Bidding for cash is a time waster

Funding of higher education should be mission-based, writes Patricia Ambrose.

The funding needs of higher education have been a major topic of debate of late. Universities UK recently published its Funding Options Review , identifying ways to fill the £900-million-a-year funding gap that it expects will have developed by 2004-05, while Labour's election manifesto made it clear that it would retain its policy of no top-up fees during its second term in office. The sector will therefore need to make a sustained and compelling case to enhance its share of public funds.

As a contribution to the funding debate, the Standing Conference of Principals, the representative organisation for higher education colleges, and the Council for Industry and Higher Education have jointly commissioned a complementary report on the concept of funding by mission, focusing not on how to generate additional income, but on how to ensure more cost-effective and equitable distribution of funds. The joint project aims to identify ways in which approaches to funding by mission might be implemented.

The report was initiated because of concerns that the funding system places too much emphasis on competition for discretionary or special-initiative funding, irrespective of the distinctiveness of individual institutions and their missions. Institutions expend considerable time and effort on bidding, even if the activities highlighted are not among their key priorities. In instances such as the research assessment exercise, institutions are rewarded for excellence; in others, such as widening participation, funding is targeted at institutions with a poor track record.

The degree of micro-management such an approach imposes is considerable. In 2001-02, there will be four recurrent teaching and learning special initiatives, two recurrent research initiatives, five strategic sector and international initiatives, four teaching capital initiatives and four research capital initiatives. In discussing the possibility of a mission-based approach to funding, it is clear that there is minimal institutional support for any funding system that might increase the planning role of the Higher Education Funding Council for England.

Government departments and funding bodies would be unhappy with a system that reduced the degree of public accountability that is expected of the sector. But considerable progress has been made through Hefce's Better Accountability in Higher Education project, which brings together key government departments, funding bodies and sector organisations with the aim of streamlining accountability processes. Through recent funding, Hefce has attempted to implement the principles of better accountability by giving indicative criterion-based allocations, thereby reducing the need for competitive bidding.

The Scop-CIHE report, to be published shortly, will assess the strengths and weaknesses of funding and outline two options for a mission-related system. The first of these is a full system, covering the majority of activities funded by Hefce. The second, which might be more feasible in the short term, proposes a more limited approach related to distribution of existing funds for widening participation and other special initiatives.

In both cases, allocations would be made triennially and would be related to institutional business plans. There would be greater incentive for institutions to concentrate on the activities they are best at and a significant reduction in bid-based funding and micro-management. Such an approach would also offer greater assurance of funding over the three-year period, which would fit better with the business cycles of institutions.

A lot of work still needs to be done, but I hope it will add a different dimension to the funding debate and raise questions about the kind of sector we need if we are to deliver on the government's ten-year promise of 50 per cent participation in higher education. Might we best achieve this through a system that encourages uniformity of mission, or one that enables institutions to play to and develop their strengths?

Patricia Ambrose is executive secretary of the Standing Conference of Principals.