Higher Education Funding Council England (HEFCE)
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HEFCE welcomes PAC report

Sir Alan Langlands, Chief Executive of HEFCE, has welcomed a report by the House of Commons Committee of Public Accounts, 'Regulating financial sustainability in higher education', published today.

The Public Accounts Committee (PAC) report follows a report by the National Audit Office (NAO) earlier this year which concluded that HEFCE has delivered value for money and has been cost-efficient in its approach to regulating financial sustainability in universities and colleges of higher education. The PAC report confirms the Committee’s agreement with this assessment.

Work is already under way on a number of the NAO report's recommendations. The PAC report makes clear that the change in higher education funding arrangements will require a new system of regulation and accountability. It also highlights the need for relevant, reliable information for students to help them make informed judgements about what and where they want to study.

The Government's forthcoming White Paper on higher education will set out proposals on a future regulatory framework for higher education.

Sir Alan Langlands, who gave evidence to the Committee, said:

'I welcome the Committee’s recognition – and the positive endorsement from institutional representatives who gave evidence – that HEFCE has done a cost-efficient, value-for-money job in regulating the financial sustainability of universities and colleges providing higher education. No institution has failed financially and the interests of students and taxpayers have been well protected.

'As the PAC report makes clear, higher education is facing unprecedented change, with new funding arrangements from 2012. We expect that the forthcoming White Paper on higher education will set out proposals for a new regulatory framework for higher education. HEFCE stands ready to contribute to the development and implementation of this framework.

'We agree with the Committee that a new regulatory system will need to consider a more graduated risk assessment system. This will need to include consideration of what information on risk assessments is made public, taking into account the interests of current as well as prospective students. HEFCE’s current policy is to make public the identity of an institution at risk in exceptional circumstances, if we judge it to be in the interests of students and the wider public to do so.

'Student choice is at the heart of these changes. HEFCE is working with our partners, students and the sector on a Key Information Set that will give prospective students accessible, reliable information to help them choose what and where to study.'

Notes

  1. House of Commons Committee of Public Accounts, 'Regulating financial sustainability in higher education' (HC 914), 36th Report of session 2010-12, 7 June 2011.
  2. National Audit Office, 'Regulating financial sustainability in higher education', March 2011.
  3. The PAC report makes seven recommendations (pp 5-6):
    • Recommendation 1 (new regulatory system): HEFCE expects the forthcoming White Paper to set out proposals on a future regulatory system for higher education in England.
    • Recommendation 2 (increased risks to institutions): HEFCE is closely monitoring the potential risks facing higher education in its transition to the new funding system. We will provide advice to the Department of Business, Innovation and Skills (BIS) in early 2012 to allow it to respond to the PAC by March 2012.
    • Recommendation 3 (HEFCE's capacity): HEFCE has reduced its administrative costs in line with government requirements, and is confident that it has the requisite capacity and resources to fulfil its current statutory responsibilities. HEFCE's ability to fulfil its regulatory functions in the new environment will depend not only on the financial position of the sector, but also on the range of duties and responsibilities required by the new regulatory framework.
    • Recommendation 4 (impact of new system): HEFCE will work with BIS to develop this recommendation, which builds on work already under way. The key aim will be to protect the interests of students.
    • Recommendation 5 (information for students): see note 4 below.
    • Recommendation 6 (disclosure of institutions at higher risk): HEFCE agrees that, in the new regulatory system, consideration should be given to a more graduated risk assessment system. The publication of information relating to risk assessments needs to take into account the interests of current students as well as prospective students. At present, HEFCE does release information about institutions at higher risk if we judge it to be in the public's interest to do so.
    • Recommendation 7 (potential funding gap): This recommendation is for BIS.
  4. HEFCE recently consulted on the information requirements of current and potential students ('Public information about higher education: Consultation on changes to information published by institutions', HEFCE 2010/31) and will publish the outcomes later this month.

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