Plans for TRACT

1
Plans for TRAC(T)

• Jim Port
• JM Consulting Ltd
• May 2006

2
Context

• 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 TFM and desirability of informing
  funding more closely by costs.
• Need to make case to retain T funding as variable
  fees come in
• Implementation of TRAC has been rather skewed by
  research priority and availability of
  additional funding for R.

3
Feasibility study (JMC/PAC) Summer 2005

• 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 (some purely for HEIs benefit) can be
  done on a consistent basis
• There are 2 main things to cost
• cost of HEFCE-fundable T
• the main factors driving T costs
• discipline costs (taking account of
  non-completion)
• widening participation (WP)
• non-standard delivery
• part-time provision
• high cost-base institutions
• specific strategic initiatives.

4
Phasing of first development stage (2006 2008)
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Principles

• consistent with annual TRAC TRAC fEC
• minimum burden for HEIs
• so (e.g.) use proxies such as income to remove
  non-discipline elements from discipline costs at
  first
• but HEIs who want to go further or faster can do
  so and the costing framework should support them
  (chief demand is for subject area or course
  costing)

6
Priorities for methods development

• costs of HEFCE-fundable T
• improve robustness of TRAC/T costs
• split regulated/non-regulated fees
• improve cost drivers
• thinking around what sustainable T costs means
  and how to measure them
• discipline costs to inform institutions and the
  TFM
• top-down mandatory methods
• bottom-up (course/subject costing) -voluntary

7
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

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Next steps
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Communications

• Briefing events
• Newsletter (shortly)
• Website
• Heather Williams and HEFCE Advisers
• Melanie Burdett
• Adviser institutions
• Please talk with your colleagues so that
  institutions understand what is being proposed
  and the potential benefits and burden.
• The systems that are introduced should be
  designed to help institutional management.

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Costs and benefits

• All sector level, clear justification for having
  equal costs visibility for T as for R.
• For most HEIs, T is the core business.
• The mandatory parts of TRAC(T) will be designed
  to be as light-touch as possible.
• But some of the optional applications (e.g.
  course costing) could potentially be burdensome.
• JM Consulting will do a Regulatory Impact
  Assessment when the methods are known.

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TRAC(T)
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Methods and Implementation

• Melanie Burdett
• JM Consulting Ltd
• director_at_jmc1.org

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Objectives of the National Costing Framework

• Institutions
• the costs of academic subject areas (and courses,
  if they wish),
• the costs of different types of student (PGT, PT,
  WP),
• in a form and with analysis that will support
  their decision- making.
• HEFCE - funding methods and overview of sector
  sustainability
• average costs of a HEFCE-fundable student,
  in each HESA cost centre,
• the costs of some aspects of Teaching (WP,
  PT, high cost- base institutions,
  non-completion etc),
• the cost of HEFCE-fundable Teaching.

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National Costing Framework

• HEFCE-fundable T
• 1. Discipline costs
• 2. Widening Participation
• 3. Non-standard modes of delivery (courses)
  foundation degrees, sandwich, e-learning
  high-cost long courses strategically important
  subjects
• 4. Part-time provision
• 5. High-cost base
• 6. Specific initiatives

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Timeframe

• To inform HEFCE 09/10 funding round
• Information required by Summer 2008
• Based on Jan 2008 figures, i.e. 2006/07 data
• Need two rounds of data calculation for practice
  and development and to allow benchmarking
• so 1st round by Summer 2007, i.e. 2005/06 data

16
Priorities for first development stage (robust
data in 2008)

• for institutions
• costs of departments or subject areas for
  business management
• (in a way that facilitates course costing if
  institutions wish)
• for HEFCE
• robust costs of a student p.a. per cost
  centre/price band across a representative number
  of institutions
• total costs in the sector of HEFCE-fundable T
  with enough information that will explain/allow
  Government to understand the surplus/deficit

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Therefore defer proper costing of

• WP,
• PT (additional costs),
• long courses/PGT,
• other high-cost provision (foundation degrees,
  sandwich courses, e-learning, WBL),
• new initiatives (or activities funded through
  non-recurrent allocations),
• high cost base institutions (small, specialist,
  London, old/historic buildings).
• until at least the second development stage
• - must still remove them from discipline costs

18

• But as methods are developed in the first stage -
  build in flexibility and building blocks for
• any of these that are to be taken forward in the
  second development stage, and for
• non-completion,
• indirect costs,
• criteria to allocate to price groups,
• fixed/variable analysis,
• life cycle costing,
• costs of partnership,
• non-HEI costs.

19
Second development stage

• will start in 2007 robust data in 2009
• HEFCE will decide what allocations (premiums)
  it will now be incorporating into its TFM, and
  therefore the cost information that it might need
  to help inform the level of funding for each

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Challenges

• Most of this is simple extension of annual TRAC
• but work still required in some institutions
• NPFT student numbers,
• costs at department or discipline level
• split of costs to R and T
• student weightings used to allocate
• costs.
• Some TRAC managers dont understand HESA
  costs/student/staff data returns.

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Challenges

• Institutions want slightly different things than
  HEFCE (and from each other)
• academic subject area, not HESA cost
• centre
• costs of WP, PT, PGTs?
• course costing?
• Costing some areas is extremely complex (e.g.
  WP).
• Some institutions may not yet be able to give a
  high priority to producing better cost
  information.
• HEFCE will need a representative sample.
• There is no new money.

22
Principles

• make everything as useful to the sector as
  possible,
• start with open invitation to sector to
  participate,
• avoid making anything mandatory that is not
  strictly necessary,
• introduce as little as we can as slowly as we can
  lowest burden on sector
• whilst allowing those institutions who wish to,
  to go faster and further,
• allow options in selection of methods, whilst not
  threatening robustness or comparability,
• which means use of proxies, short-cuts,

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Principles contd

• dont require new data collection from academics
  unless strictly necessary,
• dont remove dispensation (will take too long to
  become effective anyway),
• make very specific guidance available for
  institutions who prefer to be told how to do it,
• and support through workshops, worked examples etc

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HEFCE-fundable T
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HEFCE-fundable T methods
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Discipline costs

• T costs by subject area/department/Schl
• Take out non-HEFCE, NPFT
• Take out non-discipline
• Gives clean costs by subject area/department
• Map onto HESA cost centres
• Divide by HESA student numbers

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Discipline costs
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Non-discipline costs

• To be stripped out of discipline costs (they are
  funded differently) if material
• Using proxies
• additional costs of WP, PT use funding
  allocation
• PT, long courses/PGT, SW, FDs use standard
  weighted student numbers
• non-recurrent initiatives (if material) use
  funding allocation
• high-cost base (small, specialist, London,
  historic/old) use funding allocation
• These do NOT reflect the true costs of these
  activities.
• Establish later e.g. in stage two (starting
  2007)
• Priority now
• remove
• from both academic and central departments
• start to understand cost drivers

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What this is not

• requiring costing by course,
• requiring more involvement by academic staff,
• trying to cost very complex areas too quickly,
• promising more money,
• imposing a one-size-fits-all model.

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Next steps
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Next steps contd
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TRAC(T)