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December 2009/45
Policy development

Responses should be made online by midday on 12 March 2010

Regulating higher education institutions as charities
Consultation on HEFCE's information requirements as principal regulator

This document sets out proposals on how higher education institutions (HEIs) are to provide information to HEFCE to enable us to fulfil our new statutory role as principal regulator of HEIs as charities.

To: Heads of HEFCE-funded higher education institutions
Chairs of governing bodies of HEFCE-funded higher education institutions
Of interest to those responsible for: Administration, Governance, Finance, Audit, Web-site development
Reference: 2009/45
Publication date: December 2009
Enquiries to: Andrew Malin
tel 0117 931 7332

Table of contents and executive summary (read online)


  • Executive summary
  • Background
  • The reason for this consultation
  • Information the Charity Commission collects, and what it publishes
  • Information about HEIs as charities
    • Information in the public domain
    • Other information needed by HEFCE as principal regulator
    • Public benefit reporting
    • Declarations and signatories
  • Sector impact assessment


  • Annex A Consultation questions and how to respond
  • Annex B Review of the Charity Commission's 'Annual Return/Update 2009' and 'Summary Information Return 2009'

Executive summary


1.   This consultation seeks views on our proposals about what information will be necessary to enable HEFCE to fulfil our new statutory role as principal regulator of higher education institutions (HEIs) as charities.

2.   The consultation also includes proposals about:

  • how HEIs publish certain information about themselves as charities, including how they deliver their charitable purposes for the public benefit
  • the accountable officer's responsibility for providing information on behalf of all of the HEI’s trustees (see paragraph 3).

We would welcome views from all HEIs, including the 18 that are registered charities.

3.   This consultation is being carried out in parallel with our consultation on revisions to the Financial Memorandum ('Revisions to Financial Memorandum: consultation on changes to the funding agreement between HEFCE and institutions', HEFCE 2009/46). Those revisions include the introduction of the term 'accountable officer' to replace 'designated officer', so we have used that term here for consistency. Decisions following this charity regulation consultation are likely to impact on parts of the Financial Memorandum. We will highlight these in our analyses of the responses to both consultations.

Key points

4.   Almost all UK HEIs are charities and benefit from the same tax concessions and other advantages as the rest of the charity sector. Many HEIs are also among the largest charities in the country. Yet neither fact is widely known or understood by the general public. This is partly because most HEIs in England and Wales are 'exempt' charities, which means they may not register with the Charity Commission (the Commission) and have been outside the scope of its powers as regulator of charities generally.

5.   While they will continue to be exempt charities, from early 2010 HEIs will be subject to many of the Commission's regulatory powers. At the same time, HEFCE will become the 'principal regulator' of HEIs that are exempt charities. As a principal regulator HEFCE will have one new duty: 'to promote compliance by the charity trustees with their legal obligations in exercising control and management of the administration of the charity'.

6.   One way we will do this is to extend our monitoring of the HEIs that are exempt charities. This will require us to ask for and review information not previously collected, or that we have previously collected for purposes other than charity regulation. This consultation presents our proposals about the additional information we will need as principal regulator.

7.   As a major funder of higher education (HE) in England we monitor HEIs to ensure their accountability for public money. For this purpose we already receive a lot of information from HEIs. We have analysed the information that the Commission currently collects to enable it to regulate registered charities. The analysis has led us to conclude that, given our specialist knowledge of the HE sector, our additional information requirements as principal regulator are relatively small and can be incorporated into our normal annual accountability review process.

8.   We believe the proposals outlined in this consultation:

  • represent the minimum new reporting requirements that are necessary to enable us to carry out our new responsibilities effectively
  • will enable HEIs' trustees to demonstrate that they are meeting their obligations both under charity law and to the public generally
  • take advantage of electronic communications to minimise the need for and handling/storage of paper.

9.   The Commission ensures that core information about the constitution, charitable purposes, and financial performance of registered charities is available to the public on its own web-site. We consider that equivalent information about HEIs should also be readily available to the public, but propose that it should be located and easily found on HEIs’ web-sites rather than our own.

10.   Registered charities are required by law to describe in their trustees' annual report how they have delivered their charitable purposes for the public benefit. We propose that, even though they are exempt charities, HEIs should include a similar description in the narrative section of their annual financial statements.

11.   In addition to the information on its web-site, the Commission collects and holds information about registered charities that it does not publish. In particular, it requires reports on all serious incidents that might have put a charity’s assets, beneficiaries or reputation at risk, or resulted in actual loss or harm.

12.   Our proposals on serious incident reporting by HEIs – which are very different from the Charity Commission’s expectations of registered charities – reflect the fact that we receive their audit committee annual reports as part of our existing accountability processes. We expect our proposals on serious incident reporting to generate the most comments in this consultation. If our proposals are not acceptable to the sector we are particularly interested in suggestions for an alternative approach.

13.   Finally, we propose to ask accountable officers for specific assurances, on behalf of all of the trustees, about their institution's compliance with charity law principles.

Action required

14.   Comments are invited on the proposals, using the online form, by midday on Friday 12 March 2010 (see Annex A).