Chairman's foreword
This is the sixth and last time that I shall write the foreword to the Agency's Annual Report. I was first invited to chair the Board of the new Agency in December 1996 and given the initial brief of bringing together the quality assessment work of the former Higher Education Quality Council and the English, Welsh, and subsequently the Scottish, funding councils. That early period was not plain sailing because we were required to complete a further four years of work inherited from the previous quality assurance regime, notably in England, while attempting to concentrate minds on developing a new, unified, less onerous, but equally rigorous, method of assessment.
The Dearing agenda of 1997 on quality and standards presented a huge undertaking for the Agency. In the event, the sector decided to take a selective view of the many proposals which had found their way into that ambitious report. Six years on, I am confident that the recently introduced, more flexible, approach to quality assurance has the potential to deliver fair and secure judgements without undue burden, and I am pleased that the principle of self-regulation, based on external peer review, has been upheld. At the same time, by accommodating some legitimate and imaginative national variations within the new audit process, it has been possible to preserve a strong consensus in favour of maintaining consistent standards in all academic awards across the UK.
The issue of standards is fundamental, both nationally and internationally. I welcome the fact that the Agency is being called upon to play a leading role, especially in Europe, in attempts to develop some clear thinking and some accurate definitions for the benefit of all concerned. At the same time we should be alert to the threat of a rising tide of regulatory bureaucracy.
The rapid expansion of higher education in the UK during these last ten years or so, which is set to continue, has put significant financial strain on many parts of the sector.
There is concern that this may lead to a lowering of the quality of what is on offer to students, and of what is expected of them. The Agency will have a central role to play in providing the reassurance that this has not been allowed to happen. It is of paramount importance that the standards and worth of academic awards are maintained, and with them the high reputation of UK higher education.
You will find a full account of the Agency's continuing work in this Annual Report. It remains for me, on behalf of the Board, to thank our Chief Executive and every member of our staff, together with a great number of conscientious and talented individuals who advise and help us in so many ways, for all their valuable work. To Board members and to members of our committees, past and present, I offer my sincere thanks for your support and your friendship. The Agency and my successor have my best wishes for the future.
Introduction by the Chief Executive
In the year covered by this Report the Agency redefined and restated its mission, purposes and values - what it is for, what it is trying to achieve and what it believes in - in a Strategic plan. Central to this is the public interest, which embraces not only the need for high quality higher education, but also a strong, autonomous community of institutions, able to respond in their own ways to the challenges of mass higher education, and recognising the importance of their work for students, employers and the cultural well-being of our society. Far from being an inspectorate of prescriptive snoopers, the Agency sees its role as protector equally of core academic values and the interests of students and society more widely.
The Agency's good intentions, though, will not be worth very much if it does not deliver reliable judgements and information about academic standards and quality, which are the core of its work. After two years of feverish development we are now beginning to build up, through our audit and review programmes, a new picture of how well higher education is doing. The general findings to date show no major systemic weaknesses, but this judgement has been qualified in a number of cases where institutions were involved in collaborative arrangements with other bodies. And we have not yet seen convincing evidence that student assessment is receiving as much attention as it will need to if the current levels of broad confidence are to be maintained in the future.
The assurance of academic standards and quality is a necessary and beneficial activity, but it is important not to make it more complex or burdensome than it need be. We welcomed the establishment in 2003 of the Better Regulation Review Group. Although the Agency does not have regulatory powers, we do recognise that we make considerable demands on institutions' time and energy. We believe that this is not wasted time or energy, and that the benefits to institutions, as well as to students and others, are considerable. But it is right that we should be asked to ensure that we are not making unreasonable demands on institutions.
We remain one of the world's leading quality assurance agencies, producing ground-breaking work that is recognised and used in many countries. I should like to record here my thanks to our staff for their dedication and unstinting commitment to our work, which is described in more detail in the pages that follow.
Our first Chairman, Christopher Kenyon, has retired from the Board after seven lively years at the helm. I should like to thank him for being a staunch and effective advocate and defender of the Agency and its work.
What we did in 2002-03
Safeguard
We safeguard the public interest in the academic standards and quality of higher education across the UK. We undertake reviews, and assess and judge the confidence that can be placed in the qualifications that higher education institutions provide, and the information they publish about their academic standards and quality.
