Details for the SAC funded sector
This page contains details of how performance-linked funding for SAC-funded Tertiary Education Providers will work. This includes:
Weightings
The Government values different outcomes at different levels of education – for example, progression to higher levels of learning is more important at foundation levels. The Educational Performance Indicators are weighted differently for the different grouped qualification levels, as set out in the table below.
Table 1: weightings at grouped qualification levels
Grouped
Qualification
Levels | Indicator 1
Qualification
Completion | Indicator 2
Course
Completion | Indicator 3
Retention
(Completion
Continuation) | Indicator 4
Progression | Total Weight |
| Level 1-2 | 35% | 45% | 0% | 20% | 100% |
| Level 3-4 | 45% | 55% | 0% | 0% | 100% |
| Level 5-6 | 35% | 45% | 20% | 0% | 100% |
| Level 7-8 | 35% | 45% | 20% | 0% | 100% |
A weighting of 0% means that the Educational Performance Indicator does not affect the performance score for this grouping of levels.
Performance scores
The weighted performance of each SAC-funded Tertiary Education Provider at each grouped qualification level is combined into a score out of ten. The table below shows how a provider which has a 50% qualification completion rate, a 60% course completion rate, an 80% retention rate and a 53% progression rate would score at level 1-2.
Table 2: calculating performance scores
| Performance Score Level 1-2 | Calculation of score for level 1-2 |
| 5.5 | = ((50% x 0.35) + (60% x 0.45) + (80% x 0) + (53% x 0.2)) x 10 |
Thresholds for measuring 2011 performance
Thresholds scores against which 2011 performance will be measured, have been calculated from 2009 performance information from the April SDR as at 1 September 2010.
- Upper threshold: set at the 50th percentile based on the 2009 performance scores for all TEOs within a given level. If a TEO's performance score is at, or above, the upper threshold score, the provider will retain 100% of its funding at that grouped qualification level.
- Lower threshold: set at the tenth percentile score based on the 2009 performance scores for all TEOs within a given level. If a provider’s performance score is at, or below, the lower threshold score, it will lose 5% of their funding at that grouped qualification level.
- Sliding scale: if a TEO's performance score lies between the upper and lower threshold scores, they will lose between 0 and 5% of their funding on a sliding scale at that grouped qualification level. The closer a TEO’s score is to the upper threshold score, the more funding it will retain.
Table 3: thresholds scores for 2011 performance
Grouped
Qualification
Levels | Upper
threshold | Lower
threshold |
| Level 1-2 | 5.3 | 3.8 |
| Level 3-4 | 6.7 | 4.1 |
| Level 5-6 | 6.6 | 3.9 |
| Level 7-8 | 7.7 | 5.0 |
A TEO's score at each grouped qualification level, compared with the thresholds, determines its proportion of funding at each grouped qualification level. Using the earlier example, if a provider were to achieve a score of 5.5 for the grouped level 1-2 in 2011, it would retain 100% of its funding for this group in 2012.
The proportion of overall funding that a TEO will retain depends on the amount and type of education the provider delivers at a grouped qualification level. For example, a TEO could perform poorly at a grouped qualification level at which they deliver little provision, and very well at another grouped qualification level at which they deliver most of their provision. As a result, the TEO will retain most of the overall funding it has at risk.
Each TEO can access a performance-linked funding calculator from their workspace, and will be able to work out the impact of performance-linked funding on their own funding.
Thresholds for measuring 2012 performance
The Minister for Tertiary Education, Skills and Employment has decided to increase the threshold levels for measuring 2012 performance, which will impact on 2013 funding.
Thresholds scores against which 2012 performance will be measured, have been calculated from published 2010 performance information.
Table 4: thresholds scores for measuring 2012 performance
Grouped
Qualification
Levels | Upper
threshold | Lower
threshold |
| Level 1-2 | 5.9 | 4.2 |
| Level 3-4 | 7.5 | 5.5 |
| Level 5-6 | 7.4 | 4.8 |
| Level 7-8 | 8.0 | 5.9 |
Part time study
The Government wants to ensure that TEOs continue to provide access to tertiary education for people who are studying part-time. As people who study full-time tend to do better than those studying part-time, Indicator 1 will be adjusted to reward TEOs for qualification completions, according to the amount of part-time provision taking place. The adjustment is made by working out the percentage of part-time provision taking place at each grouped qualification level, and applying this percentage to an extra 50% of the qualification completions rate, which is then added onto the weighted performance score.
Table 5: part time study
Performance Score
Level 1-2 | % part-time provision
at level 1-2 | Calculation of score for level 1-2 with part- time adjustment |
| 5.9 | 42% | 5.9 = ((50% x 0.35) + (42% x 50% x 50% x 0.35) + (60% x 0.45) + (80% x 0) + (53% x 0.2)) x 10 |
Sector feedback
The TEC sought feedback towards the end of 2010 on two issues: how the impact of performance-linked funding on payments might be managed, and options for measuring the qualification completion rate. Feedback was sought through the following two discussion documents.
Qualification and programme completion rates
Feedback was received from 25 organisations, including peak bodies, on options for measuring the qualifications completion rate.
Option C: measuring the qualification and programme completion rates on a three year weighted rolling average was the preferred option by 48% of respondents. A further 20% of respondents preferred Option A: continue to measure qualification and programme completion rates from the previous year’s performance, and 12% favoured Option B: measure qualification and programme completion rates on a three year rolling average (not weighted). 20% of respondents did not state a preferred option.
The TEC Board of Commissioners confirmed on 25 January 2011 that SAC qualification completion rates and ITO programme completion rates will be measured on a three year weighted rolling average for use in performance-linked funding (Option C). However, in consideration of the feedback received, a phased approach has been agreed: a zero weighting will be applied to the 2009 performance data, a 25% weighting on 2010 and a 75% weighting on 2011 data; which means that the full impact of the three year weighted rolling average would not take effect until 2013. From 2013 a 20% weighting will be applied to the 2010 performance data, 30% weighting on 2011 and 50% weighting on 2012 data.
Managing payments
19 responses on options for adjusting payments were received from individual providers and representative organisations.
The majority of sector feedback supported Option 3, a single payment adjustment in December.
The TEC has decided to manage adjustments to payments for performance linked funding, if applicable, by adjusting the December payment. The same method of adjusting payments will be applied across the sector.
This means that providers will receive 100% of their funding, pro-rated across monthly payments, from January to November. Any adjustment for performance linked funding will be made in the final payment for the year.
Timeframes
It is expected that providers will be advised of the impact of performance linked funding on their 2012 funding in September this year.
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Last changed:
8 February 2012