HESA Subscription - how we calculate our statutory fee
For FAQs regarding your invoice or the email supporting it, please visit our FAQs page. HESA Subscription and HERA provides a full explanation of how our approach relates to the Higher Education and Research Act 2017 (HERA).
In the allocation of costs and their apportionment to individual providers, HESA has to abide by guidelines linked to its role as designated data body.
The two main principles are:
1. In allocating costs to any given service or activity, a proportion of HESA overheads and indirect costs are allocated to that service or activity. We are unable to cost an activity as a marginal activity, meaning that every line of business is fully cost-reflective.
2. HERA requires the distribution of costs between England and the rest of the UK to reflect the differences in services provided. England cannot subsidise other nations and other nations cannot subsidise England. This contributes to the subscription fees being different in each country.
The following diagram and detail below explain how HESA applies these principles and how the costs are reflected within your subscription.
Cost apportionment - national differences
As with all businesses, HESA’s total costs are split between the direct costs of delivering the activities we provide and the overheads of supporting them and running a charitable organisation. An example of a ‘direct cost’ is the cost of hosting and the software development of the Issue Management system, with the support of our Legal team being an ‘overhead’.
This total cost of running HESA is split between our core activities: collection, dissemination and training and a contribution towards the costs of the Data Futures programme.
To apportion the cost of these activities to the nations for which the costs are incurred, the cost of these activities is allocated to collections, as mandatory collection requirements differ across the UK.
The national requirements for collections are then used to apportion the costs to the nations. To do this, an appropriate cost driver is used for each collection. For example, the number of students for the student collection or number of staff for the staff record.
Once the total cost for a nation is identified, where appropriate these costs are split between statutory and non-statutory collections.
By doing this, it is possible for a total cost, including an appropriate proportion of overheads, as required by HERA, to be attributed to each nation.
Cost apportionment - fair and transparent
Developing a fair and reasonable way to distribute the total national cost across the population of providers is the final step.
The subscription is allocated across two different components, a per-provider fee and a per-student fee. This method allocates fees fairly between nations and between providers.
The per-provider fee reflects the fact that a significant amount of the costs incurred by HESA are fixed and driven by provider numbers rather than student numbers.
The per-provider fee remains fixed for the subscription year, in both subscription periods.
The per-student fee ensures that smaller providers are not disadvantaged as larger providers pay a greater proportion of the costs.
The per-student fee can vary between subscription periods. By varying the per-student fee between subscription periods HESA can recuperate additional costs or share savings during the year, as per the requirement in HERA.
HESA Subscription - how your total fee is made up and charged
Statutory services and non-statutory / optional services
Separate subscription models apply to statutory and non-statutory/optional activities. The subscription rates for statutory activities cover only the costs of providing statutory services. Non-statutory activities are subject to VAT, but statutory activities are not.
See HESA Subscription Model for details.
Graduate Outcomes is deemed to be a statutory activity in the above model. It has been separately identified in invoicing to allow continuing visibility of the costs which have previously been invoiced separately. See Graduate Outcomes Subscription.
Our subscription year runs from 1 February to 31 January. This will be made up of two subscription periods, each covering six months. Subscription fees will be invoiced twice a year to cover these subscription periods and allows for any potential adjustments during the year.
Graduate Outcomes will also be invoiced twice a year on the same February to January schedule.
Heidi Plus will continue to be charged on an August to July model. The full year's cost will be included in the invoice for the August - January subscription period for providers in Scotland, Wales and Northern Ireland. More details, and applicable rates are explained on the Heidi Plus Subscription pages.
Total subscription – how this is shown
The total subscription will include the statutory fee plus any optional services. Services that are included in the statutory fee vary between nations - see Subscription model information for detail.
Why are the fees higher in England?
Additional HE providers have a greater effect on HESA’s costs than additional students. HESA must ensure that costs are apportioned fairly between England, Wales, Scotland and Northern Ireland. England has a large number of HE providers including many small and specialist providers so the costs per provider are higher after apportionment between the nations.
To ensure that smaller providers in England are not unduly penalised by a very high per-provider fee, the per-student fee is increased to ensure fairness and proportionality within England.