MINISTRY OF HIGHER EDUCATION AND TRAINING

Transcription

1 MINISTRY OF HIGHER EDUCATION AND TRAINING MINISTERIAL STATEMENT ON HIGHER EDUCATION FUNDING: 2009/10 to 2011/12 1 Introduction 2 Checking and adjusting institutional data 3 Allocation of MTEF budgets for 2009/10 to 2011/12 4 Teaching input grids 5 Approved totals of teaching input units for 2009/10 to 2011/12 6 Unfunded student enrolments 7 Teaching output grants for 2010/11 8 Teaching output grants from 2011/12 9 Research output grants for 2010/11 10 Research output grants from 2011/12 11 Institutional factor grants 12 Multi-campus grants 13 Foundation programme grants 14 Infrastructure and efficiency funding 15 Clinical training grants 16 Veterinary sciences 17 Review of funding framework 18 Review of provision of student housing 19 Forward projections of funding data 10 November 2009

2 1 INTRODUCTION 1.1 The context Planning, funding and quality assurance are the three mechanisms used to steer the South African higher education system towards the goals set out in the 1997 White Paper on higher education transformation. This Ministerial Statement deals with the funding and planning instruments which will, during the triennium 2009/10 to 2011/12, form part of these steering mechanisms. The document is, as a consequence of the purpose which it has to fulfill, both technical and detailed. The main elements of this context are national policy imperatives which require higher education to make major contributions to the social transformation of South African society and, at the same time, to national economic growth and development. Higher education is expected to deliver the high level professional skills, the new research, and the innovative ideas which are needed by the economy. Higher education is also expected, through its student admissions and its teaching/learning activities, to assist with the creation of a fairer, more just, society in South Africa. The Ministry of Higher Education and Training will use the instruments set out in this Statement to steer the higher education system towards the realisation of the national goals of equity and development. 1.2 Content of Ministerial Statement The funding framework, which was published in the Government Gazette of 9 December 2003 (Vol 462, no 25824), requires the Minister of Education to issue an annual statement, which includes the following forward determinations: 6.1 A forecast of the grant totals likely to be available for distribution to the public higher education system during the next triennium. 6.2 A forecast of the public higher education system s likely totals of outputs and of planned student inputs for this triennium. 6.3 Details of how the data required for input, output and institutional factor calculations will be determined. 6.4 Details of the input and output weightings, and of the various benchmarks to be employed in the calculation of block grants. 6.5 Details of how unallocated proportions of output block grants will be redistributed. 6.6 Details of how institutional factor grants will be calculated. 6.7 An account of the implementation of the framework, and of the steps taken to ensure that the public higher education system is not destabilised. (Government Gazette, no 25824, 13-14). Forward determinations of this kind are designed to give stability to the funding framework, and to the financial planning of individual higher education institutions. 2

3 2 CHECKING AND ADJUSTING INSTITUTIONAL HEMIS DATA 2.1 The Department of Higher Education and Training will during this triennium continue the practice of checking the Higher Education Management Information System (HEMIS) submissions of each institution. If a review suggests that an institution s data submissions for earlier years are wrong, then it will be required to correct errors and submit new data files. If this is deemed necessary, the institution s block grants for specific years will be re-calculated and any over-payments will be deducted before new block grant funds are paid to the institution. 2.2 The Department of Higher Education and Training will also, when necessary, make adjustments to institutional data in the following circumstances: The report submitted by its external auditors indicates that the institution has not complied with the Department s HEMIS directives Analyses undertaken by the Department indicate that the institution s data submissions are flawed. 3 ALLOCATION OF MTEF BUDGETS FOR 2010/11 TO 2011/ Table 1 which follows shows how the Minister has divided the provisional Medium Term Expenditure Framework (MTEF) allocation for higher education between various categories for the outer two years of the triennium 2009/10 to 2011/ A main point which should be noted about this table is that the overall amounts for 2010/11 and 2011/12, as well as the totals in the various categories and subcategories, could change when the final higher education budgets for these years are approved by Parliament. 3.3 Specific points to note about Table 1 are these: The multi-campus grants for 2010/11 and 2011/12 have been deducted from the institutional factor allocation and have been moved to earmarked allocations. This is discussed further in section The 2011/12 teaching output allocation has been divided into 80% which will be based on actual graduate numbers, and 20% for teaching development. The teaching development allocation has been placed in the earmarked funding category. This is discussed further in section The 2011/12 research output allocation has been divided into 80% which will be based on actual research masters and doctoral graduates and publication units, and 20% for research development. The research development allocation has been placed in the earmarked funding category. This is discussed further in section 10. 3

