Simulating the impact of Augar’s proposals on funding for different subjects

So, how about we get the caveats out of the way first – the numbers you are about to look at are indicative, based on data that is publicly available from HESA. Even the “current” figures are simulated approximations.

I’m only looking at institutions that return student number data to HESA and making some pretty big assumptions regarding subject areas.

The Augar report recommends a headline fee cut to £7,500 – but that the total difference in funding is topped up by the Treasury. However, the suggestion is not a like-for-like replacement – rather, selective investment based on national skills priorities, targeted support for disadvantaged students, and quality of provision (based on graduate outcomes and continuation rates). Here, I’m looking at the effects different skills priorities only might have on institutional income.

OfS, like HEFCE before it, allocates a certain amount of money to “high-cost” subjects based on an understanding of the cost of provision drawn from TRAC(T) Subject FACTS. Though nominally cost-based, this also has an element of strategic skills investment – most notably for medical courses. Such “high-cost” course do not map cleanly to JACS (or any other) subject coding system – for the purposes of this article, I am pretending that they do.

The premium is expressed as a scaling of a core nominal unit of resource of 1 – which was once linked to the pre-2012 calculations that informed core T funding but now floats freely. Premiums are expressed as a proportion of this funding, 10 for clinical medicine (A), 1.5 for lab-based subjects (B), 0.5 for practical subjects (C). By messing with the premium linked to each subject group, I have been able to start building alternate models of investment.

Practising my scales

I’ve taken my funding envelope as the difference between approximate current funding levels (calculated at £9,250 per first-degree student headcount plus the premium by broad subject area) and the core Augar recommendation (£7,500 per student headcount). This gives me a cool £3,480m to allocate, and I’ve done so using three alternate scales.

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• Scale 1 is the Daily Mail scale – it does not allocate funding to subjects that generally get a media mauling as “useless subjects” – creative arts, historical and philosophical studies, social studies, business and administrative studies. Clinical medicine and veterinary medicine get a large premium, other subjects described as useful get a smaller one on one of two levels depending on prevailing opinions of the chattering classes.
• Scale 2 is the STEM+ scale – STEM and related subjects get a massive premium, others do not.
• Scale 3 is the Strategic Scale – clinical subjects maintain their premium, others linking directly to key UK employment sectors and anticipated post-Brexit skills needs get a largish boost.

By looking at the total number of students affected by new scales I’ve come up with a scaling factor for each – and used these to allocate the extra money. There are plots for the whole sector by institution, and for individual institutions by subject (you can also look at the whole sector by subject if you select “all” in the provider drop-down.) In each tab use the “Scale param” drop down to chose your own adventure.

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What does this show us?

First up, it doesn’t show us a prediction for the future. These are indicative numbers only, and are not suitable for planning or lobbying. What I’m trying to show is that, if the envelope is static, we can make some quite radical changes in funding priorities and not make too much impact on the finances of larger multi-subject providers. This issue arises, as Augar notes, with specialist providers – especially in the creative arts. There are no scenarios that I have modelled in which such providers wouldn’t lose about a quarter of their income.

The review report suggests (recommendation 3.5) that:

Support for high-quality specialist institutions that could be adversely affected should be reviewed and if necessary increased.

When OfS carries out its suggested review of funding rates it will need to take account of this issue. This review will, if done properly, go beyond the usual TRAC(T) driven attempts by including considerations of economic and social value. This gives our regulator an unprecedented opportunity to set a national skills strategy, and to ensure that we never again face the shortages of nurses and teachers that we are currently experiencing. It will be an enormous and controversial piece of work – with both political and commercial pressures brought to bear on Nicola Dandridge’s team.

Join us on 2 July in London for a one day conference to analyse and digest the Augar review and begin to build the response.