Branch briefing on university finances and the crisis in UK HE: a Neoliberal Disaster

The announcement of £35m of cuts at Newcastle University will have come as a shock to many colleagues and the impact of the cuts is starting to sink in. We do know that finances across the sector are difficult. The employers’ organisation UUK commissioned Price Waterhouse Coopers to undertake a report on the financial health of UK universities in November 2023.

https://www.hepi.ac.uk/2024/01/13/at-amber-the-financial-position-of-uk-universities/

This diagnosed an ‘amber’ alert over a funding model that would not work in the medium-term. The value of UG domestic tuition fees have been eaten away by inflation, research is conducted at cost so the only source surpluses that could keep university finances in the black is international student fees. The PWC report suggested a market-driven recipe for the whole sector of maintaining capital spend, pay and pension restraint and cross-subsidisation from international students. So that is what universities have all been doing. Poor advice. Staff at most universities have been paying the price with uncertainty, course closures and redundancies.

The PWC document became a green light for redundancies, severance schemes and course closures across the sector in the short window before the election. This is despite home student demographics actually moving in a positive direction until 2030.  After a post-Covid surge, the collapse in the international student market has exposed the entire PWC strategy as flawed.

To compound the problem, UUK have doubled down with its more-of-the-same blueprint for HE announced at the beginning of the week written by a collection of VCs, policy wonks, Willetts and Mandelson.

https://wonkhe.com/blogs/a-bluffers-guide-to-the-universities-uk-blueprint-for-he-policy-under-labour/

Previously, from 2011, domestic UG recruitment cross-subsidized the massive expansion of UK university infrastructure. Given the massive graduate debts and the student mental health crisis, that approach is clearly now unsustainable and morally bankrupt. We need students to be our allies in the construction of a new funding model of HE as an indispensable public good, transforming lives and regional economies and giving hope.

What do members think?

Many thanks to members for attending the branch meeting on Monday. The considerable attendance at short notice underlines the strength of the branch as we attempt to challenge the threat that cuts of this depth with have on us. The strength of feeling was that any sacrifices needed to start at the top. The last Annual Report for 2022-2023 revealed that there were 212 staff earning over £100k. What is that now? We know that there have been several senior appointments and new posts, with an additional two deputy directors of finance. The total staff cost of our VC was £404k (including pension) in 2022-2023. That salary is set by the remuneration committee of Council. What is that figure now? The finances of the university that year included a capital spend of £48m, a £31.2m windfall credit from the changes to USS, cash balances of £218m ‘a strong basis for future capital investment’, and total income of £608m entailing a 9% growth. Given our strong historic position, what are our reserves now?

The branch meeting allowed us to establish a negotiating position with the management. Here is the sense of the branch meeting.

• Strong opposition existed to compulsory redundancies. HR have not ruled this out.
• There was a lot of anxiety and solidarity with those on precarious contracts (PGR teachers, Hourly paid Associates, Internally-funded Fixed Term Contracts, NUAcT fellows, those promised bridging arrangements). Cuts here damage the most poorly paid.
• There was a strong feeling that there should be fairness to sacrifice, especially with sacrifices from those in Senior Management Team. Cuts at the top are the only ones that will not impact students and research.
• Members were concerned about the equality impact of the changes to travel, promotion, progression and on the ability to pass probation and the pay gaps. Such freezes can damage early careers dramatically. And damage our reputation.
• There was the belief that staff should decide in what is ‘business-critical’; job security, students careers, being more important than capital spend.
• There was the concern that the cuts would have a serious impact on workload.
• Members wanted the commitment that emergency measures were temporary and reversed at a specified point.
• Like the events around the student encampment, this whole situation speaks to the need for greater staff input into university governance.

We expect management to take staff views seriously and that the union will do its utmost to defend the interests of all its members.

What will the branch do next?

• We will be asking the university to open the books to justify their cuts. The Director of Finance was emailed for a meeting last Friday. We have been offered a meeting on 16 October.
• We have reached out to other campus unions, to the students’ union, to Senate and Council, and to other branches for a concerted campaign at Newcastle University and beyond.
• Please attend your section meeting: invite a member of the branch committee into your section for a meeting if one is not scheduled. Contact ucu.office@ncl.ac.uk to help organise one.
• Consider becoming a rep. We will be having regular reps’ meetings to build the campaign.
• Attend the branch meetings. Have your say in how we respond. Details to follow.
• Recruit a friend to the union. Put up posters. Get a UCU woolly hat.
• If we pull together we can push back against the cuts as other have branches at Aberdeen, Northumbria, Kent, Sheffield Hallam and others.