Overhaul decreed for a wasteful system

August 25, 2000

Consultants say Pounds 250 million accountability regime is 'poor value for money'

The accountability regime is to be completely overhauled after a report published this week found "the current regime represents poor value for money".

Consultants examined the costs of subject reviews, the research assessment exercise, bidding schemes for special funding, continuation audits and data collection. They recommend introducing "a new paradigm for the relationship between funding agencies and institutions".

However, the study, undertaken by PA Consulting for the Higher Education Funding Council for England, warns the reforms "are probably too demanding to be achieved in one step".

Sir Brian Fender, Hefce chief executive, said: "This is a chance for universities and colleges to reap substantial rewards by removing unnecessary requirements, improving working relationships between stakeholders and maximising the cost-effectiveness of the effort expended."

The vision for future accountability has three key components: closer collaboration between stakeholders; greater reliance on higher education institutions' internal management controls; and better integration of different audit requirements.

The onus should be on agencies to agree on accountability arrangements rather than asking institutions to duplicate information, the report recommends.

However, universities and colleges must demonstrate greater transparency and show that their internal assurance procedures are appropriate and effective, so that stakeholders can have greater faith in them.

Some Pounds 250 million is being spent on accountability activities by institutions, as revealed in The THES three weeks ago.

The figure represents 4 per cent of the Pounds 6 billion in public money that institutions receive each year.

In terms of direct measured costs, the most burdensome activities were: subject reviews (Pounds 30 million); research assessment exercise (Pounds 7.5 million); bidding schemes (Pounds 5 million excluding bids for the Joint Infrastructure Fund); and continuation audits (Pounds 2.5 million).

Returning student records costs the sector Pounds 1.5 million a year and keeping finance and staff records adds a further Pounds 500,000, according to the report. Unmeasured direct costs such as unattributed staff time and non-staff costs were estimated at Pounds 100 million for the sector as a whole.

In terms of indirect impacts - for example, on enhanced information systems - the study put the figure at a further Pounds 100 million. All these figures were extrapolated from two institutions - the University of Leeds and Leeds Metropolitan University.

The report "found widespread evidence of inappropriate behavioural responses and other intangible cost impacts". It blames some of these responses on poor relationships between universities and colleges, and government, funding bodies and quality agencies.

"Many apparently imposed accountability costs were in practice symptomatic of underlying shortcomings in the quality of relationships between stakeholders and higher education institutions, which have fostered gaps in communications and lack of mutual understanding and trust," the report states.

Universities and colleges are so wary of any requests for information that they expend far more effort than stakeholders had expected on gathering the data. Institutions are nervous that information provided to stakeholders will be used against them, the study found.

On top of the costs sustained by institutions, stakeholders incur operating costs of Pounds 70 million a year, many of which result from administering higher education accountability arrangements, the study found.

A consultation on the report is being overseen by a higher education forum, which includes representatives from government, the funding bodies, quality and data agencies and the institutions.

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