4 Table 1 MTEF BUDGETS FOR HIGHER EDUCATION: RANDS MILLIONS Final allocations Provisional distribution of MTEF budgets 2008/ / / /12 [1] Block grants [1.1] Teaching inputs [1.2] Institutional factors [1.3] Teaching outputs [1.4] Research outputs [1.5] Former Vista campuses [1.6] Veterinary sciences block grants [2] Earmarked grants [2.1] NSFAS [2.2] Interest & redemption on loans [2.3] Improving infrastructure & output efficiencies [2.4] Clinical training of health professionals [2.5] National Institutes [2.6] African Institute for Mathematical Studies [2.7] Foundation programmes [2.8] Veterinary sciences earmarked grants [2.9] Multi-campus earmarked grants [2.10] Institutional restructuring [2.11] Teaching development grants [2.12] Research development grants TOTALS The veterinary science grants for 2010/11 15 and / have been 19 moved 532 from 21 block 376 to earmarked allocations. The purpose of this change and the future use of these funds is discussed further in section After the reallocations referred to in and above have been made, the yearon-year increases in the broad funding categories in Table 1 become these: Table 2 Increase in budget provision compared to previous year 2009/ / /12 Block grants 10.6% 13.4% 3.0% Earmarked grants 17.3% 15.9% 31.4% TOTAL 12.1% 13.9% 9.4% The earmarked allocations for infrastructure and output efficiencies, clinical training and foundation programmes are discussed in more detail later in this report The Ministry of Education had approved funding for the African Institute of Mathematical Sciences for the three-year period 2007/08 to 2009/10. Provision for funding for at least one year has been made, while the Institute s formal teaching programme is being reviewed. 4

5 3.3.8 Provision has been made for earmarked allocations of R39 million for 2010/11 and R41 million for 2011/12 for the National Institutes in Mpumalanga and the Northern Cape. These funds will be allocated by the Minister on the basis of plans and budgets submitted by the Boards of the Institutes. 4 TEACHING INPUT GRIDS 4.1 The teaching input grid consists of aggregations of educational subject matter categories (CESM categories), which are subjected to weightings by funding group and by course level. These grids distinguish between the teaching inputs of all contact and distance programmes up to and including honours level. For the purposes of teaching input funding, all distance masters and doctoral programmes are given the same weightings as contact programmes. 4.2 Table 3 sets out the funding groups which are based on the 1982 edition of the CESM category manual. Because this edition of the manual has to be used for reporting the 2008 student data which apply to the 2010/11 financial year, as well as the 2009 student data which apply to the 2011/12 financial year, this grid will be used up to and including the 2011/12 financial year. Table 3 Funding groups: 2009/10 to 2011/12 Funding group CESM categories included in funding group 1 07 education, 13 law, 14 librarianship, 20 psychology, 21 social services/public administration 2 04 business/commerce, 05 communication, 06 computer science, 12 languages, 18 philosophy/religion, 22 social sciences 3 02 architecture/planning, 08 engineering, 10 home economics, 11 industrial arts, 16 mathematical sciences, 19 physical education 4 01 agriculture, 03 fine and performing arts, 09 health sciences, 15 life and physical sciences 4.3 The weighting factor of a cell in the grid in Table 4 will be applied to the corresponding unweighted FTE students in that cell, thus generating weighted teaching input units for the particular cell. The total of weighted teaching input units for an institution will be the sum of the input units of all the grid cells. Table 4 Weighting factors for teaching inputs: 2009/10 to 2011/12 Funding group Undergraduate & equivalent Honours & equivalent Masters & equivalent Doctoral & equivalent Contact Distance Contact Distance Contact Distance Contact Distance The Ministry of Education approved the publication of a revised CESM manual in August Universities are revising their HEMIS data bases, and will submit their first returns in terms of the new CESM categories in These new data will be used for funding calculations for the first time in the 2012/13 financial year. 5

6 4.5 Table 5 below sets out the new funding grid, based on the current funding framework and the 2008 CESM manual. The weighting factors in Table 4 would apply to these cells of the grid. Table 5 Funding groups for 2012/13: based on 2008 CESM categories Funding group CESM categories included in funding group 1 07 education, 12 law, 18 psychology, 19 public administration and services 2 04 business, economics & management studies, 05 communication & journalism, 06 computer & information sciences, 11 languages, linguistics & literature, 17 philosophy, religion and theology, 20 social sciences 3 02 architecture & the built environment, 08 engineering, 10 family ecology & consumer sciences, 15 mathematics & statistics 4 01 agriculture & agricultural operations, 03 visual and performing arts, 09 health professions & related clinical sciences, 13 life sciences, 14 physical sciences 4.6 The introduction of this new input funding grid will not have a major impact on the calculations of teaching input unit totals and shares. The number of courses moving into higher funding groups on the new grid will be small. 5 APPROVED TOTALS OF TEACHING INPUT UNITS 5.1 The funding framework requires teaching input funding to be based on planned and approved FTE student enrolments. After a lengthy process of consultation with the sector and individual institutions, the Ministry of Education approved, in October 2007, enrolment targets for each institution up to, and including, the 2010 academic year. Because they required confirmation by each university council, these enrolment targets became in effect a contract between the Ministry of Education and the council. 5.2 These targets will, because of the two-year lag in funding calculations, cover teaching input funding up until the 2012/2013 financial year. 5.3 One of the goals which the Ministry set for this planning process was that there should be no unfunded students in the higher education system by It was made clear during the consultations with universities that this goal could be achieved only if they are able to manage their student admissions and enrolments within the targets which they had accepted in Table 6 below sets out the funded totals of teaching input units for 2009/10 to 2011/12, and the shares which institutions will receive of the teaching input grants. 6