In 2002-03 we developed and began a new programme of institutional audit in England, and developed the enhancement-led approach to quality assurance in Scotland. We also ran programmes of developmental engagements in England and Wales designed to help higher education institutions improve the management of the quality of their teaching and learning support. We reviewed higher education provided in English further education colleges.
We assessed, on behalf of the government, applications from institutions wanting powers to award their own degrees or to use the title 'university'. And we submitted new draft criteria for the award of university title and degree awarding powers in England.
Communicate
We are a major provider of public information about standards and quality in UK higher education for a national and international audience.
We continued to publish the reports of our reviews, and to make these reports and other publications available, free, via our web site, which contains one of the most extensive bodies of information about standards and quality in higher education in the world. There were over a million visits to the site in 2002-03.
We were active in discussing aspects of quality and standards with thousands of students, teachers and managers in higher education in the UK and overseas, and with public policy makers.
Enhance
We help institutions carry out their responsibilities for quality of provision and academic standards by feeding back information on good practice, strengthening our liaison with them, providing forums for discussion, and keeping them up to date on events elsewhere in the UK and internationally.
In 2002-03 we implemented the Academic Infrastructure across higher education in the UK. We also provided opportunities to evaluate the effectiveness of our work, including the Infrastructure, through analysis of feedback from a series of events and round table meetings.
We started a systematic analysis of the findings of our reviews, the results of which will be disseminated in a series of good practice publications in 2004.
Promote
We are committed to maintaining the high reputation for standards and quality of UK higher education at home and around the world.
We continued a programme of audits of partnerships overseas, and took a leading role in international quality assurance activities. We received increasing numbers - 35 groups - of overseas visitors at Southgate House.
We continued to promote understanding of UK higher education among the decision-makers who influence the future of global higher education.
UK context
Within the UK, the devolved national higher education systems have moved in different directions and at different speeds, reflecting local strategies and needs, and the requirements of the relevant devolved authorities. But, whatever their differences, all have a common, core interest in the security of the students' learning experience and the academic standards of higher education awards and qualifications.
We responded to these new demands by developing structures and processes to meet the devolved context in Northern Ireland, Scotland and Wales.
Safeguard
The responsibility for higher education standards belongs to universities and colleges themselves. We ask them how their standards are established and monitored, and how they know that students achieve the expected levels of performance in their programmes of study.
The 24 institutional audits that we undertook in England during 2002-03 showed that, in general, broad confidence can be placed in the soundness of institutional management of quality and standards in these institutions. The audit reports identified a wide range of good practice and confirmed that institutions are taking seriously the requirement to produce public information about quality and standards, in line with the specifications published by HEFCE. We hope this pattern will continue. If it does, the progressive lightening of external scrutiny of higher education will be justified.
Two areas which might be singled out for comment are collaborative provision and assessment. The greater risks inherent in the offering of programmes or UK awards at 'arm's-length' need careful management. Particular care needs to be taken when the links are with overseas associates, because the task is more complex and the stakes are higher. The continuing reputation of the UK's higher education system can be put in jeopardy very quickly by a high profile scandal involving a careless institution.
One of the implications of the greater explicitness that the Academic Infrastructure is bringing to higher education is the need for a clearer and more 'transparent' approach to assessment. What is being measured by assessment? What techniques are being used? How are validity and reliability being ensured? Are assessment instruments fit for their purpose? These questions are increasingly being asked, not least by students.
In Scotland, we worked with Universities Scotland, the Scottish Higher Education Funding Council and student representative bodies, to develop enhancement-led institutional review, which was implemented in autumn 2003.
The extensive programme of reviews of directly-funded higher education in English further education colleges demonstrated a strong commitment to quality and standards, and particularly an emphasis on supporting students. There has also been a move, among some further education colleges, to adopt a more comprehensive approach towards assuring quality and standards. This will be an important step in safeguarding standards by ensuring that processes are embedded within institutions, rather than relying on external scrutiny.
Because foundation degrees are higher education awards, assured by higher education institutions but generally delivered by further education colleges, we had to develop new working relations for quality assurance. Our review work in England and Northern Ireland contributed to the development of the award, and demonstrated that foundation degrees have encouraged innovation and new opportunities for students - although there is scope for developing further the partnership arrangements with employers.
