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Background

The Transparency Review is a Government initiative, introduced in the present Administration's first Comprehensive Spending Review in 1998. The CSR awarded £1.5bn of additional funding for Higher Education, but the Treasury made this conditional on the sector becoming more open about the way funds are spent in universities and colleges.

It was a Treasury requirement of the Funding Councils that the sector participated in this review. A Transparency Review Steering Group (TRSG) was set up to implement the policy. The TRSG is chaired by Dr John Taylor (Director General of the Research Councils) and has a number of HE sector representatives.

TRSG delegated the task of developing methods for transparent costing to an existing HE sector body, the Joint Costing and Pricing Steering Group, chaired by Professor David Westbury - Vice-Principal at Birmingham University. JCPSG commissioned J M Consulting to advise on methods that could be used to account transparently across the diverse sector of 175 institutions, and that would also meet institutions' own internal management needs, and those of external sponsors of research.

J M Consulting consulted very widely in the sector - over 50 institutions attended regional workshops, and every institution was invited to a national seminar hosted by CVCP. Their advice was addressed to Government in the Transparency Review (TR) Report. This was endorsed in June 1999 and is now required policy for the sector. Copies of the report are in every institution, and it can also be seen at http://www.jcpsg.ac.uk/

Requirements

The key elements are that;

1. Every university and college has to implement new costing methods which will satisfy the standard in the TR Report.
2. All institutions have to report transparently on the costs of their Teaching (T), Research (R), and other activities (O) for 1999/2000 in July 2001. Research-intensive universities and colleges should have piloted their time allocation method being used to collect data prior to the 1999/2000 exercise.
3. Implementation is phased over five years, with full transparency being achieved by the use of robust methods before the end of 2003/4
4. The key requirement is to calculate the total costs of T, R and O at institutional level (splitting T and R between Publicly funded and non-publicly funded activity), once a year, in a manner that is built up from costs at the level of academic departments.
5. Institutions must also use the department-level costs to calculate new and more robust indirect cost rates for T, R and O in the different type of academic department (classroom based, laboratory-based, clinical)

The standards in the TR report build upon good practice in the sector, but no institution was doing (4) and (5) in a way that satisfies the new costing standards and this will be a significant new requirement for every institution. Detailed advice is available in the Guidance Manual, which includes certain mandatory instructions including definitions of Teaching, Research etc.