Financial control

As the turmoil in the global economy continues, so do the financial problems affecting universities. In fact, if you do an internet search with the words ‘financial problems universities‘, you get a roll call of institutions all over the world right now facing significant crises. Though just to remind ourselves that some things don’t change, one of the items that come up relates to the financial crisis faced by Italian universities in the Renaissance. And indeed I have previously mentioned the concerns expressed earlier this year about the financial health of some UK universities.

None of this is getting better, and as the financial problems mount some new messages are coming through. A British Conservative-aligned think tank, Policy Exchange, has argued that universities unable to manage their finances ‘should be allowed to go bankrupt’, and that a higher education ‘no-fail culture’ might not be acceptable any longer. In the meantime the Irish Minister for Education and Science, Mr Batt O’Keeffe TD, has suggested that there might still be over-spending in universities that could be remedied by new cost-cutting measures – instancing the reported success of Cork Institute of Technology in cutting its costs by EUR 2m.

Also mixed into this cocktail of financial distress and ‘tough love’  is the prospect of greater external control. If universities are finding the going rough financially right now, some observers are concluding that this is because their finances are not well managed. This for some is also the subliminal message of the Minister’s ‘forensic audit’ of universities and colleges.

As I have said previously, I believe that universities must work constructively with the government, or with whomever is entrusted with the task of monitoring university finances by the government; and they must be willing to be open and transparent about financial matters and value for money. But in return we must be clear that central bureaucratic control over university financial management, even when carried out in a well-meaning framework, runs counter to the need to have vibrant, innovative universities that are able to take initiatives and assess risks. Making the institutions dependent on declining hand-outs managed by officials is not the way forward. Equally, subjecting them to something that Policy Exchange calls ‘market forces’ is equally unhelpful, as there is hardly any real element of ‘market’ in the forces that are currently afflicting university finances.

We must be fully aware of the financial hazards currently facing the higher education sector, and the solution to these problems must lie in a spirit of collaboration and joint action between the institutions and government.

Explore posts in the same categories: economy, higher education, politics, university

4 Comments on “Financial control”

  1. Vincent Says:

    On the face of it all you say seems reasonable that is until you realise that there is not a county town without some institute of higher learning. And all with the bells and whistles, pegged to the civil service.
    Now, I know that living from home is a financial ideal for most students, but really this is ridiculous. While at the same time there is the situation as in Galway two huge facilities are clogging up the accommodation. Huge that is relative to the size of the town. And how many different bodies are there around Dublin, all with their own management teams. Why on earth are they not amalgamated within the bigish four. While annoying as it may be to drive down to Carlow to deliver some contact hours there is hardly the requirement for overnight expenses.
    There is also the lack of any real inflation within the Education industry to be kept in mind, well not since the Endowments of the big Universities in the States hit a bit of a problem. Ditto with the Oxbridge and anyplace else with an ancient landholding.

  2. Jilly Says:

    It’s a perfect closed system, isn’t it? Starve universities of funding for well over a decade, and then when their finances begin to totter on the brink of outright disaster, step in and say that they obviously can’t manage their money so you’ll run it for them.

    Certain activities cost money. For example, you can get a very fine 3-course meal in a Dublin restaurant for 120 euro per head, a good one for 80 euro per head, and a tolerable one for 50 euro per head. Any budget below 40 euro per head starts to get tricky, and I defy anyone to find a 3-course meal in Dublin for less than 20 euro, outside of McDonalds’. And that’s the question really: does Ireland want a university system which is the educational equivalent of McDonalds’?

  3. Kelly Says:

    One of the things that has baffled me most, as an academic newcomer to Ireland, has been the system whereby government funding is distibuted on the basis of ‘matched funding’ for ‘collaborative’ projects between institutions.

    In my (limited) experience, it seems that the government expects universities to have millions lying around at their disposal in ‘matched’ funds (I guess in practice this means academics’ time, which seems to already be stretched beyond the official agreed working conditions) and it means that academics are put into collaborative projects not necessarily of their own design. Being asked to work with someone you might not know very well in another institution on a project you didn’t develop is quite challenging.

    Surely core funding could be distributed in such a way that enabled organic, bottom-up collaborations to develop around genuinely shared interests and ideas. There is no reason why such a funding mechanism can not be accountable and transparent, and it might lead to greater success. Rationalization in the sector can’t be forced through unwanted mergers: part of the debate in the UK about ‘failed’ universities is about the failure of mis-managed mergers.

  4. Susan Says:

    I agree that the language is very worrying. “Forensic” has connotations of criminality in most people’s minds and hence is a ridiculuous adjective to apply to audit. Of course, the frustration is exacerbated by the fact that the lack of ‘forensic audi’ by government of its own financial policies and its own waiving of regulation in such affairs is in large part to blame for the national economic crisis that we are now all facing. There should be a bit more honesty about the basic facts. They and the commercial/financial sector messed up the economy and now need to apply cutbacks across the board. It’s as simple as that, trying to create the impression of lazy academics on bloated salaries and wasteful attitudes is an attempt at distraction and its about time there was sufficeint leadership and responsibility in the system to say so and then work on a collaborative way forward. The minister’s insinuations are not helpful.

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