Attachment D
EXPLANATORY STATEMENT
Guidelines issued under subsection 238‑10 of the Higher Education Support Act 2003
Amendment No. 8 to the Commonwealth Grant Scheme Guidelines No.1
Issued by the authority of the Minister for Tertiary Education
Subject:‑ Higher Education Support Act 2003
Amendment No. 8 to the Commonwealth Grant Scheme Guidelines No.1
Authority
Section 238‑10 of the Higher Education Support Act 2003 (the Act) provides that the Minister may make guidelines for the purposes of the Act. In particular, item 2 of the table at section 238‑10 specifies that the Minister may make the Commonwealth Grant Scheme Guidelines to give effect to matters set out in Part 2‑2 and section 93‑10 of the Act.
Purpose and operation
The Commonwealth Grant Scheme Guidelines No.1 commenced on 13 December 2006 and are being amended for the eighth time.
The purpose of this amendment is to insert an additional chapter in the Commonwealth Grant Scheme Guidelines. This Chapter will be Chapter 12 on the Performance Funding Grant Amount - Facilitation Funding. The introduction of Performance Funding was announced by the Government in its 2009 policy document, Transforming Australia’s Higher Education System in response to a recommendation contained in the Bradley Review of Australian Higher Education.
Explanation of amendments
Item 1 – Insert Chapter 12 on Facilitation Funding after Chapter 11.
CHAPTER 12 PERFORMANCE FUNDING GRANT AMOUNT – FACILITATION FUNDING
12.1.1 outlines the purpose of the chapter, that is, to describe the methodology for calculating the Facilitation Funding component of the Performance Funding Grant Amount.
12.5.1 sets out the eligibility criteria for Facilitation Funding. A higher education provider is eligible for Facilitation Funding in a year if the provider:
- is a Table A provider;
- has received an allocation of Commonwealth Supported Places for that year from the Minister under section 30‑10 of the Act; and
- has entered into a Mission‑based Compact for 2011‑13 (a Compact).
Compacts are three year bi‑lateral agreements between the Commonwealth and providers that show how each provider’s mission contributes to the Government’s goals for higher education, and include details of major higher education and research funding and performance targets.
12.5.5 further requires that in order to be eligible for Facilitation Funding a provider must inform the Commonwealth of strategies and goals for achieving the provider’s teaching and learning mission (clause 4.7 of the Compact) and agree to performance targets contained in clause 4.14 of the Compact.
12.10 sets out the two components of the Facilitation Funding amount: the ‘Basic Grant Amount component’ and the ‘Grants to Support National Institutes specified in the Other Grants Guidelines component’.
The amount of the ‘Basic Grant Amount component’ each provider will receive in a year is based on their share of the total Basic Grant amount in that year as at 1 January of that year, as specified in section 33‑5 of the Act.
The amount of the ‘Grants to Support National Institutes specified in the Other Grants Guidelines component’ each provider will receive in a year is based on their share of the total Grants to Support National Institutes specified in the Other Grants Guidelines amount as at 1 January of that year, as specified in the Other Grants Guidelines of that year.
12.10.5 sets out the formulas for calculating provider shares of the Basic Grant Amount component and the Grants to Support National Institutes specified in the Other Grants Guidelines component of Facilitation Funding.
Commencement
Amendment No.8 to the Guidelines will take effect on the day after the day on which it is registered on the Federal Register of Legislative Instruments.
Consultation
In Transforming Australia’s Higher Education System the Government announced it would be introducing Performance Funding in response to a recommendation contained in the Bradley Review of Australian Higher Education.
In 2009, the Government established an expert group drawn from the higher education sector, the Indicator Development Group, to assist in the development of a framework of indicators that could be used to negotiate targets with providers for the purposes of Performance Funding for teaching and learning. Building on advice from the Indicator Development Group, the Government released a Discussion Paper, An Indicator Framework for Higher Education Performance Funding in late 2009, to elicit the views of providers and other stakeholders. Feedback from 61 responses to the draft indicator framework was used to inform the development of draft Performance Funding Guidelines for agreeing performance targets with providers. The Government released the draft guidelines in October 2010 for consultation. The Department also held face‑to‑face information sessions in early November 2010. The Government received 44 written responses to the draft guidelines. This feedback, along with the Minister’s decisions, informed the finalisation of the Performance Funding Guidelines.