Our work for the Department of Health (DH) in England opened up new areas for us. We worked in partnership with the DH, the Nursing and Midwifery Council, the Health Professions Council and the Workforce Development Confederations on the development of a method of review of NHS-funded higher education healthcare programmes. This method not only provides assurance for the academic quality of programmes, but also addresses the concerns of the professional bodies in ensuring that students are appropriately trained and professionally competent.
We have a direct and defined responsibility for safeguarding standards for the 40,000 students attending Access to HE programmes. We carried out eight visits to authorised validating agencies which deliver Access programmes. We also started a review project for the DfES, looking at the potential for wider development of the Access scheme, so that more students can take advantage of this route into higher education.
In 2002-03 we continued the restructuring of the Agency. Two different sets of working practices had grown up around programme review and institutional review. Business and operational plans have been implemented to establish a single Reviews Group to match the balance of activities which we anticipate for the years ahead.
In recognition of the changed structures and approaches across the UK, the Agency's committee in Scotland was given a range of delegated powers by the Board and re-named QAA Scotland.
Following a job evaluation exercise we agreed a new pay and grading structure for staff which will be put into place during 2003-04.
We were recognised as an Investor in People in July 2003.
Communicate
We prepare and publish several hundreds of reports, following reviews, every year. We also publish a range of handbooks and guidance associated with our work.
Our web site gives access to all our published reports, as well as a range of other publications, working papers and consultations. We also provided dedicated areas on web sites for reviewers, or for groups working on projects such as benchmarking and the further development of our Code of practice for the assurance of academic quality and standards in higher education (the Code).
We worked with the media to support all of our activities. It is reassuring for taxpayers to know that the quality and standards of higher education are reviewed, and that the reports of the reviews are available. Press reports of our reviews, although not always balanced, conveyed this basic message. In 2002-03 we contributed to more specialist debates on degree awarding powers and the definition of 'university', on the impact of the internationalisation of higher education, and to the general discussion about quality and value for money in the higher education sector.
Students are an important audience for us. We produced a series of publications aimed specifically at students and intending students, to provide accessible information about issues relating to quality and standards. These included an 'Understanding...' series on the frameworks for higher education qualifications, benchmark statements and programme specifications, and progress files.
As students have been offered a greater role in our review processes, we published guidance to help them make the best of the opportunity. Leaflets were produced for students involved in institutional audit and developmental engagements. We helped the NUS to provide training for students involved in the audit of their institutions, and continued to receive valuable contributions through regular meetings of the Student Forum.
We produced new publications to reflect the changes in higher education. Our A brief guide to quality assurance in UK higher education, originally intended for an overseas readership, proved very popular in the UK as well. A revised version was printed and distributed.
We established a liaison scheme for those subscribing institutions that wish to have an initial, single point of contact with us to discuss matters relating to quality and standards. Such dialogue proved popular and provided an informal but authoritative exchange of information and views.
As a designated body, we adopted the principle that in the conduct of our business in Wales we will treat the English and Welsh languages on the basis of equality. Our Welsh Language Scheme, which sets out how we will give effect to that principle when providing services to the general public and to its major clientele in Wales, received the approval of the Welsh Language Board on 3 July 2003.
Enhance
We contribute to a range of work linked to the wider continuous improvement agendas within UK higher education, through an extensive range of discussion, consultation and liaison activities.
In 2002-03 we organised, made presentations at, or attended numerous seminars and conferences, drawing on and disseminating the intelligence obtained from our main review and audit activities. We defined our key stakeholder's needs more precisely, and managed our relations with them more proactively, including the development of strategic partnerships where this appeared to be the best way of providing a more effective and efficient service.
In addition, the preparation of self-evaluation documents by institutions and subject teams, and the involvement of students in the production of written submissions for reviews, generated a significant amount of development activity within institutions. Many institutions took the opportunity offered by developmental engagements to test their internal review and evaluation procedures with us. Much has been learnt from this activity.
