The New RASCAL Model
Resource Allocation System and Cost
Apportionment at Loughborough (RASCAL)
25 April 2012
Why RASCAL
•
The majority of the University’s income comes from the core activities of teaching and
research, including short courses and consultancy. These are carried out in the 10 Schools
of the University at departmental level. At a University level there is also income from the
Residential and Catering operations. The surpluses from these operations add to the
funding available to the University.
•
Support Services such as Facilities Management, IT Services, Student Services, Human
Resources, etc are all essential costs of the University which enable it to function but are
not self-financing. These departments are given an allocated budget from the University
with which to deliver the required level of service to the University.
•
The difference between the total income for the University and the total expenditure of the
University is the surplus (or deficit). As the required surplus is set at 3% of turnover it can
be regarded as another “cost” to the University.
•
RASCAL attempts to allocate income to the departments generating the income and
charges them with the directly attributable costs of the department plus a fair share of the
total costs of the University, including the required 3% surplus.
•
The net result of income minus directly attributable costs minus apportioned costs is the
surplus or deficit of the department/School. The way RASCAL is constructed means that as
long as each department/School meets its budget, whether surplus or deficit, the University
will balance its budget and deliver the required surplus
Allocation of Income
Income
Teaching
Allocation
This comprises HEFCE teaching grant and fee income. It is amalgamated into a
single “pot” and distributed to departments on the basis of student load.
Account is taken of the band the department’s student is in, and weighted as per
Hefce formulae. Before distribution deductions are made to provide for special
purposes such as providing for DVC’s and, research schools.
Research,
contracts
grants
Other services rendered
Short &
courses
& Relates to qualitative research (QR) and funds for the supervision of home
students. It is passed on in the same way that it is received and driven by the
unit of assessments members of staff were returned to; i.e. can be traced
directly to departments and allocated as such.
It provides departments with some degree of flexibility in controlling the
department’s finances.
Allocated as earned
self-financing Allocated as earned
Other income
Allocated as earned
The need for change
A New Funding Regime
•
•
•
•
•
•
Under the current funding regime HEFCE categorise subjects into 4 bands
and funds students according to the band they are in.
The intention was to try to allocate funding according to the cost of
delivering the subject.
The bands, going from A to D, were weighted 4.0/1.7/1.3/1.0.
Under the new fee regime only bands A and B are going to be funded. Band
B will be getting £1,483 from HEFCE.
As the University is going to charge £9,000 fees, the income for the bands
will be £10,483, £9,000 and £9,000 for bands B, C and D respectively.
There is no longer any connection to the cost of delivering a subject.
An Opportunity
This was a chance for the University to look again at the RASCAL Model,
assess its suitability for purpose and consider ways to Improve it.
Some of the problems identified with RASCAL were:
•
Departments understanding of the meaning of surplus/deficit.
•
What are the consequences if any of coming in over or under budget and if
so do the departments understand these?
•
Motivational factors
– Does the model encourage space savings?
– Does the model encourage cost savings or budget padding?
•
It does not relate teaching experience to the financial position of a
department
•
How can the widening participation agenda be built in fairly?
• Competition between departments for “strategic funding” rather than
taking into account the all expenditure in the department.
• Non-equitability of weighting factors for COMA such as:
Drivers for space - studio space 50% discount
Teaching cost weightings - for overseas students 1.2 and PGCE 0.5
Load weightings - some students receive an extra 10% load
• Staff driver only includes academic and academic related staff not
administrative or technical staff.
Principles adopted for new model
The University decided to adopt the following principles
•
•
•
An income streamed model should be maintained
Where possible income should be distributed gross
A cross subsidy should be imposed to reflect the cost of teaching in different
subject areas but this should be transparent
Three models considered for cross subsidy were:
1. TRAC T national (average teaching costs across the sector)
2. HEFCE income stream (1.7,1.3.1.0)
3. TRAC T group A (Russell Group)
The model for cross subsidy chosen was model 1 as this model will keep pace
with the competitive environment and it is also data that HEFCE uses.
