I know this thread is fairly old, but, my D's is in year 12. The school use three data sets to work them out.
The first is based on what you got in your GCSE for that subject and how many pupils went on to get a particular grade. So, if you got a 7 in maths, they look at how many people who got 7s went on to get an AStar, an A, a B and so on.
The second one is what level they've been working at in assessments throughout the year.
The third is their mock exam results.
The school say the grades should be achievable and aspirational. And that schools and colleges are ranked by UCAS for their accuracy.
Also, with regards to the points thing above, higher tariff courses don't seem to do that any more. My D's is interested in a course that specifies an A in maths as a minimum, and points don't count. (My son is taking another qualification alongside the A levels that confers UCAS points, but they will not take them into account: if they did, he'd have enough 'points' with significantly lower A level grades than is required, so it's all about the grades and subjects for the courses D's is looking at).