7 Table 6 MINISTERIALLY APPROVED SHARES OF TEACHING INPUT GRANT Financial year Financial year 2009/ / Two FUNDED points TOTAL about OF the TEACHING table which INPUT should UNITS be noted are these: Financial year 2011/12 Cape Peninsula University of Technology 4.66% 4.73% 4.80% University of Cape Town 5.32% 5.29% 5.26% Central University of Technology 1.59% 1.60% 1.60% Durban University of Technology 3.71% 3.58% 3.46% University of Fort Hare 1.24% 1.23% 1.23% University of Free State 4.46% 4.46% 4.46% University of Johannesburg 6.82% 6.76% 6.71% University of KwaZulu-Natal 7.86% 7.96% 8.05% University of Limpopo 3.46% 3.51% 3.55% Mangosuthu University of Technology 1.27% 1.32% 1.37% Nelson Mandela Metropolitan University 3.62% 3.64% 3.65% North West University 5.47% 5.52% 5.56% University of Pretoria 9.14% 9.18% 9.21% Rhodes University 1.22% 1.22% 1.23% University of South Africa 9.26% 9.36% 9.45% University of Stellenbosch 5.11% 5.09% 5.06% Tshwane University of Technology 7.85% 7.55% 7.27% Vaal University of Technology 2.56% 2.52% 2.49% University of Venda 1.41% 1.45% 1.48% Walter Sisulu University 3.26% 3.31% 3.35% University of the Western Cape 3.01% 3.04% 3.07% University of the Witwatersrand 6.15% 6.08% 6.01% University of Zululand 1.55% 1.62% 1.68% (thousands) The totals and institutional shares are taken directly from the Appendix to the Ministerial Statement on Student Enrolment Planning (October 2007) The 2010/11 funded total of teaching input units increases by 4.7% compared to that of 2009/10, and the 2011/12 total increases by 4.4% compared to that of 2010/ Institutions can calculate their provisional teaching input grants by using these percentages and the MTEF totals in Table 1 of section 6. For example, if a university s share of the funded input total is 5.75% for 2010/11, then its provisional teaching input grant will be: x R9 790 million = R563 million. 6 UNFUNDED STUDENT ENROLMENTS 6.1 The average annual growth rate in head count student enrolments between 2005 (the base year for the enrolment planning process) and 2008 was 2.8%, compared to the target rate of 2.0% set in October 2007 by the Ministry of Education. 6.2 The latest student data available show that student enrolments surged above these averages between 2007 and The head count student enrolment total rose from in 2007 to in 2008; an increase of or 5%. The FTE enrolled total, which is an 7

8 indicator of the student load carried by the higher education system, rose from in 2007 to in 2008; an increase of or 4%. If these rates of increase are repeated in 2009, then strains will be placed on the goal of no unfunded students in the system by the 2010 academic year and the 2012/13 financial year. Table 7 is based on the assumption that each university s 2009 FTE enrolment will increase at the same rate which it did between 2007 and Table 7 WEIGHTED TEACHING INPUT UNITS FOR 2011/12: THOUSANDS 6.3 Three main points to note about Table 7 are these: Negative numbers and percentages in the final two columns are indicators of unfunded students. Positive numbers and percentages in these two columns are indicators of over funding of students There will still be unfunded students in the higher education system in 2011/12. The proportion of unfunded students will however have fallen from the 12% experienced in 2007/08 to 3% for 2011/ The final two columns in Table 7 show that any assessment of the success of the migration strategy cannot be based solely on totals for the system. These two columns show that 10 universities are likely to have unfunded students in 2010/11, and that 7 of these will have unfunded proportions of more than 10%. 6.4 Table 8 below ranks institutions by the proportions of over and under funded students which they are likely to have in the 2009 academic year and the 2011/12 financial year. Table 8 Generated for 2011/12 by projected 2009 FTE student enrolments Approved target total: 2011/12 Generated total less target total = unfunded students Cape Peninsula University of Technology % University of Cape Town % Central University of Technology % Durban University of Technology % University of Fort Hare % University of Free State % University of Johannesburg % University of KwaZulu-Natal % University of Limpopo % Mangosuthu University of Technology % Nelson Mandela Metropolitan University % North West University % University of Pretoria % Rhodes University % University of South Africa % University of Stellenbosch % Tshwane University of Technology % Vaal University of Technology % University of Venda % Walter Sisulu University % University of the Western Cape % University of the Witwatersrand % University of Zululand % TOTAL % 8