A chance for simplification
RASCAL POT
In order to move to a more transparent income streaming model it was felt that
certain deductions from the RASCAL Pot should no longer be made and should
instead form part of the Indirect (COMA) charge or be charged /credited
straight to the departments. These are listed below:
• Special Initiatives, CETL continuation and special factors – to become part
of the new “Indirect charge”.
• Development funding for studentships, strategic funding for pay and
strategic funding for non pay – cost/credit to fall to departments.
Items of expenditure that are decided at University level and so cannot be
determined by Schools, such as bursaries, will still be deducted from the Pot.
A consequence of this decision is that the gross income allocated to Schools
will be higher than in the past.
RASCAL POT
Appendix 1
Budget
Suggested Amendment
2012/13
2012/13
2012/13
2012/13
£
£
£
£
Basic Teaching Grant
Total HEFCE Funding
HEFCE Funding for Band B only
Vulnerable subjects - allocate below
31,778,000
31,778,000
0
0
-647,008
-647,008
31,130,992
Add
Add
Widening Participation
1,529,000
Less Special Initiatives
-657,119
31,130,992
1,529,000
871,881
0
Fees
35,808,000
35,808,000
Additional Fees
16,538,000
16,538,000
less BURSARIES
-4,398,000
-4,398,000
less Development Funding Studentships
-1,599,419
0
less Strategic Funding
-769,237
0
less CETL Continuation
-270,000
0
-12,748
-12,748
-240,768
-240,768
less LUSAD FE Home fees
less TTA fees
less Premium Fees
less PG(Supervision) fees
-85,000
0
-2,186,065
-2,186,065
42,784,763
Less
45,508,419
Special Factors Academic Depts
-819,765
0
Central Depts ( exc Grad Sch )
-106,437
0
add TTA factors
Total Home Teaching Pot
0
1,529,000
0
-926,202
0
73,861,434
78,168,411
INDIRECT CHARGES
Cost of support service sections have in the past been apportioned on
five principal drivers but in future it will be based only on two drivers,
space and people (people being student load including PGR’s and all
staff FTE’s).
The term COMA charge is to be replaced by “Indirect Charges” in future
and will include the Community Charge.
This decision was arrived at after a great deal of thought about various
options and modelling of numbers from those scenarios as shown in the
following table.
It is still a basic premise that the charge is based on perceived usage of
University resources NOT a reflection of income in the School.
Scenario
0
Description
Current model -Business plan 11/12
1
New RASCAL pot with income distributed
10.5/9.0/9.0 and with old COMA drivers
2
New rascal pot with new COMA drivers (i),
old community charge allocation
Variations on scenario 2 – income to
reflect costs
Income allocated according to TRAC T for
Loughborough, new COMA drivers, old
community charge allocation
Income allocated according to TRAC T for
all HEI’s new rascal pot, new COMA
drivers, old community charge allocation
3
4
5
6
7
8
9
Affect
Variations on scenario 2 – community
charge allocation
New rascal pot with new COMA drivers,
community charge- allocated in proportion
to COMA charge
New rascal pot with new COMA drivers,
community charge- allocated in proportion
to rascal income
Variations on scenario 2 – COMA
drivers
New rascal pot. Community charge as in
scenario 5
COMA charge drivers space and student
load only
New rascal pot community charge as in
scenario 5
student load only
New rascal pot community charge as in
scenario 5
COMA driver staff headcount only
Schools with band D students gain
per student on 15/16 approx
£4.5k, band C £2.8k and band b
£.3.2k.
As above. High no’s of clerical and
admin staff cause movement
Using TRAC data favours
expensive subjects as it looks at
cost of teaching not fee charged.
