OK here goes - prompted by a funding council voice from this side of the
border, here is a quick description of our Resource Allocation Model (RAM):

We endeavour to provide each academic department with a budget based on its
teaching income.  As everyone has said, getting the data for this is
time-consuming; we start with the number of students on each module and then
ascribe that back to programmes and departments, creating an internal
currency called Earned FTEs.  They need to pass through a programme stage,
as the unit of resource from the funding council is associated with
programmes according to the subject group within which they lie, so each
module is thereby ascribed its funding council income.  We do provide a
fixed amount (based on head-count not fte) to each department for the cost
of managing programmes, but the rest of the income goes to where the
teaching is done.  We charge each department for its share of overhead,
using ten drivers that together are intended to give a charge to departments
that is related to usage.  The three main drivers are numbers of Earned
FTEs, number of staff, and space used and occupied.  The difference between
income and overhead ought to give each department's budget.  But we have not
yet converged to RAM neutrality.

We do also look at each department's other earnings and the reserves they
hold - internal jargon for that is 'full-income RAM'.

We do look at questions of strategic subsidy - as suggested below for areas
that don't cover their costs (RAM negative in our internal jargon), but
still have to disentangle those who have not yet converged to neutrality
from those whose cost structure could not be covered from income but which
are of strategic importance to the University.  It is easier to justify
strategic investment in new and developing areas than it is in those areas
for which the funding council is not providing enough income - the latter
case begs the question of whether one should cross-subsidise on a long-term
basis.

The reason that Ian Robertson's intervention prompted me into a contribution
is that we are awaiting SHEFC's response to our response to the third stage
of their consultation on the teaching funding methodology.  You can see from
the foregoing that we use the signals in the unit of resource from the
funding council as an indication of 'fair' funding for a subject area.  We
hope SHEFC are continuing to look at the relationship between proposed units
of resource by subject group and cost by subject group.

Jenny Rees

Dr J L Rees
Director of Corporate Planning
Glasgow Caledonian University
The Britannia Building
City Campus
Cowcaddens Road
Glasgow
G4 0BA
Tel 0141 331 3133
Fax 0141 331 3008



-----Original Message-----
From: Ian Robertson [mailto:[log in to unmask]]
Sent: 13 June 2001 12:19
To: [log in to unmask]
Subject: Re: Resource allocation at module level


There we go - why don't Mike and David debate the pros and cons of
policy-led and formulaic resource allocation models at the next AUA?

I note no one has really talked about justified budget based systems. Or
non-formulaic elements in their budgetary systems for strategic investment,
or practices to sustain, on a recurrent basis, 'important' institutional
areas that don't cover their costs...

Regards - Ian

Ian M Robertson
Strategy Manager New Ventures
Scottish Funding Councils for Further & Higher Education

Email: [log in to unmask] Tel: 0131 313 6594 Fax: 0131 313 6501
Donaldson House 97 Haymarket Terrace Edinburgh EH12 5HD

If this email relates to Research Assessment Exercise 2001 business then it
is strictly confidential and should only be read by the intended recipient.

>>> [log in to unmask] 13/06/2001 11:54:46 >>>
We have been working on this type of 'income led resource allocation model'
for the last 18 months and have now implemented it for 2001-02 budget
allocation.

I don't agree with David that the effect will be to produce a crude 'fte
grab'.

Our system is part of a wider perspective of making our resource allocation
model more income led and encouraging our faculties to become more income
responsive.  It also has greater transparency and each faculty and
department know exactly how much they 'earn'.  Old arguments about 'Faculty
X are subsidised by us hard workers in Faculty Y' begin to disappear.  In
the longer term we expect Faculties to become more effective at business
planning and more enterprising at earning extra income over the core funding
we receive.

The system we use is conceptually fairly straightforward.  We have a
University wide modular scheme. Each module is assigned to a department and
HEFCE price group.  (There is comparatively little by way of cross teaching
within modules but students can and do move extensively between modules from
different departments. ).

