TRAC for Teaching Workshop OctoberNovember 2006

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TRAC for TeachingWorkshopOctober/November 2006

• Jim Port and Melanie Burdett
• JM Consulting Ltd

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Topics

• Background and context
• Overview of TRAC (T)
• Sustainable costs of Teaching
• Stage One priorities, costs and benefits
• Project structure and communications
• The minimum requirements Subject-FACTS
• Implementation issues
• Institutions cost objectives
• Stage Two
• Group discussions

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Why TRAC (T)?

• Market and cost pressures on institutions leading
  to needs for better cost information for
• Pricing (e.g. in relation to student fees)
• Portfolio management
• Financial strategy, investment and
  sustainability.
• HEFCE review of the Teaching Funding Method and
  desirability of informing funding more closely by
  costs (now UK-wide).
• Need to make case to retain T funding as variable
  fees come in.
• Implementation of TRAC has been rather skewed by
  research priority and additional funding for R

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Overview of TRAC (T)

• It is feasible to use TRAC for costing T and a
  good case can be made that the balance of costs
  and benefits is justified.
• Needs a national costing framework so that a
  variety of mandatory and optional costing
  activities can be done on a consistent basis
• support for institutions own costing objectives
• cost of HEFCE-fundable (sustainable) T
• costs of each main factor driving T costs
• discipline costs type of student type of
  provision type of institution.
• HEFCE consultation (Autumn 2005) - strong
  institutional support for this (80)
• Annual TRAC already exists use of it will
  minimise burden of new costing approach and add
  value for institutions and HEFCE.

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TRAC (T) Overview
TRAC institutional costs
PFT
PFR
NPFR
O
NPFT
HEFCE-fundable T
non-HEFCE-fundable T
Programme costing ?
subject-related
non-subject related
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Priorities for development

• Stage One (2006 2008)
• Allow institutions to understand costs better.
• ii. Assist in understanding total costs of
  sustainable T.
• What does this mean, and how can it be measured.
• Inform HEFCEs allocation of funding for Teaching
• some work to improve robustness
• top-down (departments) - or voluntary bottom-up
  (course costing)
• calculate subject-related costs of Teaching
  (Subject-FACTS)

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Subject-FACTS

• for each of 41 cost centres
• Full Average Annual Subject-related Cost of
  Teaching a HEFCE-fundable FTE Student in a HESA
  academic cost centre based on TRAC
• Subject-FACTS
• (explained in detail later)

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Issues in robust costing of T

• Some HEIs reporting spurious surpluses on PFT
• Excess hours and robustness of academic time
  allocation
• Better attribution of costs between PFT and NPFT,
  and regulated and unregulated provision
• What is sustainable cost of Teaching?

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Sustainable costs of Teaching

• TRAC only shows actual historic cost
• (plus cost adjustments to reflect infrastructure
  and a return for financing and investment RFI)
• True costs of sustainable T could be higher due
  to (e.g.)
• quality enhancement
• more flexible delivery
• new student types and needs
• staff overstretch
• backlog in estates
• new types of infrastructure (TRAC covers fEC of
  existing estates)
• removal of cross-subsidy to T (e.g. from
  Research)
• They could also be lower due to (e.g.)
• more suitable assets, staff, systems etc
• better utilisation
• collaboration
• more efficient pedagogy
• removal of cross-subsidy from T (e.g. of
  non-viable activities)

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Sustainable costs of Teaching (2)

• How to get at true sustainable costs?
• 1. Zero-based studies (e.g. SHEFC, Engineering
  Council)
• 2. Use of planned costs (this is what research
  projects are funded
• on in part)
• 3. TRAC (actual) costs moderated by
  benchmarking
• Method (1) is conceptually the best, but complex
  (basically need to get sector agreement on a
  specification). But this could be the strongest
  way to argue a case for more funding (if
  justified)
• A policy issue for HEFCE and they are debating
  this.
• Meanwhile TRAC (T) will provide information on
  current costs (levels, reasons for those levels)
  which should be helpful to work in this area.

