Recommendations: 61, 67 (part), 86, 68, 75 (part), 84

Recommendation 61: We recommend to the Government and the Funding Bodies that diversity of institutional mission, consistent with high quality delivery and the responsible exercise of institutional autonomy, should continue to be an important element of the United Kingdom’s higher education system; and that this should be reflected in the funding arrangements for institutions.

10.21 The Government welcomes the Funding Councils’ intention to ensure that their funding arrangements continue to support diversity of institutional mission which, as the Committee recognised, is one of the sources of strength of the UK’s higher education system.

Recommendation 67 (part): We recommend to the Government and the Funding Bodies that, in the medium term, priority in growth in sub-degree provision should be accorded to further education colleges; and that, wherever possible: higher education provision in further education colleges should be funded directly.

Recommendation 86: We recommend to the Government that the division of responsibility between the further and higher education Funding Bodies in England and Wales should be such that the higher education Funding Bodies are responsible for funding all provision defined as higher education.

10.22 The Government agrees that in England and Wales the funding of all provision defined as higher education – including higher education in further education colleges – should be the responsibility of the higher education funding bodies as regards Higher National Diplomas and Certificates. In England, discussions are taking place with the Higher and Further Education Funding Councils with a view to implementation in 1999/2000. These discussions will also consider whether there is a case to transfer the funding in respect of courses leading to any other higher level qualifications. All higher education in Wales is currently funded through the Higher Education Funding Council for Wales. In Scotland the Government has decided that the proposed Further Education Funding Council will fund all provision in further education colleges and that the Scottish Higher Education Funding Council will continue to fund all provision in higher education institutions. In Northern Ireland the Government will undertake further consultation with the sectors.

Recommendation 68: We recommend to the Funding Bodies and the Research Councils that they review their mainstream teaching and research funding arrangements to ensure they do not discourage collaboration between institutions; and that, where appropriate, they encourage collaboration. We recommend to the Funding Bodies that they be prepared to use their funds on a revolving basis, bringing forward and offsetting annual allocations in support of collaboration which has a strong educational and financial rationale.

10.23 The Government supports the Committee’s recommendation that increased collaboration between institutions should be encouraged and welcomes the HE funding bodies’ intention to review a range of funding arrangements to address this recommendation in discussion with the sector’s representative bodies and other funders such as the FE funding bodies, the Research Councils and the Teacher Training Agency. The Government looks to the HE funding bodies to consider the scope for the development of revolving funds, as recommended by the Committee, to support collaboration along with other mechanisms.

Recommendation 75 (part): We recommend to the Funding Bodies that they should explore the possibility of setting aside some of their total grant, as soon as possible, to establish revolving loan fund schemes to fund: collaborative projects which will facilitate access for staff and students in a region to teaching or research facilities which could not otherwise be provided on a viable basis.

10.24 The Committee’s recommendation that the Funding Bodies should establish revolving loan schemes to fund projects to refurbish buildings, expensive equipment purchases and collaborative projects was addressed in Chapter 5, para 5.9.

Recommendation 84: We recommend to the Government that the tradition of institutional separation from national and sub-national levels of government is firmly maintained; and that this principle is extended to Northern Ireland.

10.25 The present funding arrangements for higher education embody the principle of institutional separation from national levels of government. That principle was endorsed in the Cabinet Office’s consultation paper, issued in November 1997, entitled Opening up Quangos, which identified a number of Government functions, including the funding of universities and colleges, which need to be carried out at arm’s length from Ministers within a general framework laid down by Ministers. The Committee’s recommendation relating to Northern Ireland is addressed in the response to Recommendation 93, Chapter 11, para 11.8.

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