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Withdrawal of funding for equivalent or lower qualifications (ELQs)

Frequently asked questions

This page will be updated regularly to answer questions commonly asked by institutions.

Last updated 11 December 2007

Contents

  1. Does the ELQ policy affect other HEFCE funding streams?
  2. How will the Department for Innovation, Universities and Skills use the money saved from withdrawing funding for ELQs?
  3. Does the ELQ policy affect other UK countries? Does it affect other funding bodies?
  4. How many students are presently studying for an ELQ?
  5. How can you make savings of 100 million while maintaining institutions' recurrent teaching grants in cash terms?
  6. Will the ELQ policy affect my institution's position in the tolerance band?
  7. Suppose that a student studies towards an honours degree for one year, before withdrawing from their course. Would they then be eligible for HEFCE funding if they enrol again for an honours degree, perhaps at a different institution?
  8. Are there any exemptions to the ELQ policy?
  9. How has HEFCE determined its proposed exemptions?
  10. Why are you not exempting strategically important and vulnerable subjects?
  11. Will HEFCE consider additional exemptions to the ELQ policy?
  12. How does the 'safety net' work?
  13. Does the modelling provided on the HEFCE web-site reflect how you intend to calculate the grant adjustments relating to ELQ students?
  14. We made an error in our 2005-06 individualised data, which will affect the adjustments to grant made for the ELQ policy. Can we correct it?
  15. Why do you assume that a proportion of students with unknown entry qualifications will be aiming for an ELQ?
  16. Have you considered the impact of the ELQ policy upon different groups of students, understood in terms of disability, gender, race or age?
  17. Where can I find the Student Fees Regulations and Student Support Regulations?
  18. Can the implementation be delayed or deferred to give us more time to plan?
  19. Rather than withdraw funding from institutions, couldn't HEFCE ask institutions to redistribute funding internally from ELQ students to students who are new to HE?

1. Does the ELQ policy affect other HEFCE funding streams?

We are not looking to reduce the total funding allocated to the sector through other funding streams on the basis of the ELQ policy. We will consider our budgets for such other funding streams once we have received our grant letter from the Department for Innovation, Universities and Skills. But the ELQ policy will affect the number of HEFCE-fundable students present at institutions; this means that the policy will also affect the distribution of grant between institutions of HEFCE funding streams based on taught student numbers. We expect this to apply for future allocations informed by student numbers for 2008-09 and beyond. This includes the widening participation allocations and formula capital funding. It also includes the new targeted allocations which will be introduced in 2008-09, to reflect additional costs in HEFCE priority areas. We have not attempted to model the impact of the ELQ policy on these funding streams, as these may be influenced by a number of factors in coming years, including changes in student numbers and their characteristics.

Quality-related research (QR) funding will not be affected by the ELQ policy. This means that the policy will not impact on students who are studying for a postgraduate degree by research.

2. How will the Department for Innovation, Universities and Skills use the money saved from withdrawing funding for ELQs?

The Secretary of State has confirmed that any savings made from withdrawing funding for ELQs will be available for HEFCE to redistribute according to agreed priorities yet to be decided. The Government has also stated that 100 million a year of higher education funding will be reprioritised to increase and widen participation, by focusing public funding mainly on students participating in the system for the first time. Final decisions on the distribution of our overall budget will be made once we have received our grant letter from the Secretary of State. Our expectation is that some additional funding will be available for growth.

3. Does the ELQ policy affect other UK countries? Does it affect other funding bodies?

We have been given no indication that the ELQ policy will extend to Scotland, Wales or Northern Ireland. Neither are we aware that it will apply to other bodies that fund higher education, such as the Training and Development Agency for Schools or the Department of Health.

4. How many students are presently studying for an ELQ?

The modelling that we have provided on our web-site shows that, in 2005-06, approximately 8 per cent of HEFCE-funded full-time equivalent student numbers were aiming for an ELQ. Of this 8 per cent:

  • 2 percentage points relate to students who will be exempt from the general policy, because they are aiming for a foundation degree or are covered by exemptions arising from the Student Fees Regulations and Student Support Regulations
  • approximately 0.7 percentage points relate to those aiming for a qualification in a strategically important and vulnerable subject.

