UNIVERSITY OF TEESSIDE

                    FINAL REPORT-September 2002

             PROJECT (GMP116)

1.    Project Partners

      University of Teesside
      Darlington College of Technology
      Hartlepool College of Further Education
      University of Sunderland

STRAND 1 – Disaggregation of Student/Teaching Loads and Income &
Expenditure Account to Programmes of Study

2.    Stage 1. - Course Costing at the University of Teesside using 1999/00

      The process adopted for the collation of records for all activities was one that
      built on the high level records produced for the Transparency Review (T, R,
      O.) The Good Management Practice project took this data and broke direct
      costs down to Modules, Research Sponsor, and Other Services.

      This was produced by analysing: -

      a) Data collected on the academic workload forms to provide the split of
      teaching time at module level.

      b) Data from the student record system to provide the building block between
      modules and courses. (Approximately 440 courses)

      c) Appropriate cost drivers for specific indirect cost heads (e.g. staff numbers
      for Personnel & Payroll department costs, floor area usage for premise costs.)

2.1   Presentation of 1999/00 Data

2.1.1 Subject Area Level

      The data was presented to the Good Management Practice Steering group and
      the University of Teesside Senior Management Board. An example of the data
      for 2 of the 69 Subject Areas is attached at Appendix 1 for information.

      For 1999/00 the University’s average Academic Departmental Cost, expressed
      as a percentage of Total Relevant Income, was 62%. This percentage was used
      as a benchmark for all Subject Areas and a listing of ‘at risk’ subjects was
      produced for Senior Management Review, where the Academic Departments
      Costs were greater than 20% above the benchmark.

2.1.2 Management Action

      The data was used by the Senior Management Board (Vice Chancellors
      Executive) and School Directors in the University’s 2001/02 Resource
      Allocation, particularly in agreeing the Schools staffing models and the
      allocation of it’s capital investment funds.
      The staffing models agreed for 2001/2002 took account of changes to the
      1999/00 records for staff and student numbers.

      The data also provided management information to assist in the continuing
      review of the academic portfolio.

2.1.3 Course Level

      A summary of total income & expenditure for each Course was produced by
      building up the income and expenditure to courses, using the Student Fte’s
      recorded on the modules used by each individual course.
       A listing of the 20 courses generating the highest ‘surplus’ and 20 generating
      the highest ‘deficit’ was then produced for Management review.

2.1.4 Management Action

      New procedures have been implemented for the approval of new course
      provision. For each new course proposal, a detailed costing as well as written
      justification is submitted for Management approval.

2.2   Continuing Practice

2.2.1 Teesside

      Following the collection of this data the University has decided to produce
      annual statements at subject area level by activity in year by taking the
      Transparency Review data to subject area /sponsor level and projecting it
      forward to take account of changes in income, expenditure levels and student
      data to provide more timely up to date information for management action.

      E.g. 2000/01 Transparency review at Subject area/sponsor by January 2002
      BUT then updated to reflect 2001/02 forecasted income and expenditure
      variations based on Student and Staff numbers.
     This information was presented at the Spring 2002 Management Conference
     and was used as part of the process of determining the operating levels for
     2002/03. (Papers attached at Appendix 2)

     As a result of this processes a further 15 academic posts were removed from
     the establishment of declining areas and transferred to academic growth areas.

     The information was well received at the Management Conference and the
     data produced in future years will continue to assist in the decision making
     process and form part of the University’s Resource Allocation Model.

     Overhead percentage rates have been calculated from the information for the
     different activity types (T, R, O) within each subject area/department. These
     rates are being incorporated into Teesside’s Costing & Pricing strategy to
     ensure that, where possible, full costs are recovered.

2.2.2 Sunderland

     The University of Sunderland requested to be observers on the Strand 1
     project and has been monitoring the progress of work carried out at Teesside
     to facilitate the possibility of adopting these processes within their own

3.   Stage 2. – Course costing Indirectly Funded courses.

     The University of Teesside has worked with Hartlepool College of Further
     Education and Darlington College of Technology who have now produced
     Total Income and Expenditure statements for indirectly funded courses
     delivered in 2000/2001.

     The College costings indicate that the level of funding made available by the
     University of Teesside to the Colleges for Franchised courses, which is set at
     75% of the standard unit of resource for courses taught at the colleges and
     60% of the standard unit of resource for courses delivered by the colleges on
     the University’s premises, is an appropriate price.

     A copy of Teesside’s funding agreement with its Higher Education Business
     Partnership (HEBP) for 2002/2003, which incorporates these proposals, is
     attached at Appendix 3.
STRAND 2- Cost Benefit Analysis of Central Departments

4.    Background

      In the past the University’s Central Support Unit efficiency savings were
      achieved by typically applying a common percentage target across all units.
      Whilst this approached was successful in producing significant annual
      improvements, it was widely recognised that this iterative approach could not
      be continued indefinitely. The need was identified to develop a management
      tool that would allow the University to:

             assess the relative efficiency and effectiveness of its Central Support

             identify areas where effectiveness could be enhanced through the
              deletion of duplicate and redundant tasks: and

             identify areas where the University may wish to consider the
              reorganisation of the provision of its key services.

5.    Progress to date

5.1   A firm of external consultants were appointed by the University to review the
      efficiency and effectiveness of the activities carried out by the Central

      The consultants presented a report to the Management team in the spring of
      2001. The report produced by Vantage Point:

             included 9 recommendations for immediate implementation;

             identified 20 areas where they recommended that the University should
              carry out further work; and

             identified 3 areas that should be kept under review in the short to
              medium term.

5.2   The University accepted all nine recommendations for immediate
      implementation. It is anticipated that this will produce recurrent cost savings
      of £90,000 p.a. and additional income generation of £65,000 p.a. by 2003.

      As the potential impact of change, in some of the areas identified within the 20
      for further study, was much greater than others, the University decided that a
      more comprehensive investigation should be undertaken.
      As a result, review groups were established to undertake critical reviews in
      association with all stakeholders.
      The review reports were presented to the University’s Senior Management
      Conference, which debated the recommendations of the reports and agreed to
      implement the structural reviews affecting:

               the organisation of the Department of Estates and University

               the role, responsibilities and structure of the Quality unit;

               the alignment of staff development and other related activities within
                the University;

               the management, co-ordination & development of IT systems within
                the University;

               the function and terms of reference of the Centre for Lifelong

      (A copy of the above mentioned review reports are attached at Appendix 4.)

      These structural changes have been implemented with effect from 1st August
      2002 and have resulted in efficiencies of c. £230,000.


6.    Regular presentations by all Good Management participants are made to the
      NEBUFDG. A presentation of the final report will be made at the next
      meeting of NEBUFDG.

7.    The University has created a web page, which contains information about the
      project, on its web site. The web page address is

10th September 2002

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