HE-BCI in-kind consultation outcomes
The HE-BCI Phase 2 Consultation was published 1 February 2023 and closed 31 March 2023. We received 61 responses; 58 from higher education (HE) Providers, and 3 from member organisations representing HE providers.
The aim of the consultation was to acquire feedback on proposed amendments to the recording of 'in-kind' contributions within the HE-BCI data collection. The consultation asked questions on both Approach 1 (the proposed approach) and Approach 2 (the current approach). Approach 1 proposes to adopt revisions to existing guidance on 'in-kind' contributions, including:
- A general introduction to contributions.
- Definition of contributions.
- Types of contributions.
- Methods for assigning values.
- Methods for reporting contributions across multiple HE providers.
- Methods for reporting contributions across multiple years.
- Collecting and reporting – methodologies.
This report will summarise the key findings, and responses from the consultation.
Summary of findings
- 92% of participants think that the definition of 'in-kind' contributions in Approach 1 is clear and implementable, compared to 57% for the current definition.
- 90% believe that the revised 'Types' guidance is clear and supportive. On the other hand, 59% thought that this was not the case for Approach 2.
- The majority of respondents believe that the revised guidance for multi-partner (74%) and multi-year (80%) projects is clear and implementable.
- 52 participants (85%) consider the guidance outlining required level of accountability clear and implementable.
- For the burden assessment on the 'set-up' of Approach 1, the most common scores were '1–3' and '4–7', both having 23 (38%) respondents. Participants who selected '1–3' in the burden assessment believe that Approach 1 can be fitted into business as usual, with limited training or guidance needed. '4–7' reflects the view that minor to medium changes will need to occur, as well as bespoke training.
- The mode score for the burden assessment on the 'run' of both Approach 1 and 2 was '1–3'. 44% selected this option for Approach 1, and 51% for Approach 2. By choosing this score, respondents believe that running both approaches will have no discernible impact on the current operating model.
Summary of outcomes
Participants were generally supportive of the proposal to adopt revisions to existing guidance on 'in-kind' contributions in Approach 1. Many respondents stated that the attempt for greater clarity was welcomed, and the proposed approach was mostly preferred over the current approach (Approach 2). However, there was still feedback provided on how to improve further.
As a result of this consultation, the proposed guidance will be amended to support areas highlighted by participants where appropriate. We also received a number of questions within the responses to the consultation questions. We will be taking these into account when writing guidance and planning user support. In areas in which suggestions have been made that are outside our remit, we will share feedback with other bodies, which may be in a better position to consider acting (e.g. UKRI or Praxis Auril).
The changes to the 'in-kind' guidance will come into effect for the 2023/24 (C23032) HE-BCI data collection, with the aim of reducing burden for providers.
This section will be examining the qualitative responses provided for questions 4 onward, as questions 1–3 contain identifying information.
In-kind contributions: background information in the general introduction to the record
Question 4 requested general comments on Approach 1. Within the responses was a suggestion for a change to the proposed additions to the general introduction to the record within the Coding Manual. This was to remove the words "where possible" in the introduction guidance when referring to assigning economic value.
The wording on assigning an economic value to 'in-kind' contributions has been amended to remove "where possible" from the proposed statement:
"However, to allow for comparability of contributions received by providers they are to be, where possible, assigned an economic value".
This is in order to reflect the rest of the guidance and remove potential ambiguity.
Definitions of in-kind contributions
Q5: Is the revised 'Definition of in-kind contributions' clear and implementable? If you answered 'No', please provide more information.
In response to question 4, there was a suggestion to include a definition from Approach 2, which highlights contributions from non-academic collaborators.
As shown in the table above, the majority of participants (92%) agreed with the proposed definition. 12 respondents provided further information on their answer. Most of the responses to this question referred to the need for more clarity in the definition of 'in-kind' contributions. Some respondents indicated a need for greater clarity on certain terms in the definition. These included:
- Intangible assets
- Social, or cultural value.
The issue of jargon in the HE-BCI definitions was raised, citing a need for HESA to evaluate how smaller institutions interpret the definitions.
