Posted tagged ‘cutbacks’

Managing university budgets: thinking strategically

July 21, 2011

Although it is not absolutely a true picture, I have a feeling that in my entire academic career one constant feature has been ‘the cuts’. I started as a lecturer in Trinity College Dublin in 1980, and for those old and decrepit enough to remember that period in Ireland, it was a time of non-stop economic woes and recurring public spending reductions. By 1982 the situation had got so bad that the then short-lived government led by Charles Haughey had to break its own agreement with the public service unions and abandon pay increases, and there were more budget cuts. By around 1986 the situation had become so dire that the College actually set up something it called the ‘Cuts Committee’, whose task it was to find more savings.

In 1991 I joined the University of Hull in England as Professor of Law, and shortly afterwards as a Dean. For those who can remember that particular period, it was the time of annual 1 per cent British government ‘efficiency gains’, this being an automatic mechanism for reducing higher education funding. Every so often there were larger cuts, and I remember receiving a circular from the Vice-Chancellor just before Christmas one year trying to get us to address the question how we could manage the budget reductions without redundancies.

Just as things began to look up a little towards the end of the 1990s, I moved to Dublin, Dublin City University and the high-octane exuberance of the ‘Celtic Tiger’. Or so I thought. In 2002 the then Minister for Education decided that higher education was over-funded, and from then on we had real-term budget reductions, pretty much year-on-year, until in 2008 the roof fell in and we were faced with a dramatic change in our circumstances.

Now I am in Scotland, where actually things are probably better than anywhere else in the near neighbourhood, but we are still looking at a likelihood of at least some further cuts.

Other academics may of course remember the years differently, and in fairness I moved around in such a way that I often arrived in a system just as it was going from good times to bad (or at least not so good) times – though in other ways I have over recent years been lucky to be in universities that were and are smart in difficult economic circumstances. But for those who also think that ‘the cuts’ have followed them around, it is a terrible de-motivating experience, producing a degree of lethargy and fatalism and eroding a capacity for innovation. Furthermore, on the whole universities don’t cut strategically; they cut opportunistically (i.e. exploiting staff departures and the like), and where they cannot do that they simply apply cuts across the board. Doing so is, however, inherently anti-strategic, depending as it does on a mixture of chance and common misery.

It becomes particularly counter-productive when it involves exhortations to re-use paper clips and print on both sides of paper. In fact, and demonstrating that this is an international phenomenon, the newspaper USA Today recently ran an article on ‘cutbacks outside the box’, describing steps such as smaller food portions in canteens, removing phone lines and abandoning printing.

Of course, university expenditure has to be properly controlled, and appropriate efficiencies are quite proper. But that in itself is not a budget strategy. Neither are cuts, by themselves. A budget strategy needs to connect with an overall strategic purpose, which includes a decision on what to prioritise and resource, and including decisions on growth for those priorities. It should also include plans for the diversification of revenues. Budget strategies should not react to decreases in public expenditure but should anticipate them and prepare for them.

It is unlikely that universities will ever again be able to expect public expenditure largesse. That era, if it existed, has probably passed. Even if the resources were once again available, they would probably be much more directed to government priorities rather than to general increases in funds. This means that higher education must lose the ‘cuts mentality’, and become financially strategic. And that requires a change in mindset. It won’t be all easy.

The cuts, the cuts – cleaning up

September 29, 2009

So what’s in store for us next? Well, a report in Times Higher Education tells us that staff in Sheffield University are now having to clean their offices themselves; or rather, the normal cleaning service now happens only every two to three weeks. The whole issue was made public by the British academics’ trade union, the University and College Union. The actual circular was also published by Sheffield University on its website. It appears that the university is seeking to make savings on cleaning services and is encouraging staff to assist in various ways, including emptying their own bins.

The UCU general secretary, Sally Hunt, was apparently outraged:

‘The health and safety of staff is paramount and I am utterly amazed that the university is prepared to cut back on cleaning when it is under swine flu alert.’

I can’t help feeling the reference to swine fly is somewhat irrelevant in this context. Nevertheless, there is a serious issue in there somewhere, and it is clear that as all universities in this part of the world now face serious cuts in public funding there will be more cutbacks in services as institutions struggle to make ends meet. In Ireland this will be made worse by the attempt on the part of the government to stop all recruitment to non-academic posts, including the filling of vacant posts. Given a normal turnover of around 10 per cent per annum in such posts it would not take long before crises arise. The apparent view that you can protect ‘frontline’ educational provision by stopping non-academic appointments is very questionable.

But on the other hand, we are part of a country in crisis, and we must expect to share some of the burden. What we don’t at this point know is how much of this the sector can take without running into serious operational problems with longer term implications. In the early 1990s the then British government introduced a series of annual ‘efficiency gains’, which were if I recall in fact an annual reduction in recurrent grants of 1 per cent. Back then there were serious debates about how far this could be taken, and at which point efficiencies would turn into more serious structural damage.

But this debate needs to be an intelligent one. Claiming that a request to staff to assist in routine tidying endangers health and safety may not be the most sensible way to address this. Equally, pretending that neglecting maintenance and repairs can be a longer term solution to funding problems is also dangerous.

Universities cannot be run on the cheap. But they do always have some potential opportunities to conduct their business more efficiently. Getting that balance right at a time of crisis is vital, so that we can be confident that when economic conditions improve we will not be found to have been damaged beyond repair.