9 ESTIMATES OF % OF OVER- AND UNDER-FUNDED STUDENTS IN 2011/12 University of KwaZulu-Natal 24.7% Nelson Mandela Metropolitan University 14.2% North West University 11.5% University of the Western Cape 5.8% University of Cape Town 5.6% Durban University of Technology 5.1% Tshwane University of Technology 3.9% University of the Witwatersrand 3.9% Mangosuthu University of Technology 3.3% University of Pretoria 2.1% Cape Peninsula University of Technology -2.2% University of Limpopo -2.4% AVERAGE -2.7% Vaal University of Technology -3.0% Rhodes University -4.0% University of Free State -6.8% University of Venda -7.2% University of Zululand -10.0% Central University of Technology -10.4% University of Johannesburg -11.6% University of Stellenbosch -14.5% University of Fort Hare -16.4% University of South Africa -22.0% Walter Sisulu University -22.5% Note: a negative is an indicator of unfunded students & a positive an indicator of over-funded students 6.5 Forward projections of enrolments for the 2010 academic year suggest that the unfunded student total for the higher education system for the 2012/13 financial year will probably be only 1%, compared to the 2007/08 proportion of 12% and the 3% proportion for 2011/12. These projections do however suggest that the problem of the under funding and over funding of individual universities will be exacerbated. This is a serious issue which will affect future funding and enrolment policies. 6.6 The first step that will be taken in dealing with this matter will be to require universities to submit reports on their management of their student enrolment targets. When the October 2007 Ministerial Statement on Student Enrolment Planning was released to universities, the former Minister of Education said this in her covering letter to vice chancellors: The performance of institutions relative to their input and output targets will be monitored annually. If an institution s performance falls below the targets, then I may ask its Council to submit a formal report on why this has occurred, and on what remedial steps will be introduced. It is important to note that this report does not replace the detailed plan and narrative which each university is required to submit as part of the student enrolment planning process. 6.7 The second step will be that of including, as part of the new round of student enrolment planning, the key issue of what the starting date should be for forward projections 9

10 in the new cycle. Should it be (a) the actual enrolments institutions have in 2010 or (b) the target totals which they should have achieved or (c) some compromise position which takes account both of the original targets and the actual enrolments achieved in 2010? The Department will consult the CHE, HESA and individual institutions on the resolving of this issue, prior to submitting recommendations to the Minister. 7 TEACHING OUTPUT GRANTS FOR 2010/ Teaching outputs: actual and normative The current funding framework requires teaching output grant allocations to be determined on the basis of: an actual weighted total of teaching outputs produced by each institution; a normative weighted total of the teaching outputs which each institution should have produced, in accordance with benchmarks laid down by the Minister. All completed certificates, diplomas and degrees, up to and including non-research masters degrees, are recognised as teaching outputs for the purposes of the calculation of actual teaching output grants. No differences are drawn between the teaching outputs of distance and of contact programmes. The weightings to be applied to these actual graduate outputs are set out in Table 9 below: Table 9 Weightings for teaching outputs: 2010/11 1st certificates and diplomas of 2 years or less 0.5 1st diplomas and bachelors degrees: 3 years 1.0 Professional 1 st bachelor s degree: 4 years and more 1.5 Postgraduate and postdiploma diplomas 0.5 Postgraduate bachelors degrees 1.0 Honours degrees/higher diplomas 0.5 Nonresearch masters degrees and diplomas Normative teaching output totals Normative totals for the 2010/11 financial year will be based on the actual totals generated by each institution s 2008 head count student enrolment, using the benchmarks set out in Table 10 below. The benchmarks indicate what proportion of a university s head count enrolment in a given academic year is expected to graduate in that year. For example, if a university had in 2008 a total of students enrolled in three-year undergraduate qualification, then it is expected to produce x = graduates in 2008 in those qualifications. Table 10 Benchmark graduation rates for 2010/11 Contact Distance Undergraduate: up to 3 years 22.5% 13.5% Undergraduate: 4 years or more 18.0% 9.0% Postgraduate: up to honours 54.0% 27.0% 10

11 Postgraduate: up to masters 29.7% 22.5% 7.3 Dividing the MTEF teaching output allocation between categories of grant The normative and actual totals of teaching outputs will be used to divide the MTEF s provisional allocation of R2 447 million for teaching outputs for 2010/11 between (a) an amount for actual teaching outputs and (b) an amount for teaching development. The method to be used is described below: Totals of the actual weighted teaching outputs (B) and of the normative weighted teaching outputs (M) of all institutions are calculated. The amount available for actual teaching outputs for the system is then determined as: (B divided by M) multiplied by R2 447 million The total available for teaching development for the system is the balance remaining after the amount for actual teaching outputs has been deducted from the total MTEF teaching output allocation. 7.4 Institutional allocations An institution s Rand allocation for actual teaching outputs is determined as: [(Institutional weighted total of teaching outputs) divided by (system s weighted total of actual teaching outputs)] multiplied by (Rand total for actual teaching outputs calculated in above). Only those institutions whose actual weighted totals of teaching outputs are less than their normative weighted teaching output totals receive teaching development funding. An institution s teaching development grant is determined in this way: [(Institutional shortfall between actual and normative teaching output totals) divided by (total of all teaching output shortfalls)] multiplied by (Rand total for teaching development calculated in above). 7.5 Teaching development grants for 2009/10 and 2010/11 In the Ministerial Statement of September 2008, the Ministry of Education set out the allocation process which will operate in 2009/10 and 2010/11. This process has these distinct steps: Institutions were required to submit proposals to the Department on how they would use the teaching development funds generated by their graduate shortfalls in the 2009/10 and 2010/11 financial years In November 2008, calculations were made of the Rand values of the teaching development grants generated for 2009/10 by institutional shortfalls. Institutions whose proposals were approved by the Minister were allocated these amounts as earmarked grants. 11