Inclusion of a statement for clarity, which recognises that 'in-kind' contributions:
"…are contributions made by non-academic collaborators of a project and may be stated in initial letters of support or project agreements".
For further guidance on the terms raised above, please contact [email protected] with your examples. Further discussions around these areas can help to establish examples, which can be evaluated for inclusion in future guidance.
Types of in-kind contributions
Q6: Is the revised 'Types' guidance clear and supportive? If you answered 'No', please provide more information.
90% of respondents believe that the proposed 'types' guidance is clear and supportive. 11 participants provided more information on their answer.
Some respondents highlighted a need for clarification in the guidance on the term "staff time", to specify that this is staff time of the collaborating partner. Other guidance amendments that were proposed include explicitly defining 'in-kind' contributions as activities related to undertaking the collaborating partner’s own research.
There was also the suggestion that some examples given are "hyper-detailed" and needed to be more general. However, in other areas, such as cultural value, one participant stated that the list was ambiguous, and another stated the references were unclear. Respondents who felt the guidance lacked clarity were divided on whether the examples were overly detailed or overly general.
Question 7 asked participants if there were any additional types of contribution that they felt should be given as an example. We received 53 responses to this question. 43 participants (81%) did not identify any additional types of contributions needed. The most common justification given for this answer was that participants felt that the guidance provides clear and comprehensive examples.
However, a variety of suggestions were made for additional examples which could be included in the guidance. This included specific examples relating to staff time, intangible assets, SME contributions, and estimating costs for the use of:
- Advertising and Publicity.
The guidance on staff time has been merged into one statement, reading:
"Staff time from non-academic collaborators for those working directly on the project, including pro bono professional services, legal advice, marketing advice, staff cover (covering those working directly on the project)".
This is to remove potential ambiguity or duplication around the recording of staff time from non-academic collaborators as an 'in-kind' contribution.
We have not currently added additional examples, but welcome further feedback through the data collection process to determine what further examples might be helpful.
Methods for assigning values to in-kind contributions
Q8: Is the suggested method for assigning values clear and implementable? If you answered 'No', please provide more information.
15 respondents provided additional information to their answer on question 8, which we summarise below:
Feedback on the clarity of this method was mainly positive. However, one respondent suggested there was a need for easily understood guidance for partners. Some participants also felt that the method was not clear on intangible assets and assigning values to projects with cultural value. This was also raised in response to question 6.
Some participants noted the administrative burden this method would produce. One stated that the method is "very focused on industry projects and tangible contributions" which is "too prescriptive". Another stated that it would be costly and time consuming for providers to obtain market values, and suggested publishing acceptable ranges for the application of market values to 'in-kind' contributions.
In addition, one participant identified that this method would result in the need for structural process changes. Responses to question 4 also highlighted the burden that small changes would have, stating a need for staff training.
Comparability and Consistency
A criticism with Approach 1 that was raised in responses to questions 4, 8, and 11, is that standardised methodology is not imposed. This raises concerns that comparability and consistency will be affected. Alternatively, in response to question 4 it was recognised that flexibility allows for providers to continue with current methods, but also provides guidance on how to implement to those organisations who do not have a method.
Question 16 asked if organisations used an existing method to assign values. 31 respondents did not have a method, whilst 30 did. Some participants highlighted that their current method is similar to the proposed method in Approach 1.
There was a request for additional guidance on:
- How providers might be able to assign costs to a project retroactively.
- How 'in-kind' contributions will be featured in Higher Education Innovation Fund (HEIF) allocations and Knowledge Exchange framework (KEF) in the future.
- How to source market values to ensure consistency.
When referring to reporting an assigned economic value of 'in-kind' contributions, we have made an inclusion to the guidance to suggest that collaborators may wish to assign values in letters of support or project agreements.
As stated previously, in order to seek guidance over your examples of complexity in assigning value to intangible assets, or to contributions with cultural value, contact [email protected] during data collection.
