be built on as the consultation progresses. If you have any queries please contact Chris Taylor on to enable us to make this FAQ guide as useful as possible.