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Costs and benefits

• 41 Subject-FACTS will provide consistent
  sector-wide comparators (peer group benchmarking)
• Useful information for internal sustainability
  reviews and planning
• Support HEFCE in defending the unit of resource
  for teaching
• Limited additional work
• Regulatory impact assessment for HERRG

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Project structure

• Steering Group Project Team
• HEFCE chair Chris Taylor
• HEIs Heather Williams
• BUFDG, HERRG, AOC Anna Sherratt
• Independent (J Sizer)
• HEI Advisers (not pilots) Consultants
• Birmingham Jim Port
• Brunel Melanie Burdett
• Edge Hill
• Imperial College
• Leeds Manchester Metropolitan
• Plymouth plus Scotland Wales

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Communications

• Briefing events (May/June 100 HEIs attended)
• Newsletters (June August - Overview)
• Website
• Heather Williams and HEFCE Finance Advisers
• Adviser institutions
• Contributor institutions
• Guidance (including policy overview) in October
• Training workshops in October November
• HEFCE has communication strategy with
• stakeholder groups (UUK, govt depts etc.)
• Self-help groups
• Melanie Burdett (help-desk)

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Preparation for TRAC (T) - Questions for
institutions

• Are you using TRAC data and testing it for
  reasonableness?
• Are you reporting misleading data (e.g. is
  scholarship with no outputs reported under
  Research)?
• Will you contribute data to HEFCEs review of
  price groups?
• Are you managing TRAC strategically so you get
  benefits from your institution?

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TRAC (T) technical requirementsMelanie Burdett

• The minimum requirements Subject-FACTS
• Institutions cost objectives
• Implementation issues
• Stage Two
• Group discussions

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Stage One

• Need to produce costs in 2007 (to meet HEFCEs
  2009-10 deadline)
• Pragmatic approach necessary to ensure maximum
  participation, and minimum burden
• So minimum requirements only relate to Teaching
  Funding Method and no mandatory course costing
• But stepping stone
• Catalyst for you to move forward as you want
• Deal with more complex areas in Stage Two

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TRAC (T) Overview
TRAC institutional costs
PFT
PFR
NPFR
O
NPFT
By department
HEFCE-fundable T
non-HEFCE-fundable T
Programme costing ?
subject-related
non-subject related
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TRAC (T) - the requirements

• Allocate all costs to departments
• Identify HEFCE-fundable costs
• Exclude differential costs of non-subject related
  activities
• Map onto HESA academic cost centres
• Divide by HEFCE-fundable student FTEs
• To give 41 Subject-FACTS

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1. Allocate costs to departments

• Already a TRAC requirement full TRAC costs
  attributed to T, R, O, (and S) by academic
  department
• Department is institution-defined (faculty
  etc)
• Must be robust at level of discipline group (but
  many do better than this)
• Optional
• Allocate institutional costs directly to HESA
  academic cost centres
• Course-costing

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2. Identify HEFCE-fundable

• T, less R and O, less NPFT, gives PFT
• Must use robust student numbers especially for
  NPFT
• Need costs of all HEFCE-fundable provision, not
  only HEFCE-funded
• Exclude non-HEFCE fundable from PFT - mainly DoH,
  TDA, LSC
• Remove these costs using student numbers
  optional to weight for complexity/administrative
  burden/placement support/long courses
• Develop robust methods in Stage Two?

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3. Remove costs of non-subject related activities

• Full List
• Non-completion
• Student-related (widening participation,
  part-time, bursaries)
• Provision-related (long courses, post-graduate
  taught, sandwich year-out, foundation degrees,
  and other non-standard modes of delivery
  (flexible learning, employer engagement,
  partnership)
• Institution-related high cost base
  institutions (small, specialist, London,
  old/historic buildings), new initiatives (or
  activities funded through non-recurrent
  allocations e.g. CETLs)

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Non-subject related methods (1)

• Differential costs
• of some of non-subject related activities are
  excluded from costs of HEFCE-fundable provision
• using simple proxies (in Stage One)
• to provide the clean subject-related costs
  of provision

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Non-subject related methods (2)

• Only removing differential costs not full costs
• except for bursaries and sandwich years-out
• (all are considered to be additional in Stage
  One some
• could be lower)
• Costs of those in italics are excluded from
  subject-related
• costs (rest remain in)
• The excluded areas are funded through premiums
  within
• the standard resource calculation or through
  allocations
• outside the mainstream T grant
• Everything else is funded through the standard
  resource
• calculation (subject/volume)

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Non-subject related methods (3)

• Bursaries, fee remissions, hardship, scholarship
  payments remove using actuals
• Rest use HEFCE funding. Appendix 10.
  Mandatory. Simple rules a few exceptions.
• Not the real cost. Explore some areas in Stage
  Two.
• Low burden institutions just need to allocate
  these proxy-costs to departments (can use student
  numbers)
• Full worked example is provided

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4. Map onto HESA academic cost centres

• Unless you have already done so in Step 1
• Staff ) already done for HESA
• Students )
• Costs of T follow the students
• 41 not 34 HESA academic (sub-) cost centres

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5. Divide by HEFCE-fundable student numbers

• Student FTES by type, by HESA academic cost
  centre, will be available through the HESES/HESA
  reconciliation ( later the web facility)
• Dont include SW year-out students (no costs have
  been left in)
• Should have already used these numbers to help
  with allocation of non-subject related costs
  (e.g. PT, long course, SWOUT) and as part of
  PFT/NPFT allocations

