Minutes of a HEFCE Board meeting held on
9 December 2010 at 10.00 in Centre Point, London
Present
Members
Professor Madeleine Atkins
Mr Alastair Balls
Mr Robert Douglas
Professor Malcolm Grant
Professor Ruth Farwell
Dame Patricia Hodgson
Sir Alan Langlands
Mr Rene Olivieri
Professor Shirley Pearce
Mr Tim Melville-Ross
Mr Anil Ruia
Mr Ed Smith
Professor Paul Wellings
Mr John Widdowson
Professor Tim Wilson
Chief Executive
Chair
Apologies
Mr Mark Batho
Mr Fergus Devitt
Mr Stephen Marston
Mr Aaron Porter
SFC
DEL-NI
BIS
NUS
Observers
Mr Jeremy Coninx
Professor Phillip Gummett
TDA
HEFCW
Officers
Mr Steve Egan
Ms Heather Fry
Mr David Sweeney
Ms Jessica Trahar
Deputy Chief Executive
Director (Education and Participation)
Director (Research, Innovation, & Skills)
Clerk to the Board
Attending
Mr Roger Grinyer
Mr Ian Gross
Mr Ian Lewis
Ms Kate McAlister
Mr David Noyce
Mr Paul Greaves
Head of Corporate Communications
Head of Governance
Head of Finance
Assistant to the Chief Executive
Associate Director
Head of Assurance
Interests
Known interests are shown on the cover sheet of each paper.
Presentation
1.
The Board received a presentation from Dame Lynne Brindley on the final report
of the Online Learning Task Force. The Task Force was established in 2009 and was
made up of an expert group. Central to the Task Force’s approach was the clear need to
understand student demand; a desire to implement a pragmatic approach and develop
realistic recommendations, and an approach that made significant use of case studies.
The report makes a series of recommendations for how UK higher education might
maintain and extend its position as a world leader in online learning.
2.
The Board thanked Lynne Brindley and the other members of the task force for
their work over the past year and for their report.
3.
The following points were made in discussion:
a. Student demand for, and expectations of, on-line learning was growing and
cannot be ignored.
b. Progress depended more on cultural and structural development, rather than
technology.
c. Members highlighted a need for clear strategic commitment from HEIs in order
to develop online learning further. This includes the need for significant skills
development of a variety of staff in this area. It also includes the need for HEIs
to commit to creating open educational content up-front, rather than relying on
pilot schemes.
d. It remains difficult to acquire an understanding of the elements of competition in
this area. Members supported the idea of development of online learning
through collaboration, including the private sector, and the broader need for
institutions to share teaching resources both nationally and internationally
through communications technology.
e. Students require literacy training to enable them to critically distinguish between
the different types and quality of information available online. A shared toolkit
was put forward as the most appropriate solution to this.
4.
The final report will be published in January 2011. It will inform the Board’s
policy/funding decisions in this area in future.
Chair’s introduction
5.
The Chair noted Professor Adrian Smith’s appointment as Director General,
Knowledge and Innovation at BIS. It was noted that Stephen Marston will continue in post
(and as Assessor to the Board) until spring 2011.
6.
The Chair thanked Professor Geoff Crossick, Vice-Chancellor, University of
London, for attending the Board working dinner the evening before, to speak to members
on the future for Arts, Humanities and the Social Sciences. Board members had enjoyed a
lively discussion around the topic.
7.
The Chair welcomed Jessica Trahar, the new Clerk to the Board, to her first Board
meeting.
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Minutes
8.
The Board approved the minutes of the meeting held on 14 October 2010.
Starred items
9.
The Board received the following papers without discussion:
B10/103e
Use of delegated authority
Date of next meeting
Chief Executive’s report (B10/95)
10.
In presenting his report, the Chief Executive highlighted a number of recent
developments to Board members:
a. HEFCE has been working closely with BIS officials on the development of the
2011-12 grant letter. We hope to receive the letter before Christmas.
b. It is likely that the student number controls in place for 2010-11 will continue in
2011-12.
c. An analysis of the grant letter, including proposed actions, will be presented to
the Board in January. The main decisions will be communicated to the sector to
enable institutions to plan effectively.
11.
The Board:
a. Emphasised the concern in the sector regarding the future of capital funding,
and also highlighted the uncertainty surrounding levels of student demand in
2012.
b. Emphasised the need for clear communications to the sector as new policies
and arrangements develop.
12.
The Board received the report.
Audit Committee report (B10/96)
13.
The Chair of the Audit Committee presented his report on the outcomes of the
Committee meeting held on 25 November 2010. He highlighted the following:
a. The Committee had welcomed the report of the lessons learned review of an
institutional merger. In particular, the exploration of how momentum affects
such cases, and the need to recognise the level and changing nature of risk
associated with mergers of institutions, were highlighted.
b. The Chair of the Committee and the Deputy Chief Executive had recently met
with a Panel of the BIS Audit Committee to discuss the relationship between
BIS and HEFCE as one of its principal ‘arms-length bodies’. HEFCE was
chosen as the first case study in view of the existing positive relationship
between the Council and the Department. A key finding was that the quality of
people was just as important as the controls and systems.