12 7.5.3 In November 2009, calculations will be made of the Rand values of the teaching development grants generated for 2010/11 by institutional shortfalls. An institution whose proposals were approved by the Minister in 2008 will be allocated these amounts as earmarked grants to be used on these projects. 8 TEACHING OUTPUT GRANTS FROM 2011/ Task team on teaching development grants A task team, appointed by the Ministry of Education, has recommended that the current policy on the calculation and distribution of teaching development grants be discontinued. The three main recommendations of the task team were these: The Minister should be able to set the annual amount available for teaching development as a fixed proportion of the total MTEF allocation for teaching outputs. The Minister, under current policies, is not able to determine in advance the annual amounts to be used for teaching development All institutions should be eligible for teaching development funding, and not just those whose performance falls below national output norms The first of a cycle of teaching development grants should be paid to institutions only after plans have been submitted to and approved by the Department. Institutions should account for their expenditure of these funds through annual progress reports. These and various other recommendations of the task team have been adapted to produce a new policy, which the Minister wishes to implement in 2011/12. The Minister will seek the advice of the CHE before taking a final decision on the implementation of this new policy. 8.2 Proposed new teaching development policy The proposed new teaching development policy would have the following main features: % of the MTEF budget for teaching outputs would be distributed on the basis of the actual teaching outputs (or graduates) produced by universities. The balance of 20% would be used for teaching development grants To ensure that all institutions are eligible for teaching development funds, the distribution of the funds available would be based on the share which each has of the degree credit total of the higher education system. The main points to note about this feature of the policy are these: Degree credits are measures of the teaching outputs based on all the courses offered by universities. The calculations of degree credits follow the same principles as FTE student enrolled student calculations, with the only exception being that degree credits are based on courses actually passed by students. Suppose that a course X has an enrolment of 500 students, that 380 pass the final examination of the course, and that X s share of the curriculum for a programme 12

13 is 10%. X s FTE enrolled total will be 500 x 0.1 = 50. Its degree credit total will be 380 x 0.1 = 38. Degree credit totals can be used to determine an overall success rate for each university, by dividing its degree credit total for all courses by the FTE enrolled student total for that university. For example, if University A has a degree credit total of and an FTE enrolled total of , its average success rate would be 14500/18000 = 81%, If University B has degree credits and FTE enrolments, it will have an average success rate of 22000/30000 = 73%. The teaching development grant for each university would be calculated as follows: [(Institutional FTE degree credits) divided by (system s total FTE degree credits)] multiplied by (20% of the total MTEF teaching output allocation). The FTE degree credits used would be those calculated two academic years before the funding year The use of degree credits without targets or benchmarks would be a signal that all universities, even those with high success rates, need teaching development funds to maintain and improve the quality of their teaching outputs The use of these degree credits would also eliminate one of the unintended consequences of the current policy on teaching development funds. A consequence of the methodology described in paragraphs 10.2 to 10.4 is that teaching development funds go at present only to those universities whose graduate output performance falls below the norms set by the Department. The further a university falls below the norms, the greater will be its reward in obtaining teaching development funds. The effect of this can be seen in the teaching development grants which universities received in the 2009/10 financial year: The total available for teaching development was R345.4 million, of which R228.7 million (or 66.2% of the total) went to one university which had missed its benchmark targets by a wide margin. The next highest allocation to a university was R29.2 million (8.5% of the total). Nine universities, which had met the benchmarks, did not qualify for teaching development funds in 2009/10. The remaining 12 universities received the balance of R87.5 million available in 2009/10; an average of R7.3 million each Teaching development grants would continue to be earmarked funds which must be used for purposes designated by the Minister. The Minister s new requirement would be that these funds must be used in targeted ways to improve the success and graduation rates of disadvantaged students. Institutions would have to do the following: 13