Overview
The Higher Education Support Act 2003 was enacted to establish a framework for the provision of financial assistance for students and institutions involved in higher education. The Act aims to ensure the efficient and effective allocation of Commonwealth funds to support higher education, with a focus on improving access and outcomes for students. The eighth amendment to the Commonwealth Grant Scheme Guidelines, introduced under the authority of the Minister for Tertiary Education, seeks to address the need for performance-based funding within the higher education sector. This amendment, which introduces Chapter 12 on Performance Funding Grant Amount – Facilitation Funding, aligns with the government's policy objective to enhance the quality and relevance of higher education through targeted funding mechanisms. The guidelines are designed to provide a methodology for calculating Facilitation Funding, ensuring that institutions are rewarded based on their contribution to the national higher education goals as outlined in their Mission-based Compacts.
Scope and Application
The Higher Education Support Act 2003, as amended, provides the legislative framework for the Commonwealth Grant Scheme, which includes guidelines that govern the allocation of funds to higher education providers in Australia. Under Section 238-10 of the Act, the Minister for Tertiary Education is empowered to issue guidelines to facilitate the administration of the Commonwealth Grant Scheme, which encompasses various grants and funding arrangements aimed at supporting the higher education sector. The Act applies to eligible higher education providers, which are entities that meet specific criteria, such as being a Table A provider, having received an allocation of Commonwealth Supported Places, and having entered into a Mission-based Compact with the Commonwealth. This funding mechanism is designed to support institutions in delivering educational services to students and achieving specified performance targets. The geographic reach of the Act is national, applying across all states and territories of Australia. While the Act provides a broad framework, the specifics of funding allocations and performance criteria are detailed in subordinate instruments such as the Commonwealth Grant Scheme Guidelines. These guidelines, which are subject to amendments and updates, detail the eligibility criteria, funding formulas, and performance metrics that providers must meet to qualify for Facilitation Funding. The latest amendment, Amendment No. 8 to the Commonwealth Grant Scheme Guidelines No.1, introduces a new chapter on Facilitation Funding, which is part of the Performance Funding Grant Amount. This amendment aims to further refine the methodology for calculating Facilitation Funding, ensuring that it aligns with the government’s goals for higher education and reflects the educational missions of the providers. The amendment process involved extensive consultation with the higher education sector and stakeholders to ensure that the guidelines are practical and effective in supporting the sector's objectives.
Key Provisions
The Higher Education Support Act 2003 (the Act) allows the Minister to make guidelines for the purposes of the Act (section 238-10). The Minister has made Amendment No. 8 to the Commonwealth Grant Scheme Guidelines No.1, inserting an additional chapter, Chapter 12, which outlines the methodology for calculating the Facilitation Funding component of the Performance Funding Grant Amount (12.1.1). The eligibility criteria for Facilitation Funding are specified in 12.5.1, requiring a higher education provider to be a Table A provider, have received an allocation of Commonwealth Supported Places for that year, and have entered into a Mission-based Compact for 2011-13. Furthermore, the provider must inform the Commonwealth of strategies and goals for achieving their teaching and learning mission and agree to performance targets as outlined in clauses 4.7 and 4.14 of the Compact (12.5.5). The Facilitation Funding amount consists of two components: the 'Basic Grant Amount component' and the 'Grants to Support National Institutes specified in the Other Grants Guidelines component' (12.10). The amount of each component is based on the provider’s share of the total Basic Grant amount and Grants to Support National Institutes specified in the Other Grants Guidelines amount, respectively (12.10.5).
The Amendment imposes specific obligations on higher education providers, including the need to be eligible for Facilitation Funding by being a Table A provider, having received an allocation of Commonwealth Supported Places, and entering into a Mission-based Compact. Providers must also inform the Commonwealth of their strategies and goals for achieving their teaching and learning mission and agree to performance targets. The Amendment further requires the calculation of the Facilitation Funding amount based on the provider’s share of the total Basic Grant amount and Grants to Support National Institutes specified in the Other Grants Guidelines amount. The Amendment outlines the methodology for these calculations in Chapter 12 of the Commonwealth Grant Scheme Guidelines No.1.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Amendment for breach of the provisions. However, failure to comply with the eligibility criteria and obligations set out in the Amendment may result in the provider not receiving Facilitation Funding. The Amendment does not specify any maximum penalties for non-compliance, but non-compliance may have financial implications for the provider in terms of the funding they receive.