5. How can you make savings of £100 million while maintaining institutions' recurrent teaching grants in cash terms?

As requested by the Government, we will be reducing funding for ELQs by approximately £100 million by 2010-11. We are also proposing to provide 'safety net' funding, which will ensure that no institution's recurrent mainstream teaching grant falls below its comparable 2007-08 level. These plans are compatible because we can maintain institutions' teaching grants in cash terms while still making real-term reductions. Suppose, for instance, that a hypothetical institution has a teaching grant of £100 million, and that inflation is expected to be 2.7 per cent per annum. By maintaining this institution's grant at £100 million we would make real-term savings of £8.3 million over a three-year period. In other words, £8.3 million is the sum that we would have allocated if we had uplifted the institution's grant with inflation.

6. Will the ELQ policy affect my institution's position in the tolerance band?

Those institutions affected by the ELQ policy will see changes to both their mainstream teaching grants, and to their HEFCE-fundable student numbers. In general terms, this will lead to similar adjustments to both standard resource and assumed resource, meaning that changes to institutions' positions in the tolerance band will be kept to a minimum. But some movement within the tolerance band arising from the ELQ policy, or other changes to the teaching funding method, can be expected for institutions. 2005-06 data will, moreover, inform our implementation of the policy but the student populations at institutions change annually; this may mean that the changes to HEFCE-funded student numbers that we estimate for the purposes of the 2008-09 grant tables are different from the figures institutions actually report in the student number surveys they submit to us for the year.

7. Suppose that a student studies towards an honours degree for one year, before withdrawing from their course. Would they then be eligible for HEFCE funding if they enrol again for an honours degree, perhaps at a different institution?

It is the highest qualification achieved that matters for the purpose of the ELQ policy, not the amount of time spent studying towards a given qualification. The hypothetical student described above would therefore be eligible for funding (provided of course that they meet other HEFCE funding constraints).

8. Are there any exemptions to the ELQ policy?

We are proposing to exempt all foundation degrees and all students that will count towards delivery of co-funded additional student numbers that are outside the mainstream teaching grant. We are also proposing a number of further exemptions, to ensure that the ELQ policy is consistent with the Student Fees Regulations and Student Support Regulations. These exemptions cover subject areas such as undergraduate medicine and dentistry, social work and teacher training. In addition, the new targeted allocation for strategically important and vulnerable subjects will protect funding in these areas. For a detailed explanation of the exemptions to the ELQ policy, see our consultation document (HEFCE 2007/27) and the explanatory notes produced to accompany the modelling of the impact of the ELQ policy.

9. How has HEFCE determined its proposed exemptions?

We have proposed exemptions when they:

We have, when possible, exempted from the ELQ policy courses that are treated as special cases in the Student Fees Regulations and Student Support Regulations. This avoids an undesirable situation in which certain courses experience a reduction in funding which cannot be recovered through charging increased fees.

10. Why are you not exempting strategically important and vulnerable subjects?

Although we have not exempted strategically important and vulnerable subjects (SIVS), we are providing a new targeted allocation for SIVS, calculated on the basis of ELQ numbers. This allocation will ensure that funding for teaching SIVS is largely protected from the ELQ policy. The approach we are taking limits the extent to which the subject code of a student's qualification (JACS code for higher education institutions, learndirect code for further education colleges) might in future determine the definition of HEFCE fundability. It also allows us a clearer basis for reviewing periodically the overall package of support that we are providing for SIVS.

11. Will HEFCE consider additional exemptions to the ELQ policy?

We are considering requests for additional exemptions made through the consultation process. But two points should be noted:

  1. Our strategy has been to base our interventions on existing policies agreed by ourselves or by the Government - that is, to target areas of provision that, for a variety of reasons, are already considered special cases for some purposes. We do not believe that it would usually be appropriate to designate other courses/areas as requiring special treatment, solely in response to the ELQ policy.
  2. We have been requested to make savings of £100 million in the next three years. Clearly, this means that there are limits to the number of students that we can exempt from the policy. In particular, introducing additional exemptions may reduce the funding that we have available for other forms of mitigating action.

12. How does the 'safety net' work?

We will provide safety net funding to ensure that no institution's grant falls below a comparable 2007-08 level as a result of the ELQ policy. We will perform this calculation on a like-for-like basis. For instance, if an institution's grant were due to fall in cash terms as a combined result of holdback and the ELQ policy, we would aim to provide safety net funding to recognize the cash reduction directly attributable to the ELQ policy. The safety net will remain in place until 2010-11. Beyond this point, it will be subject to review in the light of future spending review settlements.

13. Does the modelling provided on the HEFCE web-site reflect how you intend to calculate the grant adjustments relating to ELQ students?

The modelling reflects our current proposals for implementing the ELQ policy. How we actually come to implement the policy will depend on our Board's decisions in January 2008, in the light of the consultation responses we receive and our forthcoming grant letter from the Department for Innovation, Universities and Skills.