14 They would have to identify those programmes in which the graduation rates of disadvantaged students are significantly lower than those of advantaged students. They would have also to identify the killer courses within those programmes; ie those which are failed by large proportions of disadvantaged students. They would have to submit plans indicating what interventions they could make to improve success rates in these courses. These plans would have to be accompanied by expenditure budgets. Annual progress reports would have to have to be submitted. These would have to describe the outcomes of the implementation of the plans, including indications of changes that have occurred in success rates. 8.3 Example of effect of implementing new teaching development policy Table 11 which follows shows what teaching development grants would have been in the 2009/10 financial year if the new policy had been implemented for this financial year. The main effects of the proposed new policy would have been these, if it had been implemented in 2009/10: The amount available for teaching development grants would have increased by R80 million (or 22.5%) All 23 universities would have received a teaching development grant. The highest share would have been 17.1% and the lowest 1.7%. The shares of 5 universities would have been in the range 5% - 10%, and the remaining 17 would have been below 5%. 8.4 Actual teaching output grants An institution s allocation for actual teaching outputs, under the proposed new policy, would be determined as: [(Institutional weighted total of teaching outputs) divided by (system s weighted total of actual teaching outputs)] multiplied by (80% of the MTEF total for teaching outputs). 14

15 Table 11 Teaching development funds 2009/10: on current and new allocation mechanisms Teaching development funds: Rands Degree credits: 2007 millions Total Share of total 2009/10 allocation on new formula Actual 2009/10 allocation Cape Peninsula University of Technology % University of Cape Town % Central University of Technology % Durban University of Technology % University of Fort Hare % University of Free State % University of Johannesburg % University of KwaZulu-Natal % University of Limpopo % Mangosuthu Technikon % Nelson Mandela Metropolitan University % North West University % University of Pretoria % Rhodes University % University of South Africa % University of Stellenbosch % Tshwane University of Technology % Vaal University of Technology % University of Venda % Walter Sisulu University % University of the Western Cape % University of the Witwatersrand % University of Zululand % TOTAL % RESEARCH OUTPUT GRANTS FOR 2010/ Research outputs: actual and normative Current policies require research output grant allocations to be determined on the basis of: an actual weighted total of research outputs produced by each institution; a normative weighted total of the research outputs which each institution should have produced, in accordance with benchmarks laid down by the Minister. Doctoral and research masters graduates and publication units are recognised as research outputs for the purposes of the calculation of research output grants. The weightings to be applied to these three categories of outputs are set out in Table 12. Table 12 Weightings for research outputs: 2010/11 Publication units 1 Research masters graduates 1 Doctoral graduates 3 15

16 9.2 Normative research output totals As is indicated in 9.1 above, the funding framework makes provision for a normative total of research outputs for the public higher education system to be calculated by multiplying totals of permanently appointed instruction/research professionals by benchmarks approved by the Minister. In the 2004 Ministerial Statement, separate benchmarks were set for universities and universities of technology. These benchmarks had to be expanded when the category of a comprehensive institution was introduced in The Ministry of Education announced in the 2005 Statement that, until a benchmark for comprehensive institutions has been finalised, the benchmarks for universities and universities of technology will be those set out in Table 13 below. Table 13 Normative ratios of weighted publication units to permanently appointed instruction/research staff members Universities 1.25 Universities of Technology 0.50 Comprehensive institutions: University of Johannesburg 0.97 Nelson Mandela Metropolitan University 0.93 University of South Africa 1.16 Walter Sisulu University Dividing the MTEF research output allocation between categories of grant The normative and actual totals of research outputs will be used to divide the MTEF s provisional allocation of R2 003 million for research outputs for 2010/11 between (a) an amount for actual research outputs and (b) an amount for research development. The method to be used is described below: Totals of the actual weighted research outputs (A) and of the normative weighted research outputs (N) of all institutions are calculated. The amount available for actual research outputs for the system is then determined as: (A divided by N) multiplied by R2 003 million The total available for research development for the system is the balance remaining after the amount for actual research outputs has been deducted from the total MTEF research output allocation. 9.4 Institutional allocations An institution s allocation for actual research outputs is determined as: (Institutional weighted total of research outputs) divided by (system s weighted total of actual research outputs)] multiplied by (Rand total for actual research outputs calculated in above). 16

17 Only those institutions whose actual weighted totals of research outputs are less than their normative weighted research output totals receive research development funding. An institution s research development grant is determined in this way: [(Institutional shortfall between actual and normative research output totals) divided by (total of all research shortfalls)] multiplied by (Rand total for research development calculated in above). 9.5 Research development grants for 2009/10 and 2010/11 In the Ministerial Statement of September 2008, the Ministry of Education set out the allocation process which will operate in 2009/10 and 2010/11. This process has these distinct steps: Institutions were required to submit proposals to the Department on how they would use the research development funds generated by their research output shortfalls in the 2009/10 and 2010/11 financial years In November 2008, calculations were made of the Rand values of the research development grants generated for 2009/10 by institutional shortfalls. Institutions whose proposals were approved by the Minister were allocated these amounts as earmarked grants In November 2009, calculations will be made of the Rand values of the research development grants generated for 2010/11 by their research output shortfalls. An institution whose proposals were approved by the Minister in 2008 will be allocated these amounts as earmarked grants to be used on these projects. 10 RESEARCH OUTPUT GRANTS FROM 2011/ Task team on research development grants A task team, appointed by the Ministry of Education, has recommended that the current policy on the calculation and distribution of research development grants, as described in paragraphs 9.1 to 9.4 above, be discontinued from the 2011/12 financial year. These and various other recommendations of the task team will be used and adapted to produce a new research development policy, which the Minister wishes to introduce from 2011/12. The Minister will seek the advice of the CHE before taking a final decision on the implementation of this new policy Proposed new research development policy The main features of the proposed new policy would be these: % of the MTEF budget for research outputs would be distributed on the basis of the actual research outputs produced by universities. The balance of 20% would be used for research development grants. 17