In Scotland we were pleased to participate fully in the development of the new enhancement-led framework for quality, and in implementing, with the sector, the new Enhancement Themes. We worked to support and enhance the progression of learners through the Scottish Advisory Committee on Credit and Access and our partners on the Scottish Credit and Qualifications Framework, and through our joint working group with Universities Scotland on Personal Development and Planning.
Academic Infrastructure
One of our key contributions to enhancement has been the maintenance and improvement of the Academic Infrastructure, and its related elements. These provide the reference points for describing academic standards, and have critical roles in supporting internal quality cultures within institutions and for external review.
A Steering Group for Benchmarking was established and met for the first time in June 2003. The Group was set up to advise us on procedures and processes for the recognition of further subject benchmarks at the honours level. A draft scheme was circulated for consultation in late 2003. The Group will also be considering how we should evaluate, review and revise existing statements.
We considered possible revisions to the section of the Code on external examining, and began to review the section on collaborative provision and the Guidelines on the Quality Assurance of Distance Learning. We were also advised by another panel drawn from the sector on the development of guidelines on accreditation of prior learning (APL). In each case the work was informed by discussion meetings jointly sponsored with UUK and SCOP. We anticipate that all three areas will lead to consultations in 2004.
We organised, jointly with UUK and SCOP, an extensive series of meetings to discuss the development of draft revisions to sections of the Code, development of guidelines on APL, programme specifications and higher education progress files. The meetings were frequently oversubscribed, and delegates expressed a very high level of interest and satisfaction.
Promote
We promote, and are called upon to promote, a wide variety of aspects of UK higher education relating to standards and quality, both within the UK and internationally.
Our audiences within the UK included the various communities that constitute higher education, and a wide variety of stakeholder groups, including governments, learned societies and professional, statutory and regulatory bodies. Similar groups from outside the UK consulted us, with an increasing emphasis on requests from ministries, agencies and related intergovernmental organisations.
We worked closely with government, the funding councils and representative bodies, to promote the new approach to quality assurance, built upon an effective combination of internal quality assurance within institutions, supported by the provision of regularly updated Teaching Quality Information, cyclical external audit and review.
We helped to promote quality and standards in the development of the foundation degree in England, by publishing a draft qualification benchmark which summarises expectations about what should be offered by such programmes and expected of their successful students.
We worked closely with the Qualifications and Curriculum Authority to promote better understanding of the relationship between higher education and other qualifications, and of the range of potential routes into higher education.
Higher education has always been international; in recent years it has become an increasingly competitive market place. We have taken an important role in promoting UK higher education by explaining the rigour and transparency of the processes that lead to our published reports and judgements.
Within a European context, UK higher education, through our work, has developed perhaps the most complete and accessible system for describing academic standards and monitoring quality assurance.
We were among the first to recognise the potential importance of European developments on UK higher education. We have monitored these developments and promoted relevant UK perspectives to ensure that European developments are compatible with the characteristics of a diverse UK higher education system and, in particular, its approach to quality assurance. We reported back on, and sought to influence, the emerging criteria that will characterise the initiatives leading to these goals.
We have been enthusiastic contributors to the European Network of Quality Assurance in Higher Education (ENQA) as a forum for discussion and to promote the UK approach of review and audit based on shared reference points. The Chief Executive is a key member of ENQA.
We were a part of the coordinating group of the Transnational European Evaluation Project. This group looked at the development of a peer review process using common methods and criteria in evaluating and reporting publicly on quality assurance within European higher education. We organised peer-led evaluations of history in Aberdeen, Bologna, Coimbra, Grenoble and Riga.
We have contributed to the work of the Joint Quality Initiative (JQI) which has representatives from more than a dozen European countries. The JQI has developed the 'Dublin descriptors' that outline some shared views of achievements and expectations associated with the award of bachelors and masters degrees in Europe.
The Chief Executive and the Assistant Director with responsibility for international matters have contributed, on behalf of UK higher education, to conferences, publications, the International Network for Quality Assurance Agencies in Higher Education and UNESCO.
Financial review
Summarised accounts
The 2002-03 Directors' Report and Financial Statements were approved by the Board and the company's members at the Annual General Meeting held on 15 January 2004. The Directors' Report and Financial Statements were submitted to both the Registrar of Companies and the Charity Commission following the AGM.