Each taught module registration is assigned a price based on the bare bones
of the HEFCE model weightings (price group x 3, mode x 2 and level x 2).  We
apportion the HEFCE grant across each department according to the price
matrix and the module registration.  We also do a similar calculation for
tuition fees, allowing the department that 'owns' the programme an
'allowance' before we allocate income according to module/teaching load.  We
do things slightly differently for Sandwich year out and research students
but the principle is the same.  The HEFCE 'premiums' are trickier but
there's a balance in favour of simplicity and transparency at the moment and
we don't take account of every machination of the HEFCE model.

Once the income has been allocated to each department and faculty, we
calculate a 'contribution rate' to central overheads and indirect costs.
This is based on calculating the contribution rate for the current year's
budget allocation and beginning the process of moving each faculty towards a
common contribution rate.  Each faculty gets a one line budget based on an
estimated student recruitment and module registration calculation.  During
the budget year we will check they have delivered and adjust accordingly
(the base data is the same as that used for HESES).

Our 6 faculties know how much each department earns, but they don't have to
allocate funds accordingly if they don't wish to.  There are institutional
principles such as widening access and overall spend on staffing that have
to be followed and are monitored, but we are giving academic units
considerably more freedom.

Similar principles apply to our partner FE colleges.

While the overall principles are relatively simple, the detail is extensive
- we have over 20,000 students and nearly 100,000 module registrations in
any one year.  It takes the best part of one very able full time member of
planning staff to manipulate this and considerable input from the finance
section.

This is a very brief summary - and I could easily write 100 pages and talk
for hours on it! (Next year's AUA seems a good place to do it).

You have to be careful not to upset the apple cart, but in any change
process that leads to improvement there are downsides and elements of risk.


I would argue there are strong reasons why you should do it and no technical
reasons why it can't be done.

Mike Milne-Picken
Head of Planning & Performance Review
University of Central Lancashire
PRESTON
PR1 2HE
Tel: +44 (0)1772 892391
Fax: +44 (0)1722 892943
[log in to unmask]
www.uclan.ac.uk/planning


>>> [log in to unmask] 12 June 2001 15:11:34 >>>
Don't do it.  You get into a situation where the "fte grab" is the primary
policy of virtually all academic departments.  Short termism dominates.
People focus on minute detail and take their eyes off any sort of coherent
policy led thinking.

I could give you forty pages of closely reasoned argument about why this is
a very bad idea.  Don't have time at the moment, but am prepared to expand
on it early July (not the full forty pages though - unless a large fee is
involved).

______________________________
David George
Acting Secretary
University of Dundee

Tel +1382 344018
Fax +1382 201604

e-mail [log in to unmask]
----- Original Message -----
From: "A.M.Grey" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Tuesday, June 12, 2001 2:19 PM
Subject: Resource allocation at module level


> Dear all,the university is currently reviewing the way in which
> HEFCE income is distributed to departments.  The current
> proposal is to move to a system where money follows
> students, that is departments get money on based on the
> number of students on modules, rather than programmes.
> Does any one have any words of wisdom that they like to
> share with me, before we start?  In particular are there
> any pitfalls we should be aware of?  Also if you currently
> running a modular based system and have chosen to abandon
> it, could you say why?
>
> It makes sense logically and provided the student data is
> accurate should be relatively straight forward, but I just
> have a feeling that I'm missing something really obvious.
> I realise that we do need to make some policy decision
> first, such as do we give the 'home' department an
> allowance for the work involved in recruitment/student
> support and also when should the extract of data be taken.
> But anything else I've missed?
>
> Many thanks in anticipation.
>
> Anna
>
> ----------------------
> A.M.Grey
> Assistant Registrar (Planning)
> Planning and Quality Office
> (Tel)01482 466867
> (e-mail) [log in to unmask]
>
> **Please note change of address**