March 2010/07 This report sets out the findings of an Issues paper independent effectiveness and efficiency review of the Higher Education Funding Council for England. Independent Review Group review of the effectiveness and efficiency of HEFCE Final report Oakleigh Consulting Limited Suite 626 Sunlight House Quay Street Manchester M3 3JZ Tel: 0161 835 4100 Email:[email protected] www.oakleigh.co.uk 1 Contents 1. Executive summary ........................................................................................... 6 1.1. Key findings ................................................................................................ 6 1.2. HEFCE’s value proposition ......................................................................... 7 1.3. Performance, people and stakeholders ....................................................... 8 1.4. Evidence of effectiveness ............................................................................ 8 1.5. HEFCE’s four key functions ...................................................................... 10 1.6. Assessing efficiency .................................................................................. 12 1.7. Conclusion ................................................................................................ 13 2. Schedule of recommendations ........................................................................ 15 3. Background to this study ................................................................................. 17 4. The organisation and its people ....................................................................... 18 4.1. Function and strategic aims ...................................................................... 18 4.2. The Board ................................................................................................. 19 4.3. Chief Executive’s Group ............................................................................ 22 4.4. Structure, people and culture .................................................................... 24 4.5. Conclusion ................................................................................................ 30 5. Stakeholder relations ....................................................................................... 31 5.1. Relationships with HEIs............................................................................. 31 5.2. Relationships with non-HEIs ..................................................................... 34 5.3. Conclusion ................................................................................................ 37 6. Assessing HEFCE’s efficiency ......................................................................... 38 6.1. Underlying efficiency ................................................................................. 38 6.2. Benchmarking efficiency ........................................................................... 38 6.3. Procurement ............................................................................................. 40 6.4. Conclusion ................................................................................................ 41 7. Assessing HEFCE’s effectiveness ................................................................... 42 8. Policy development and advice to government and others .............................. 44 8.1. Learning and teaching ............................................................................... 44 2 8.2. Widening participation and fair access ...................................................... 44 8.3. Research .................................................................................................. 45 8.4. Employer engagement and skills ............................................................... 46 8.5. Economy and society ................................................................................ 48 8.6. Other areas of work ................................................................................... 49 8.7. Conclusion ................................................................................................ 51 9. Administration of funding and implementation of public policy initiatives .......... 52 9.1. Teaching funding....................................................................................... 52 9.2. Research funding ...................................................................................... 53 9.3. Other funding ............................................................................................ 53 9.4. Data collection processes ......................................................................... 54 9.5. Conclusion ................................................................................................ 55 10. Regulation of the HE sector and accountability for public funding .................... 56 10.1. Regulatory burden ................................................................................. 56 10.2. Assurance and institutional risk ............................................................. 56 10.3. Assurance and institutional risk service ................................................. 58 10.4. Evolution in assurance practice ............................................................. 59 10.5. Conclusion ............................................................................................. 63 11. Related bodies ................................................................................................ 65 11.1. Remit and purpose ................................................................................ 65 11.2. Oversight framework.............................................................................. 67 11.3. VFM of related bodies ............................................................................ 69 11.4. Conclusion ............................................................................................. 70 12. Promotion of good practice within higher education institutions ....................... 71 12.1. Key funds .............................................................................................. 71 12.2. Supporting good practice ....................................................................... 72 12.3. Conclusion ............................................................................................. 73 13. Facing the future; the Higher Education Framework and other challenges ...... 74 13.1. Introduction ............................................................................................ 74 13.2. ‘Higher Ambitions’ – The Higher Education Framework ......................... 74 3 13.3. Independent review of HE funding and student finance ......................... 75 13.4. Conclusion ............................................................................................. 76 Appendix A. Terms of reference ......................................................................... 77 Appendix B. Consultees ..................................................................................... 80 Appendix C. Source documents .......................................................................... 90 Appendix D. Common abbreviations ................................................................... 93 Appendix E. Picturing HEFCE’s role ................................................................... 94 Appendix F. The Board....................................................................................... 97 Appendix G. Staffing ........................................................................................... 98 Appendix H. The commercial banks.................................................................. 105 Appendix I. Non-HEI stakeholders .................................................................. 108 Appendix J. Policy case studies ....................................................................... 112 Case study 1: Strategically Important and Vulnerable Subjects ............................. 113 Case study 2: Higher Education Innovation Fund .................................................. 115 Case study 3: Economic Challenge Investment Fund ............................................ 119 Case study 4: The Research Excellence Framework ............................................ 121 Case study 5: Human resource management in higher education ......................... 124 Appendix K. Higher Ambitions; possible impact on HEFCE operations ............. 126 4 List of figures Figure 1 Comparative data on running costs 2008-09 ......................................... 39 Figure 2 Assurance service resources ................................................................. 59 Figure 3 HEFCE’s related bodies ........................................................................ 66 Figure 4 HEFCE’s related bodies – schedule of independent reviews ................. 68 Figure 5 Members of Review Group and consultancy team ................................. 79 Figure 6 Consultees to the review – HEFCE staff ................................................ 80 Figure 7 Consultees to review – HEFCE’s Board and past members .................. 82 Figure 8 Consultees to review – mission groups .................................................. 82 Figure 9 Consultees to review – Non-HEIs .......................................................... 83 Figure 10 Consultees to review – HEIs .............................................................. 87 Figure 11 Outcome Relationship Map