Where LU TRAC cost is lower
than National rates the
school/dept is allocated a lower
surplus
Over half of all COMA costs are
driven by student no’s; therefore
this model increases community
charges for depts. with high
student no’s
Whilst some schools with a large
income are hit by this model
others with greater research staff
are benefitting
See below Eng depts. heavy on
space, arts subjects heavy on
student no’s
Depts with the highest % of
students attract a higher COMA
charge. Eng depts. have the
largest propn of space and so do
better when space is removed
Schools/depts with high SSR have
higher COMA charge
Consequences
• Income allocated to the Schools will be a larger absolute amount.
• Indirect charges will be a larger absolute amount.
• Ignoring the cross subsidy, Schools with greater numbers of band D
students will be better off.
• The cross subsidy is designed to rebalance this.
• The effect will be gradual as new regime students replace old
regime ones over the next three years. 2015/16 will be steady state.
The new layout of the Business Plans is shown below:
RASCAL - BUSINESS PLANNING
School of Theoretical Studies
2012/13
Bus plan
2012/13
Bus plan
New Funding
Model
Home Teaching Total
Overseas Teaching Total
TRAC Nat T
Student
Allocation
Student
Allocation
Load
£
Load
£
1,591.22
8,986,518
1,591.22
8,449,009
663.47
9,336,086
663.47
9,336,086
Other Adjustments
36,499
36,499
TOTAL TEACHING ALLOCATION
18,359,103
17,821,594
TOTAL RESEARCH ALLOCATION
1,850,234
1,850,234
Salary Allocation
0
0
Strategic Funding Non-Pay
0
0
Development Funding
0
0
0
0
TOTAL RASCAL ALLOCATION
20,209,337
19,671,828
Direct Expenditure
12,509,942
12,509,942
TOTAL STRATEGIC ALLOCATION
Discretionary
0
0
98,597
98,597
0
0
1,362,856
1,362,856
TOTAL DEPARTMENTAL INCOME
22,894,526
22,357,017
TOTAL DEPARTMENTAL EXPENDITURE
13,733,678
13,733,678
9,160,848
8,623,339
Research Grants & Contracts
Enterprise - Other Funded Projects
Enterprise - Short & Self Financing Courses
Income less Direct Expenditure
Indirect Charges
Income less Total Expenditure
Cross Subsidy
Forecast Surplus/Deficit
7,996,596
7,996,596
1,164,252
626,743
-537,509
-537,509
626,743
School
School of Aeronautical, Automotive, Chemical and
Materials Engineering
2011/12
2012/13
2012/13
2015/16
Final Ops
Approved
Proposed
Funding Model
School
surplus/deficit
Proposed
Funding Model
Cross subsidy
2015/16
School
surplus/deficit
Cross subsidy
July 2011
815,297
205,378
543,435
748,813
-752,319
752,698
379
3,666
352,196
-547,309
-195,113
3,122,980
-1,530,229
1,592,751
School of Civil and Building Engineering
160,566
501,527
66,468
567,995
-91,038
-58,760
-149,798
Loughborough Design School
685,203
555,454
366,306
921,760
237,895
261,983
499,878
School of Electronic, Electrical and Systems
Engineering
-62,891
-378,557
279,858
-98,699
-832,228
461,569
-370,659
Wolfson School of Mechanical and Manufacturing
Engineering
192,032
101,969
398,788
500,757
-647,167
542,854
-104,313
School of Science
-582,795
323,028
302,774
625,802
-933,061
900,888
-32,172
School of Social, Political and Geographical
Sciences
-699,281
872,177
-1,224,164
-351,987
893,720
-1,020,190
-126,470
456,526
229,749
-163,380
66,369
297,998
-664,618
-366,620
-1,093,887
-2,762,922
-22,775
-2,785,697
-1,296,780
353,805
-942,975
0
0
0
0
0
0
0
Other
-120,000
-0
0
-0
-0
0
-0
TOTAL UNIVERSITY
-245,564
-0
0
-0
0
0
0
School of Business and Economics
School of Sport, Exercise and Health Sciences
School of the Arts, English and Drama
Research Schools