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The University of Edinburgh Resource Allocation Model.

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Presentation on theme: "The University of Edinburgh Resource Allocation Model."— Presentation transcript:

1 The University of Edinburgh Resource Allocation Model

2 The Role of RAM The Resource Allocation Model is a tool to inform, and be informed by, strategic and operational decisions RAM

3 Principles of RAM Income is attributed where earned Allocations based on strategic drivers/goals Recognition that support occurs at many levels of the organisation across Colleges and Support Groups

4 Principles of RAM An efficiency mechanism has been built in to the model in order to encourage efficiency gains & strategic decision making without negatively impacting on effectiveness and responsiveness Forecasted Income will be used with a validation factor of +/- 3% accuracy to encourage forecasting accuracy over time Where practical and appropriate, RAM drivers will be reflected in TAG

5 Principles of RAM Income Attribution Commer cial ResearchTeaching CHSS CSECMVMISGCSGUSG Allocation Income Attribution MINUS Surplus Contribution Restricted attributed income Universal Activity University Services Unit Specific Services Strategic Fund Contribution Surplus College/SG Budget Strategic Allocation in Planning Round SG Budget College/SG Budget SG Budget CHSS Allocated Budget CSE Allocated Budget CMVM Allocated Budget ISG Allocated Budget CSG Allocated Budget USG Allocated Budget Produces Allocated Budgets

6 Principles of RAM Universal Activity Activity that has no logical driver Largely not related to size and shape of organisation Examples include GaSP, Court, Compliance functions University Services Services provided across the University Drivers are largely similar across all areas, although services may be tailored to meet varying needs Example includes Student Recruitment & Admissions Unit Specific Services Services unique to specific units Drivers are understood Example includes 24 hour security

7 Surplus General Reserve Fund General Reserve Fund Annual Surplus Contribution In-year Savings Capital Expenditure Budget Draw-down Includes Local Reserves Managed Assets Annual Deposits Cumulative ReservesAnnual Withdrawals

8 Estates Investment Budget Capital Expenditure Budget Restricted attributed income Strategic Fund Contribution Building Program Estates Investment Budget

9 Proposed RAM Process It is expected that RAM will be iterative Pre-planning Iteration One Based on previous year’s RAM Planning Iteration Two Based on PSG Guidance Allocation Iteration Three Agreed allocations post-planning Discussion and negotiation during planning round

10 Service Expectations Monitoring Cycle Service expectations should be set prior to Resource Allocation It is expected that they remain high level Service Expectation Statements These should be monitored throughout the period Service requirements should be reviewed regularly in consultation with service providers This falls outside the scope of the RAM project

11 Assumptions Made Cost and allocation drivers will be used to encourage efficient use of space, staff and resources Efficiency targets will be set at appropriate levels to maintain responsiveness to changes in need and environment Using efficiency targets can be used to smooth the transition process and encourage better understanding of true cost of service / activity requirements “Monopoly Money” has been used in the model (i.e. the figures in the model are a fiction)

12 Prototype Overview

13 Strategic Summary Sheet

14 Strategic Decisions

15 Contribution to Surplus

16 Contribution to Strategic Fund

17 Strategic Decisions

18 Gross Income Attribution

19 Unrestricted Income Attribution

20 Restricted Income Attribution

21 SG & Corporate Budgets

22 Support Group Indirect Cost Contributions Support Group Budgets Unit Specific Services Cost Drivers Forecast Data Contribution Rates SG Budget Line Contribution Rates (Universal Activity & University Services) SG Budget Line Contribution Rates (Universal Activity & University Services) Forecast Data Contribution Calculations

23 Support Group Contribution Rates

24

25 Support Group Budget Lines

26

27 Budget Allocation

28 RAM Tabs Tab NameDescription Strategic SummaryHigh level summary of income attributions, contributions and allocations School SummarySchool level version of strategic summary Unrestricted Inc- Teaching Main SFC Teaching Grant (UG and PGT, includes additional income for expensive strategically important subjects), New Medical School SFC grant, Education Contracts and Other Fees Unrestricted Inc- Fees Tuition Fees (by 14 categories of students) Unrestricted Inc- Research SFC PGR Grant, Research Excellence Grant (REG), Research Grants and Contracts Overheads Unrestricted Inc- Other SFC Knowledge Transfer Grant (KTG), Minor SFC Grants (Disabled Students Premium), SFC Grant: Museums and Galleries, Other general income (gifted profits, subsidiary service charges etc), Other Unrestricted Income from Colleges and SGs, Deferred Capital Grants and SFC-funded Refurbishment Spend, Deferred capital grants and grant-funded refurbishment spend (non- SFC), Release of Merger Goodwill, Unrestricted General Endowment and Investment Income Restricted IncFunding Council Grants (Restricted), Tuition Fees and Education Contracts (Restricted), Research Grants and Contracts, Other Restricted Income, Restricted Endowment and Investment Income

29 RAM Tabs Tab NameDescription Support Contrib'n Rates Contribution rates by Support Group University Service Category Contrib'n Calcs- Services University Service contribution calculations by Support Group Contrib'n Calcs- Universal Universal Activity contribution calculations by Support Group Unit-specific Services Identified unit-specific services by Support Group and Service Category Cost driversIdentified Cost Drivers: Weighted Assignable Space, Staff FTE (unweighted), Student FTE (unweighted), Weighted Staff/Student FTE, Shared Load, Research Grants Spend SG Budget LinesBudget Line Allocations for Support Groups and Corporate Costs Contrib'n Calcs- Indirect Indirect Costs Contribution Calculations by Support Group

30 Next Steps Collect feedback from Board, workshop groups and other key groups February & March Assess feedback for inclusion into modelFebruary & March Planning process developmentFebruary to September Test data assumptions for materiality, “fit” and expected behavioural consequences April & May Test simplicity and transparency of working modelApril & May Iterative reviewsApril, May, June Scenario TestingJuly, August, September Run in parallel with existing planningOctober, November, December

31 Feedback Does the model reflect the outcomes you envisaged? The Support Group budgets in the model are built up by changes to service requirements of internal customers. Does that meet your expectations? Provision will need to be made for pre-negotiation of these changes.

32 Thank you Do you have any immediate questions?


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