18 All universities would be eligible for research development grants Research development grants would continue to be earmarked funds which would have to be employed within development guidelines to be approved by the Minister The details of these guidelines, together with explanations of the new mechanisms, will be included in a draft policy document, which will be circulated to universities during the first quarter of the 2010 academic year. This policy document will be submitted to the CHE for advice Actual research output grants An institution s allocation for actual research outputs, under the proposed new policy, would be determined as: [(Institutional weighted total of teaching outputs) divided by (system s weighted total of actual outputs)] multiplied by (80% of the MTEF total for teaching outputs). 11 INSTITUTIONAL FACTOR GRANTS 11.1 Types of institutional factor grants Provision is made in the MTEF for a single institutional factors grant to be distributed to institutions (see row 1.2 of Table 1 in section 6). This grant has been distributed to institutions in accordance with the shares which they have of the total of additional teaching input units generated by these three separate factors: the proportion which an institution has of students from disadvantaged backgrounds; the size of its FTE student enrolment; whether it is required, primarily as a result of a merger, to operate on more than one official campus (the multi-campus factor). From 2010/11 the only institutional factors included in the block grants will be those for disadvantage and size. As is explained in section 12 which follows, the multi-campus factor will from 2010/11 become an earmarked grant Grants for institutions with large proportions of disadvantaged students One of the priorities set by the 2001 National Plan for Higher Education is that of increasing the participation, success and graduation rates of black students in general and African and Coloured students in particular (2001: 35). These grants for disadvantage take account of this priority by deeming disadvantaged students to be African and Coloured students who are South African citizens. The institutional factor operates by increasing the teaching input units of institutions, depending on what proportions of their FTE enrolled students are deemed to be disadvantaged. 18

19 In the case of all institutions, other than the dedicated distance institution, a calculation is first made of the proportions they have of disadvantaged students in their contact FTE enrolled student totals. A disadvantage weighting factor is then determined for each institution.. This factor is 0 for universities whose proportion of disadvantaged students is 40% or less, and increases linearly up to a maximum 0.10 at a disadvantaged proportion of 80%. The factor remains 0.10 for those universities whose proportions of disadvantaged students are between 80% and 100%. Additional funding units are then generated by multiplying each institution s approved funded total of contact plus distance teaching input units by its disadvantage factor. In the case of the dedicated distance institution, the calculation of the disadvantage factor is based on the proportion of disadvantaged students which it has in its actual enrolment of FTE distance students Grants related to the size of institutions The size factor takes account of economies of scale as the FTE enrolment size of an institution increases. The institutional size factor operates by giving additional teaching input units to small institutions, depending on the size of their FTE student enrolments. The institutional size factor is 0.15 for institutions with up to (unweighted) contact plus distance FTE students, after which it decreases linearly to 0 for institutions with totals of or more (unweighted) contact plus distance FTE students. Additional funding units are then generated by multiplying each institution s approved funded total of contact plus distance teaching input units by its size factor. 12 MULTI-CAMPUS FACTOR 12.1 Introduction of the multi-campus factor The multi-campus factor was introduced in the 2006/07 financial year as a way of compensating merged institutions for the additional costs incurred in providing teaching services on more than one official campus. The multi-campus factor was calculated in this way: The 2004 FTE student enrolment totals of institutions which merged in either 2004 or 2005 were divided into totals corresponding to the pre-merger institutions. Separate calculations were then made of the additional numbers of teaching units which they generated for institutional size and disadvantage. The main benefit to the merged institutions of these procedures was that they received, in 2006/07, larger institutional factor grant allocations (particularly in relation to size) than they would have if their block grants had been calculated on the basis of their being single, unified institutions. The former Minister of Education accepted that the merged institutions would have difficulty in dividing their student enrolments for 2005 and later years into data files corresponding to their pre-merger campuses. The Minister therefore decided that the additional teaching units used to calculate the 2006/07 size and disadvantage grants for merged institutions would have to be used, until further notice, to calculate multi-campus grants. The totals of these additional units are summarised in Table 14 below 19