In order to mitigate burden, the proposed guidance will come into effect for the 2023/24 HE-BCI data collection. We do not intend to publish guidance on market values as these will change with time and context, and may lead to distortive effects in the data. The sector may wish to consider formulating appropriate standards to aid comparability and consistency, working through sector representative organisations. If a sector-recognised standard was produced and deemed credible by end-users of the HE-BCI data, we would be happy to include a link to such a document in the guidance.
UK Research and Innovation, the Office for Students, Higher Education Funding Council for Wales, Scottish Funding Council and the Department for the Economy Northern Ireland have confirmed there is no requirement for all providers to use a single method for assigning economic values. Instead, they require that providers are confident in their chosen method, and that their valuations meet a threshold of accountability required for audit as specified in the guidance.
Our goal in improving data quality is to support trust in its value for use by public bodies and others. Decisions about the use of data in funding algorithms is a matter for the funders.
Methods for reporting in-kind contributions across multiple HE providers
Q9: Is the revised guidance for assigning values to contributions made as part of a multi-partner project clear and implementable? If you answered 'No', please provide more information.
In response to question 9, 74% thought that the revised guidance for assigning values to contributions made as part of a multi-partner project was clear and implementable. This is an increase of 32 percentage points from question 14, which asked the same question about the current guidance. 22 participants provided additional feedback on their answer in question 9 and are summarised below.
One respondent stated that the proposed guidance may encourage unequal apportioning. Another suggested clarity was needed to highlight that if providers are unable to agree on the split of 'in-kind' contributions, then they should default to an equal split.
Some participants also highlighted the need for further clarification on overseas partners, as this has been omitted from the proposed guidance.
Participants generally found the guidance to be useful and clear, but had concerns on implementation. It was highlighted that the guidance would be difficult to implement on a short timeframe, and without wider change in the sector.
Comparability and consistency
One person had concerns that the proposed method for multi-partner projects is vague, and as a result there is "no guarantee everyone is doing the same thing".
There was concern from some participants around the administrative burden of negotiating values for a multi-partner project. One person stated that there should be a "straight split across all projects to simplify the process". Another stated that formalising partner contributions may lead to a loss of income.
Additional guidance was requested on "the process on how evidence of different contributions between partners would be assessed". A suggestion was also proposed in question 8, for guidance wording to be developed for a standard clause in contracts that defines 'in-kind' contributions and asks the partner to quantify it.
We have added two statements to the proposed guidance for further clarity. The first clarifies what should be done when higher education providers cannot agree on apportioning contributions:
"Where higher education providers (HEPs) cannot agree how to apportion contributions between them they must default to an equal split".
We recognise that an equal split may not always be optimal, and where providers in a multi-partner project agree a different approach they should maintain an appropriate audit trail.
The second provides information on overseas partners:
"Where an overseas HE provider is a collaborator on a project, their share of any 'in-kind' collaboration should not be returned by the UK-based partners".
As mentioned previously, the guidance will be coming into effect for the 2023/24 (C23032) HE-BCI data collection to mitigate the burden of implementation.
We were asked to provide standard wording for contracts; however, this is not something we would reasonably expect to take a position on. Suppliers of data will understand that such advice could only be provisional, as it is for contracting partners to determine the approach that will be taken over reporting requirements, and also over dispute resolution. However, it is generally good practice to make provision for data reporting requirements in legal documents, and this may be a matter where the HE sector may wish to consider formulating appropriate standards, perhaps working through sector representative organisations. If a sector-recognised standard was produced and deemed credible by stakeholders in the HE-BCI data, we would be happy to include a link to such a document in guidance.
Methods for reporting in-kind contributions across multiple years
Q10: Is the revised guidance for assigning values to contributions made as part of a multi-year project clear and implementable? If you answered 'No', please provide more information.
As shown above, 80% of participants agreed that the method on multi-year projects was clear and implementable. 15 respondents gave additional feedback in response to this question.
A request from the previous question (9) was for additional guidance on what to do when a project is extended.
