Missing variations on a funding theme with a bitter twist of experience

January 27, 1995

It was characteristically generous of Peter Knight (THES, January 13) to acknowledge, as we have been reassuring him for three years, that the Higher Education Funding Council for England's funding method for teaching is even-handed between institutions from both sides of the previous binary line. However, the method that he adopted to show the differences in funding between institutions could be substantially normalised, and the policy implication that he draws is questionable.

Dr Knight's method does not correct fully for variations due to subject mix, and in particular for the different spreads in average units of council funding (AUCFs) around the mean in each academic subject category (ASC). Whereas in engineering, for full-time taught subjects, the mean departure from the average AUCF is of the order of Pounds 625, for pre-clinical medicine the mean deviation is of the order of Pounds 250. This is not surprising. Pre-clinical medicine courses tend to be fairly similar, whereas an institution with a large department of nuclear engineering is likely to be more expensive than one specialising in general engineering. Dr Knight compounds the effect of this by summing the absolute variations from the mean in all subject categories instead of allowing for the percentage variations -- thus a variation of Pounds 100 from the average in a subject where the average is Pounds 1,000 is treated the same as a Pounds 100 variation where the average is Pounds 5,000.

The policy point is straightforward. It is whether all universities should be funded the same for each subject -- on the basis of a unit cost for each. This approach was explicitly rejected by the council after consultation and following its overwhelming rejection by the sector. The reason for variations in units of resource is partly, as explained above, that each ASC covers a wide range of provision, but very largely because universities have adopted very different policies with regard to their units of resource since the days when the Universities Funding Council and Polytechnics and Colleges Funding Council were funding on the basis of a standard price.

Some have decided to expand rapidly, thus deliberately reducing their units of resource while greatly increasing their total funding (those universities on Dr Knight's list with the lowest unit funding are those which have increased their total funding by most in recent years). Others have decided to maintain their units of resource by restraining growth. Within whatever resources are available, the imposition of a unit of resource by the council could only be at the expense of those who have chosen for sound academic reasons not to grow significantly and, thereby, to maintain their unit funding.

Finally, Dr Knight says that his table shows a variation around the average of about plus or minus 15 per cent. In a system as diverse as ours, and given the problems with his method, that does not seem to be particularly great nor a particular cause for concern.

Shekhar Nandy Head of Analytical Services HEFCE

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