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Ensuring an orderly transition (B10/97e)
14.
The Chief Executive introduced this paper, which presented the broad approach
that the Executive is taking to the management of change. This included the planning and
operational processes it will follow to ensure an orderly transition to the new funding and
organisational arrangements for higher education. A number of challenges and risks have
been identified and considered and are based on seven core areas: resource allocation:
transitional arrangements in 2011-12; teaching funding and policy: challenges from 2012;
access to HE; quality and public information; research and HEIF; sector and institutional
sustainability; the future development of HEFCE and its relationship with key stakeholders.
15.
The Chief Executive informed the Board that a transition group would shortly be
established at HEFCE. The group would co-ordinate the transition, while ensuring that the
core day to day functions and responsibilities of the Council continue to be implemented
effectively. There will be two immediate outputs in the short term:
a. A circular letter following the January Board meeting, detailing our approach to
policy changes in the short term, particularly in relation to the 2011-12 grant
letter.
b. A renewal of the HEFCE strategy following the publication of the White Paper.
The developing strategy will be discussed at the Board planning day in March
2011, and if possible, the final strategy will be discussed at the HEFCE Annual
Conference in April.
16.
The following comments arose in discussion:
a. Members acknowledged that, underpinning the work on transition, significant
elements of policy uncertainty still need to be resolved. Clear communications
to the sector through the Board and the Council will be crucial during the period
of change.
b. Annex C was comprehensive and useful as a guide to the risks the Council and
the sector is facing. It could helpfully incorporate the responsibility for managing
the risks and, where this was a third party, HEFCE should work with that third
party to help ensure effective risk mitigation.
c. The need for flexibility in the ways in which the Executive and Board work
together was highlighted, and it was agreed that this will be particularly
important over the coming months as policy changes begin to take shape. The
role that the strategic advisory committees play in policy development and their
potential contribution to the transition process was also emphasised.
d. It was suggested that the risk relating to controlling student finance and student
numbers should be strengthened in the paper.
e. HEFCE’s relationship with governing bodies will need to be carefully considered
as changes take shape. The Deputy Chief Executive flagged that a draft
relationship management strategy between HEFCE and governing bodies will
be presented to the Board at its May meeting.
f.
HEFCE should be seen as a source of evidence and information during the
transition period. A specific example of such evidence would be the close
monitoring of ‘staying-on’ rates of 16-18 year old students in education, to
inform any impact of the new arrangements on demand for higher education.
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g. In relation to the Board’s role in the transition, it was agreed that HEFCE would
further facilitate the distribution of key information and policy developments to
members. Urgent communication between the Executive and the Board would
take place electronically, and Board members agreed to volunteer to contribute
help and advice on areas of policy as they develop.
h. The Board agreed that Annex C of the paper provided a central and necessarily
dynamic device, to ensure that Board members were kept up to date on
progress as the transition period develops.
17.
Members agreed that it would be valuable for Ed Smith to share his knowledge
and experience of the issues facing the SLC in a pre-Board discussion at a future Board
meeting.
18.
This paper is exempt from publication because it concerns policy in development.
Widening participation 2012 and beyond (B10/98e)
19.
The Director (Education and Participation) presented this paper, which was an
update to a paper considered by the Board in January 2010. The paper provided a
discussion of current policy development in the area of widening participation in light of the
Browne Report and Government response to the proposals set out by Browne. A number
of areas are likely to impact on, and shape widening participation policy in the future
including finance, fair access policies, the impact of the market, and the allocation of future
public funding for HE. The WP team have developed a set of core principles with which to
underpin our widening participation policy in meeting the challenges of the future. The end
of the Aimhigher programme will also have a significant impact on future engagement of
institutions with widening participation. Ensuring that the legacy and good practice
developed by the Aimhigher programme is sustained following the end of the programme
and into the new arrangements will be a key priority.
20.
Since the paper was written, the Director of Fair Access at OFFA has received
draft guidance from BIS relating to access and the proposed tuition fee increase. It also
now seems likely that WP Strategic Assessments (WPSAs) and Access Agreements will
remain in place during the early years of the new funding regime.
21.
The following comments arose in discussion:
a. The Widening Access and Participation strategic committee have highlighted
the need to maintain momentum in this area.
b. We need to ensure that we continue to clearly communicate the definition of
widening participation, fair access and social mobility to the sector.
c. The Council had been effective in managing communications following the
recent announcement of the cessation of Aimhigher.
22.
The Board endorsed its support for the proposed principles underpinning the
Council’s future approach to widening participation, and more broadly emphasised that
they continued to view widening participation as important to the future development of
higher education as a whole.
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23.
This paper is exempt from publication as it concerns policy in development.
Safeguarding the public interest in higher education (B10/99e)
24.
The Deputy Chief Executive presented this paper which explored a possible future
approach to regulation by HEFCE in which the primary aim is the safeguarding of the
interests of students and the wider public. The paper drew on HEFCE’s current approach
to regulation and considered key regulatory challenges for the future arising from both the
Browne review and the outcome of the spending review.