20 Table 14 Additional teaching input units for size and disadvantage allocated to merged universities: 2006/07 to 2009/10 Cape Peninsula University of Technology 6515 University of Johannesburg 5319 University of KwaZulu-Natal 2890 University of Limpopo 6742 Nelson Mandela Metropolitan University 5124 North West University 3499 University of South Africa 2448 Tshwane University of Technology 8833 Walter Sisulu University A formula-driven approach to multi-campus grants A task team, consisting of members of the Department and of HESA nominees, was appointed in 2006 to consider ways in which a multi-campus factor could be incorporated into block grant calculations. This working group considered formula-driven methods of allocating additional funds to merged institutions, but concluded that each had unacceptable consequences. The conclusion drawn in 2008 was that a modelling approach would not work in the absence of analyses of the extent to which multi-campuses resulted in higher costs being carried by institutions. When a study of actual costs had been completed, a stream of earmarked funding could be introduced for merged institutions which operate on more than one official campus Earmarked multi-campus allocations The Minister has accepted that a study of the costs involved in the multi-campus operations of merged universities should be undertaken, and that any additional funding should be allocated as earmarked grants. This cost study will be based on the uses to which merged institutions use the earmarked grants set out in Table 15 which follows. The amounts in Table 15 were determined by first calculating the amounts which the universities would have received in institutional factor grants in 2009/10 if they had not received the additional teaching input units set out in Table 14. These amounts were then deducted from the institutional factor grants which they actually received in 2009/10. The balances are set out in Table 15, and are in effect the multi-campus grants which these universities received. The universities concerned will be required to ring fence these amounts for use only on costs associated with the delivery of teaching, administrative and support services on more than one official campus. They will be expected to submit reports on the use of these funds at the end of the 2010/11 and 2011/12 financial years 20

21 Table 15 Earmarked multi-campus allocations for merged institutions: Rands million 2010/ /12 Cape Peninsula University of Technology University of Johannesburg University of KwaZulu-Natal University of Limpopo Nelson Mandela Metropolitan University North West University University of South Africa 0 0 Tshwane University of Technology Walter Sisulu University TOTAL FOUNDATION PROGRAMME GRANTS 13.1 Universities were invited, during 2009, to submit applications for the cycle of foundation funding which will run from 2010/11 to 2012/13. These applications were assessed by a working group consisting of academic development specialists and members of the Department The working group s recommendations have been approved by the Minister, and universities have been advised what their foundation programme grants will be during 2010/11 to 2012/ INFRASTRUCTURE AND EFFICIENCY FUNDING 14.1 Row 2.3 of Table 1 in section 6 shows that a total of R3 200 million has been allocated in 2010/11 and 2011/12 for improving institutional infrastructure and student output efficiencies. The Ministry of Education decided that this amount had to be used in ways that would lead to increases in the numbers and quality of graduates in engineering, life and physical sciences, teacher education and the health sciences. Improved provision had also to be made for students in official student residences All universities had, by the end of December 2008, submitted applications for this government funding. The applications total was R9 766 million, which was more than three times higher than the R3 200 million available. These applications were assessed by the Department and projects were recommended, taking account of the conditions set in advance by the Minister One of the conditions laid down by the Ministry of Education was that each university had to contribute funds from its own resources to approved projects. Institutions with strong balance sheets would be expected to contribute up to 50% of the cost of approved projects. The contributions of other institutions would fall in the range 10% to 40%, depending on the Department s assessment of their balance sheets Institutions will, in terms of the projects approved by the Minister in March 2009, add R2 247 million to the government allocation of R3 200 million. This will raise the total 21

22 2010/11 and 2011/12 investment in the infrastructure of the higher education system to R5 547 million, with the institutional share of this investment being 41%. 15 CLINICAL TRAINING GRANTS 15.1 Row 2.5 of Table 1 in section 6 shows that clinical training grants will be R330 million in 2010/11 and R350 million for 2011/ The Department of Higher Education and Training s Health Sciences Review Committee of the Department of Higher Education and Training has recommended to the Minister that a revised formula be used to distribute these clinical training grants. The main recommendations are these: The list of programmes eligible for clinical training grants should be expanded to include programmes in nursing and clinical programmes offered by universities of technology and comprehensive universities The formula used for allocating these funds should be revised. The formula should, however, continue to be based on the head count totals of students in programmes which require students to have access to the patients, staff and facilities of provincial hospital services Full details of the new clinical training grant policy will be sent to universities when it has been approved by the Minister. 16 VETERINARY SCIENCES 16.1 Provision is made for the allocations for veterinary sciences to move from the block grant to the earmarked category of funding. The amounts involved increase from R67 million in 2009/10 to R106 million in 2010/11 and to R116 million in 2011/ The allocations for 2008/09 and 2009/10 were intended to assist the University of Pretoria, and other institutions involved in the provision of veterinary specialisations, to meet the operational costs of clinical veterinary training, in the absence of contributions from the Department of Agriculture. The new amounts are intended to serve the same purposes, and at the same time function as incentives for institutions to change the equity profiles of their students, to improve the distribution of veterinary specialisations through institutional cooperation, and to increase the numbers of students completing veterinary degrees Universities involved in veterinary training will be required to submit to the Department plans and budgets for the use of these funds over a two year period. The release of the funds for 2010/11 will be conditional on the approval by the Department of these budgets and plans. The release of the funds for 2011/12 will be conditional on the approval by the Department of a progress report for 2010/11 and an audited report on actual expenditure. 22