The summarised accounts contained in this report are extracted from the financial statements prepared by the Agency and given an unqualified audit opinion by Mazars, the Agency's external auditors.
The summarised accounts may not contain sufficient information to allow for a full understanding of the financial affairs of the Agency. For further information the Directors' Report, the full financial statements and the auditors' report on those financial statements should be consulted. Copies can be obtained from the Director of Administration at the Agency.
Statement of external auditors
The summarised accounts contained within the report are consistent with the full financial statements produced by the Agency for the year ended 31 July 2003 and on which we have given an unqualified opinion dated 14 November 2003.
Mazars
Chartered Accountants, Registered Auditors
Statement of financial activities for the year ended 31 July 2003
| 2003 | 2002 | ||
| £ | £ | ||
| Incoming resources | |||
| Activities in furtherance of the charity's objects | |||
| Contracts to support review activity | 5,269,372 | 6,051,675 | |
| Contracts to support development and enhancement | 247,725 | 97,454 | |
| Income from applications for university title and degree awarding powers | 66,227 | 72,000 | |
| Subscriptions | 2,294,083 | 3,334,440 | |
| Other related income | 26,806 | 31,680 | |
| Investment income - bank interest receivable | 221,750 | 166,774 | |
| Other income | 12,000 | 10,200 | |
| Total incoming resources | 8,137,963 | 9,764,223 | |
 |
|||
| Resources expended Charitable expenditure | |||
| Costs of activities in furtherance of the charity's objects | |||
| Review activity | 5,269,858 | 5,679,413 | |
| Development and enhancement | 1,170,261 | 835,555 | |
| Access, university title and degree awarding powers | 335,364 | 325,250 | |
| Support costs | 1,599,034 | 1,565,594 | |
| Management & administration | 170,242 | 161,678 | |
| Total resources expended | 8,544,759 | 8,567,490 | |
|
|||
| Net (expenditure)/income | (406,796) | 1,196,733 | |
| Fund balances brought forward | 3,363,399 | 2,166,666 | |
| Fund balances carried forward | 2,956,603 | 3,363,399 | |
|
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Breakdown of income for 2002-03 by source
Breakdown of expenditure in 2002-03 by category
Balance sheet as at 31 July 2003
| 2003 | 2002 | |
| £ | £ | |
| Fixed assets | ||
| Tangible assets | 413,062 | 499,460 |
| Current assets | ||
| Debtors | 320,802 | 234,621 |
| Cash at bank and in hand | 4,800,129 | 3,923,759 |
| 5,120,931 | 4,158,380 | |
| Creditors - amounts falling due within one year | (2,377,390) | (1,094,441) |
| Net current assets | 2,743,541 | 3,063,939 |
| Total assets less current liabilities | 3,156,603 | 3,563,399 |
| Provisions for liabilities and charges | (200,000) | (200,000) |
| Net assets | 2,956,603 | 3,363,399 |
|
||
| Represented by: Unrestricted funds as at 31 July 2003 | 2,956,603 | 3,363,399 |
|
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Reserves policy
The Agency's reserves policy, which was updated in November 2002, sets the target level of reserves equal to four to six months' fixed costs: at current levels of expenditure this sets the target level at £1.98 - £2.97million. The Agency holds reserves for three main reasons:
- to secure its long-term position;
- to deliver the medium-term objectives in the Business Plan by ensuring that reserve levels provide a cushion against medium-term business risks, and take full account of the costs of medium-term objectives; and
- to ensure that it can carry out the programme of work detailed in the next year's annual operating plan - for example, to ensure it could survive in the short-term should agreements with key funders fail to be reached by the start of the financial year.
The policy allows the directors to meet their obligations under the Companies Acts and to comply with Charity Commission guidance.
Analysis of staff costs
The number of employees whose emoluments as defined for taxation purposes amounted to over £50,000 were:
| 2003 | 2002 | |
| Number | Number | |
| £90,000 - £99,999 | 1 | 1 |
| £60,000 - £69,999 | 3 | 0 |
| £50,000 - £59,999 | 4 | 4 |
There were no emoluments paid to the directors during the year.
16 directors were reimbursed expenses to the value of £15,526 (2002: 15 directors, £17,828) during the year. The expenses paid related solely to travel and incidentals.
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