25.
The Deputy Chief Executive proposed that a number of principles should underpin
our approach to the development of regulation: highlighting the protection of the
public/student interest; emphasising the need for co-regulation whilst ensuring the level of
burden is appropriate; taking proportionate and reasonable action when required.
26.
The following comments arose in discussion:
a. The complexities of linking quality, outcomes and regulation need to be
considered
b. The juxtaposition of any new form of regulation for HE with other forms of
regulation, for example competition law, needs to be explored thoroughly
c. HEFCE should consider the body of information/lessons learned from the last
ten years of other forms of regulation and feed such lessons into developments
in this area
d. There are risks in regulation e.g. regulation can have unintended
consequences, possibly even an adverse impact on the regulator’s objectives
e. The need to ensure public confidence in the sector should also be highlighted in
any new approach to regulation
f.
The full breadth of the sector needs to be considered, including the entrance of
private providers
g. We may be asked to take a different approach to supporting the sustainability of
institutions in the future.
27.
Board members agreed that it will be vital to work with the sector on this area and
that regulation is likely to be central to the HE White Paper. HEFCE officers will continue
to keep the Board updated on this area as it develops.
28.
This paper is exempt from publication as it concerns policy in development.
London Metropolitan University – Strategic Development Fund proposal
(B10/100)
29.
The Director (Research, Innovation and Skills) presented this proposal which
concerned support from the Strategic Development Fund (SDF) for transformational
development at London Metropolitan University (LMU). The SDF Panel was
recommending the project to the Board. Approval of the SDF award would significantly
enhance the likelihood of LMU achieving long term stability. In proposing the project for
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support, it was highlighted that our primary concern is to protect the interests of students
and to support the new governing body.
30.
The Board agreed to allocate a total of £8.028 million from the Strategic
Development Fund to support transformational development at London Metropolitan
University. The award consists of £4.014 million grant and £4.014 million recoverable
grant and will be found from the £36.5million over claimed HEFCE grant that LMU is
repaying. The award is subject to the following conditions:
a. The University’s performance against a set of KPIs agreed between the HEFCE
institutional team and the University.
b. The KPIs will be finalised following the Comprehensive Spending Review
detailed outcomes, and that the HEFCE institutional team will finalise the trigger
points for action should the University not meet a KPI. The primary focus will be
the financial indicators.
Institutional risk update (B10/101e)
31.
The Deputy Chief Executive presented this paper, giving an updated assessment
of institutional risk. He highlighted that there are no additional HEIs deemed as at higher
risk since the last Board meeting. Most of the HEIs currently at higher risk are improving,
however one is worsening. HEFCE is continuing to take proactive action in this case. In
view of the current uncertainty surrounding the financial situation in the sector, HEFCE
has changed its requirements for the receipt of financial forecasts from institutions from
December to April 2011.
32.
HEFCE has received the majority of HEIs financial statements for 2009-10 and will
make a provisional report back to the Board on the financial health of the sector in
January. The Deputy Chief Executive noted that there are issues currently affecting HEIs
which are beyond the control of HEFCE, including the removal of the Education
Maintenance Allowance and changes to funding for teacher training that could affect HEIs
in future. The NAO will shortly be completing their review of the financial health of the
sector, and it is likely that this will be put before the Public Accounts Committee. HEFCE
has begun modelling the potential impact of changes to funding for HEIs, and have also
asked those HEIs at higher risk to model against potential scenarios.
33.
Changes by banks in relation to borrowing terms for HEIs were highlighted, and
members agreed that this was a key risk which required close monitoring over the coming
months. It was also highlighted that as the new fees regime develops, credit rating
agencies may re-visit ratings for institutions. It was agreed that this should be closely
monitored as a future risk for HEIs.
34.
This paper is exempt from publication because it contains commercially
confidential information.
35.
The Board received the report.
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Strategic advisory committee reports (B10/102)
36.
Three of the strategic advisory committees had submitted reports on the outcomes
of committee meetings which had taken place since the last Board meeting.
37.
The Chair of the Enterprise and Skills Strategic Advisory Committee highlighted
that the committee had focused on employability at their last meeting. The Chair of the
Committee drew members’ attention to the presentation delivered by the University of
Aberdeen and their approach to graduate attributes, which was received positively.
38.
The Board received the reports from the following Strategic Advisory Committees:
Leadership, Governance and Management, Research and Innovation, and Enterprise and
Skills.
Use of delegated authority (B10/92e)
39.
This paper reported on the use of delegated authority since the last meeting. The
Board noted the use of delegated authority by the Chief Executive and others during the
period 14 September to 5 November 2010. The paper also signalled that a revised
scheme of delegated decision making was considered by the Audit Committee on 25
November and will be presented to the Board for approval at its meeting in January 2011.
Date of next meeting
40.
The Board noted that the next meeting would take place on 28 January 2011 at
Centre Point.
The meeting ended at 13.00.
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