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6. To calculate Subject-FACTS

• 41 cost per student figures
• Consistent comparable inside and outside the
  institution
• Not robust-
• time allocation need not be robust at department
  level
• removal of non-subject related costs by applying
  proxies
• But fit for purpose (HEFCEs funding method for
  teaching) and better than previously available

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Benchmarking

• Peer group comparisons and discussion
• Chance to re-submit
• Two years before HEFCE uses data
• Very important to check for reasonableness and
  understand and confirm outliers
• Quality assurance

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The Guidance

• Overview
• Implementing the Minimum
• Parts VII (steps 1 to 6) and VIII (more on the
  treatment of non-subject related areas) of the
  TRAC Guidance
• Appendices definitions, list of 41 HESA
  academic (sub-) cost centres, table of HEFCE
  funding, benchmarking proforma,
• Hierarchy of information, action plan, worked
  example
• Must meet minimum requirements expressed as
  should if information can be used to inform
  HEFCEs funding method for Teaching
• Voluntary (so far)

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Stage One timing and next steps
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Stage One what is required?

• 2-5 weeks work for TRAC manager
• With support from Planning/Student records
• Implementing the Minimum
• But better for institutions to think through own
  objectives at same time
• And remember - the PFT figure should be
  reasonable before you start

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Comments (in May)

• Only interested in course costing
• Doesnt go far enough
• Not robust enough
• But also
• Too time-consuming
• Information is dynamite

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Should not be burdensome

• top-down (from department costs) not bottom-up
  (from module costs)
• basis are the PFT costs already calculated
• minimum requirements are light-touch (one page)
• action plan Implementing the Minimum (few
  decisions are necessary unless you wish)
• avoids complexity HEFCE are providing proxies
  for the costs of non-subject related activities
  (their funding) only the activities funded
  outside price groups are being excluded
• HEFCE are helping with student numbers (by type,
  by HESA academic cost centre)
• no new quality assurance
• extensive Guidance, workshops, HelpDesk if
  required

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Make the information usable internally

• Think through how you want to report your
  information (school, department, subject area)
• Ensure that the HESA academic cost centre
  information (students and costs) can be mapped
  readily onto this management structure
• Ensure you can also report R, O, non-HEFCE
  fundable, and non-subject related costs by
  department
• Try to build in sufficient analysis to allow you
  to look at type of costs (academic staff, central
  services etc) and fixed/variable costs
• Do more analysis in Stage One e.g. PGT,
  life-cycle
• Course-costing in Stage Two?

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Institutions objectives

• 41 Subject-FACTS should be of great interest
  (inform resource allocation, efficiency reviews,
  funding pleas)
• Optional
• Costs per student in each department
  efficiency/ resource allocation
• PGT and/or international students pricing
• Costs by a subject area (lowest organisational
  unit with staff, students, costs) management of
  that unit
• Course costing (whole institution, or in a
  particular department) sustainability reviews
• Changing provision - strategic decisions
  (run/dont run a programme meet Bologna
  requirements)
• Optional methods might involve changing TRAC time
  allocation might be completely parallel system
  but TRAC (T) can be a catalyst and provides
  holistic framework and common principles for
  development

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Priorities for development

• Stage One (2006-07)
• More worked examples, FAQs
• Encourage more participation, reasonableness
  testing
• Identify areas to develop for institutions
• (Bring Scotland and Wales on board)
• Stage Two (starting 2007)
• Support for institutions own cost objectives
• Real costs of non-subject related activities
  WP? PT? Small/specialist? Employer engagement?
• More work on sustainable Teaching

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This does not involve

• costing by course or module,
• more involvement by academic staff,
• costing very complex areas too quickly,
• promise of more money,
• imposing a one-size-fits-all model.
• But it does offer
• a rational basis for allocations of T funding
• very useful benchmarked info (subject-related
  costs)
• catalyst and framework for institutions to obtain
  better management information for critical
  decisions
• evidence for HEFCE of the resources needed for
  teaching and learning

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Support

• Guidance http//www.jcpsg.ac.uk/guidance/index.h
  tm
• Background http//www.hefce.ac.uk/TRAC-T
• HelpDesk for TRAC(T) (only)
• Melanie Burdett director_at_jmc1.org
• J M Consulting 0117 959 3687
• Self Help Groups
• Benchmarking meetings

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Breakout sessions

• Any big questions on whats required?
• Any particular problems you see with
  implementation?
• How do you think you can ensure it is useful to
  your institution?
• What would you like us to develop for you in
  Stage Two?