Introduction

The mission statement of the Higher Education Funding Council for England is:

'To promote high quality cost effective teaching and research within a financially healthy higher education sector, having regard to national needs.'

The HEFCE was established on 6 May 1992 under the Further and Higher Education Act 1992. It assumed responsibility for funding higher education in England on 1 April 1993, succeeding the Polytechnics and Colleges Funding Council and the Universities Funding Council.

The HEFCE is the largest single source of funding for higher education in England. Its main statutory functions are to advise the Secretary of State for Education and Employment on the funding needs of higher education institutions in England and to distribute available funds. HEFCE funds education, research and associated activities in 136 universities and colleges of higher education. It also funds prescribed higher education courses at 74 further education colleges.

The Council's policies are decided by 14 Board members, drawn from the academic community, industry and commerce. Its staff are organised in four directorates under the Chief Executive.

Achievements in 1996/97

HEFCE conducted a Research Assessment Exercise on behalf of all the higher education funding bodies in the UK which showed major increases in both the quality and quantity of academic research.

The Council has undertaken 188 visits to assess the quality of teaching and learning in 100 universities and colleges. Most departments were providing education of a very high quality and through a special initiative launched by the Council in 1996 these departments now have an opportunity to spread their good practice throughout the higher education sector.

The Council supported 12 Private Finance Initiative Pathfinder projects in 1996/97, totalling over £100 million. Provisional support has also been agreed for eight further projects, totalling £25 million.

HEFCE also disseminated good practice through the publication of value for money studies on treasury management and energy management.

Plans for 1997/98

The Council, in consultation with universities and colleges, is developing a new funding method for teaching which encourages improvements in quality, funds similar provision at similar levels, and responds to the needs of students and the wider community.

The Council will work with Government and other partners to follow up the report of the National Committee of Inquiry into Higher Education (the Dearing Committee).

The Council will work with the new quality assurance agency to produce a robust and respected quality assurance system for higher education. This will enhance the quality of teaching in higher education and give confidence to users at home and abroad.

There will be continued support for at least 15 PFI Pathfinder projects. Experience and good practice will be disseminated through publishing case studies and through regional conferences. The Council will seek to ensure that both the City and the higher education sector are aware of each other's needs.

The Council will deliver Value for Money Studies on Estates and Information Technology and aims to achieve the Investors in People standard by March 1998.

Key Performance Targets
	1994/95		1995/96		1996/97		1997/98
Key Measure	Set	Achieved	Set	Achieved	Set	Achieved	Set
Student Numbers to be within Secretary of State's Target (%)	-	-	<1.5	0.9	<1.5	0.5	<1.5
With External Partners, allocate matched funding for research equipment in response to Technology Foresight Exercise (£m)	-	-	-	-	11.5	17.26*	17
Conduct quality Assessment Visits (number)	-	-	-	-	200	186**	250
Publish Quality Assessment Reports	-	-	-	-	200	264	180***
Achieve Running Cost Efficiency Gain Required by Secretary of State (%)	-	-	3.5	3.5	5.4	5.4	Pending

*	Additional funding was made available to the Council and the Department of Education and Employment to take advantage of demand for the initiative in 1996-97
**	27 Assessment visits were postponed due to industrial action at institutions
***	There is a time delay between the assessment visit and publication of the report. The lower publication figure reflects the reduced number of visits in the previous year