Overall, we think the modelling highlights effectively the possible impacts on areas of provision. But the modelling, in some detailed areas, may not provide the best reflection of student characteristics and activity that we are currently funding at individual institutions. These areas relate mainly to unresolved data issues that we intend to resolve before implementing the policy in our 2008-09 allocations. They include:

  1. Full incorporation of HEFCE-recognised funding consortia. At present, the 2005-06 individualised HESA/ILR data submitted only by the lead institution - not by the other consortium members - has informed the modelling for these consortia. This may mean that the proportions of identified ELQ students, exempt or ones aiming for a SIVS qualification, may not reflect the full profile across the consortium.
  2. Areas where provision has transferred between institutions since the 2005-06 data were submitted. For example, where a higher education campus has transferred from one institution to another, we have used the 2005-06 individualised data relating to that campus to inform the modelling for the institution that originally submitted that individualised data, rather than the institution to which the campus has subsequently transferred.
  3. Incorporation of amendments that institutions may have already made to their 2005-06 individualised data since these were originally submitted. These amendments may have been submitted in response to our data reconciliation exercises; or to correct the underlying data used to inform our widening participation allocations; or for some other reason.

14. We made an error in our 2005-06 individualised data, which will affect the adjustments to grant made for the ELQ policy. Can we correct it?

If institutions believe they have made an error in their 2005-06 individualised data, they may request in writing our agreement to their submission of data amendments. But, in these circumstances, we reserve the right to review all the individualised data submitted by the institution, not just the areas where they wish to submit amendments. This may include our use of linking between student/learner records to identify where there is evidence of recent higher education experience for individual students. Further details about this process will be made available at a later date.

15. Why do you assume that a proportion of students with unknown entry qualifications will be aiming for an ELQ?

It would clearly be wrong to assume that all students with unknown entry qualifications do not have a prior ELQ and likewise to assume they do. What we know about students' previous higher education qualifications by linking to earlier HESA/ILR returns, suggests that this assumption generally provides a more accurate overall assessment of the impact of the ELQ policy on individual institutions.

16. Have you considered the impact of the ELQ policy on different groups of students, understood in terms of disability, gender, race or age?

The Department for Innovation, Universities and Skills has confirmed that they will undertake an assessment of the impact of the ELQ policy on different groups as part of their assessment of the Comprehensive Spending Review agreement for teaching in higher education. Since HEFCE's role is to implement the ELQ policy, we will focus on assessing the impact of our plans for implementation - including our proposals to introduce certain exemptions or protections. The Board will consider this assessment in January 2008. Institutions, or other stakeholders who are concerned that the ELQ policy may impact differentially on different groups were invited to communicate this to us via the consultation process.

17. Where can I find the Student Fees Regulations and Student Support Regulations?

The Student Fees Regulations and Student Support Regulations mentioned in questions 4, 8 and 9 are available on the Office of Public Sector Information web-site:

18. Can the implementation be delayed or deferred to give us more time to plan?

The Department for Innovation Universities and Skills asked us to achieve two aims - to withdraw funding from students studying ELQs, and to secure savings of £100 million by 2010-11 for redistribution to students considered higher public priority (those, for example, entering higher education for the first time). Our proposals for implementation address both aims. If we were to delay implementation, we could not make the savings requested without removing some of the exemptions to the policy that we are currently proposing.

Although the policy will be implemented in 2008-09, our plans for implementation are designed to give institutions a chance to adapt to this change in the funding regime. The transitional funding for ELQ students already in the system will ensure that the impact of the policy is phased - significant savings at the sector level will not be made until 2009-10. In addition, our safety net funding will ensure that no institution will lose funding, in cash terms, as a direct result of the ELQ policy.

19. Rather than withdraw funding from institutions, couldn't HEFCE ask institutions to redistribute funding internally from ELQ students to students who are new to higher education (HE)?

This approach would prove difficult, as we could not guarantee the savings requested by the Government. We would also need to put in place rigorous student number targets in order to ensure that institutions recruit new entrants to replace their ELQ students. The process of monitoring these would be burdensome for institutions, and institutions would be subject to holdback if they did not achieve them. There is therefore no guarantee that this proposal would increase financial stability for institutions.

It is also unclear whether this approach would serve the Government's aims. One of the stated aims of the ELQ policy is to divert funding from students studying for an ELQ to students who are entering HE for the first time. Given the distinct mission of institutions, some redistribution of funding between institutions may be necessary in order to achieve this aim.

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