England¡¯s funding council has been described by one sector expert as ¡°out of place in the new funding environment¡±, amid suggestions the government is considering the role and future of the organisation as part of major changes to regulation.

A speech by Jo Johnson, the universities and science minister, at the Universities UK conference described the sector¡¯s regulatory system as ¡°ripe for simplification¡±, indicating that would form part of the government Green Paper to come later in the autumn. The Green Paper had previously appeared likely to centre mainly on the teaching excellence framework.

Mr Johnson¡¯s speech, at the University of Surrey, called for ¡°a simpler, less bureaucratic and less expensive system of regulation¡±. This should be a system that ¡°explicitly champions the student, employer and taxpayer interest in ensuring value for their investment in education¡±, while also protecting ¡°institutional autonomy and academic freedom¡±, he said.

Changes to the role of the ³ÉÈËVRÊÓƵ Funding Council for England, which is funded by the Department of Business, Innovation and Skills, could deliver savings for BIS in the spending review. BIS, like all non-protected departments, has been asked to model scenarios for 25 per cent and 40 per cent cuts for the spending review, which sets a framework for departmental spending up to 2019-20. BIS¡¯ resource budget is ?13.1 billion in 2015-16.

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Emran Mian, director of the Social Market Foundation thinktank, who was lead civil servant on the Browne review, said of Hefce: ¡°I¡¯m struggling to see what its role should be¡­It distributes QR [quality-research] funding. Research Councils UK could handle that. Funding for higher cost subjects can be distributed via a formula devised in the department.¡±

Mr Mian also suggested that the TEF could be run by the Quality Assurance Agency.

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¡°I don¡¯t have any kind of axe to grind against Hefce and there are some great people there, but it feels out of place in the new funding environment,¡± he added.

But Gordon McKenzie, chief executive of GuildHE and former deputy director for higher education strategy and policy in BIS, said that ¡°the main risks¡± of significant changes to Hefce¡¯s role ¡°are a loss of expertise and the loss, or weakening, of the important role arm¡¯s length bodies like Hefce have played in the success of English higher education¡±.

He added that ¡°you can¡¯t assess the extent of those risks without knowing more about [the] government¡¯s ¡®simpler¡¯ vision for regulation and research funding. Is it reform plus continuity (like the 2011 White Paper)? Or is it radically disruptive? Jo Johnson¡¯s assurances on dual support and [the] Haldane [principle] seem to suggest that for research, at least, it¡¯s more like reform plus some continuity.¡±

By calling for major regulatory changes, including ¡°faster¡± routes to degree-awarding powers and university title for private providers, Mr Johnson¡¯s speech was judged by some observers as setting the course for a higher education bill in the next Queen¡¯s Speech.

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Meanwhile, it is thought that there is as yet no final decision within government as to whether the decision to abolish student maintenance grants and replace them with loans, announced in July¡¯s summer Budget, will count as a saving for the purposes of the spending review.

If the move ¨C which BIS says will save ?2.5 billion ¨C does not count, then the department will have to identify further sources of cuts. BIS has submitted that the grant savings should be treated as part of the spending review, but the Treasury will make the final decision.

john.morgan@tesglobal.com