Focus on few 'at risk' will benefit many

April 8, 2005

Institutions in England that are experiencing financial troubles will for the first time receive detailed assessments of their problems from funding chiefs.

Every year the Higher Education Funding Council for England identifies a small number - often only five or six - universities or higher education colleges considered to be at risk financially. But while the institutions have been notified that they are under special scrutiny, they have not received a full risk review from the funding council.

The move is part of Hefce's plan to be more transparent. By focusing on those in difficulty, Hefce hopes to administer a lighter touch to other institutions.

Formal reports will be delivered in the coming weeks. However, as in previous years, the list of institutions in financial difficulty will not be made public.

Writing in this week's Times Higher , David Young, chairman of Hefce, says:

"The time has come to share formally with institutions our risk assessments. We are writing to a small number setting out concerns and what we feel their managements and governors should be doing. These assessments are based on factors including student recruitment and retention, finances, audit, estates, human-resource strategies and governance issues."

Although institutions previously on the "at-risk" list would have been aware of this through regular finance meetings with Hefce, this is the first time that the vice-chancellor and chair of governors will be formally notified.

The aim is to make the amount of intervention from Hefce proportional to the perceived risk institutions face.

Philip Harding, director of finance at Westminster University and deputy chairman of the British Universities Finance Directors Group welcomed the changes. "The good thing is (the funding council is) looking where possible to use financial information we routinely produce for briefing managers and governors rather than asking us to reproduce it in another format."

But he warned that a more public statement of financial position could damage the credit rating of institutions that, for legitimate reasons, found themselves on the financial risk list.

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