It was stated by one participant that the proposed guidance is now clearer on how to handle unanticipated contributions. Another suggested that the guidance should clarify whether contributions stated at the start of the project can be revised throughout the project with retrospective effect. Further clarity was also requested on how 'in-kind' contributions should be recorded if they should change across the lifespan of the project.
Some respondents were concerned about the additional administrative burden of implementing the multi-year guidance. One person stated that this was "the most burdensome of all the proposed changes". Another person highlighted that as a result of the proposed guidance, additional negotiations could potentially slow down contracts, which was believed not to be in the spirit of the Tickell review of research bureacracy.
The section which provides guidance on where a project is extended has been amended for clarity. This now reads:
"Where the life-cycle of a project is extended any contributions received must be apportioned in line with providers’ own financial accounting practices: either reported to specific years as allocated, or pro-rated across the remaining project years (i.e. in a manner consistent with the approach taken to contributions allocated to a specific year of the project, covered in the above guidance). Where the HE provider’s financial year differs from the HESA reporting year, data should be returned as appropriate for the HESA year and in a way that avoids double counting".
In addition, we have now added to the guidance a worked example of pro-rating funds across project years.
In response to requests for clarity in reporting 'in-kind' contributions throughout a project, guidance for in-year contributions has now been introduced. This states:
"In-year contributions may be made to a project. These may be in addition to those stated in the letter of support or initial project agreement. If a contribution is allocated to a specific year(s) of a multi-year project, providers must report these in line with their own financial accounting practices: either reported to specific years as allocated, or pro-rated across the project years. Where the HE provider’s financial year differs from the HESA reporting year, data should be returned as appropriate for the HESA year and in a way that avoids double counting.
Where contributions are not allocated to a specific year(s) of a multi-year project, providers should pro-rata 'in-kind' contributions across all years of the project from the point at which they are known.
Please refer to previous guidance for examples".
We acknowledge that across-year reporting may be more burdensome for some than prospectively reporting all contributions at the start of a project. We consider this additional burden to be proportionate to the improvements in the reliability and consistency of the data by reporting in this way. We also believe that this shared approach can improve the confidence of HE providers when reporting 'in-kind' contributions and support a fairer and more trustworthy comparison of values.
Collecting and reporting – methodologies
Q11: Is the revised guidance outlining the required level of accountability clear and implementable? If you answered 'No', please provide more information.
85% of participants agreed that the required level of accountability for Approach 1 is clear and implementable on Question 11. 13 respondents provided additional information on their answer.
One respondent stated that the proposed guidance was welcomed, as the current guidance lacks clarity on auditability which has led providers to under-report 'in-kind' contributions. However, some participants felt that the guidance still lacked clarity on auditability. One stated that the process of doing internal audits are unclear, whilst another requested clear statements on possible future audit, and how this could affect HEIF allocation.
Some participants highlighted issues with implementation which have been noted across other questions. These issues include resourcing, training, and the financial implications of a formal agreement across partners.
Comparability and consistency
As mentioned in responses to previous questions, some participants raised additional concerns in Question 11 around the comparability and consistency of using best judgement as a methodology. One respondent stated that this method would favour smaller providers which have fewer contracts, as they’ll be able to "offer more scrutiny". Another participant believed that removing financial audit could potentially cause returns to be exaggerated.
No changes have been made to this section of the proposed guidance. We believe that the proposed guidance mitigates concerns of financial audit which has historically led to the under-reporting of contributions.
The revisions provide guidance that providers must document and retain justification for the valuation of contributions. This aims to improve the quality of the data and promote confidence in the reporting of 'in-kind' contributions by providers and its users.
We will be implementing the changes to the 'in-kind' contributions guidance for the 2023/24 (C23032) HE-BCI data collection, which has been agreed by our statutory customers. Providers are advised to start preparing for the changes as result of this release. We will be publishing a full Notification of Changes in Spring 2024, which will include the outcomes published in this report.
Annex A: Full text of changes to in-kind guidance
We have drafted the planned full text of changes to the 'in-kind' guidance which will be within the Notification of Changes. We will publish the text as guidance in a future coding manual release, but it may be subject to change ahead of publication, which we will communicate at the point of release.