A billion blown? efficiencies in UK Higher Education
A worrying amount of British universities are out of money. Redundancies are sweeping the sector. Some institutions may topple over soon. Mergers are being talked up. This isn’t just the war on woke guys, this stuff is actually happening!
The new Labour government, as yet, has ‘no plans’ to address this mounting crisis with either increased domestic fees or some other fresh injection of cash. Perhaps a poor Clearing period or two and an imminent market exit will force their hand, but we shall see. Labour’s major commitment thus far appears to be re-milking the international student cash-cow, fresh in the hope that after the Conservatives decided to stick two fingers up to an export #GlobalBritain was really rather good at, that market hasn’t gone sour. Warm words are good to see, but the crisis feels more acute.
A week and a bit in situ, Minister of State Jacqui Smith has talked about ‘working with Vice Chancellors’ to find ‘efficiencies’ as part of Labour’s response. Before I basically agree, I think we need to be precise here. UCU mishandled the last round of strikes by banging on about a sector “swimming with cash.” Thanks to the market free-for-all engendered by the removal of the student numbers caps by George Osborne, some institutions doubtless are, but others are genuinely in financial turmoil. We do need a case-by-case approach to the immediate stabilisation measures therefore. As every externally bought management training workshop will tell you — hell, probably including some of the below types — there’s no ‘one size fits all solution’ to institutions plugged into local economies in different ways.
As part of the general rebuild however we should look at wasteful spend, and here there are some sector wide trends where central government can give a steer.
The first is a bit paradoxical. Although the crucial bits — frontline teaching, and even more importantly those heroes of admin staff weaving students through a byzantine system most academics don’t understand— are under constant threat of redundancy, elements of the university sector are staggeringly bloated, and show no signs of slimming down.
The number of managers and senior non-academic professionals (read: those employed in areas like quality assurance, student support, or marketing) employed by British universities increased by about 60% between 2005 and 2018. By 2018 there were 51,000 such figures, or approaching an average of 450 an institution.
No doubt the impact of Covid, universities backfilling services like mental health which the state has retreated from, and the expansion of various pedagogy improving institutes has sent that figure well north of 500 in the years since. Many of these are doing useful work, some not. Even at the less obviously useful end, all are doing their jobs according to the parameters and incentives central government has laid out.
Either way, it would be good to have a handle as to how many threatened redundancies will fall in this general area rather than perhaps more student facing (hell, call it customer facing if you want) areas of provision. As a matter of urgency, the new government should review how many of the recently expanded functions of universities are providing genuine additionality. Universities should also be forced to outline where previous rounds of redundancies have fallen — let’s at least have some proper data.
The Conservatives could have owned this territory — but instead they went down a Jordan Peterson anti-DEI Youtube wormhole (that stuff is an absolutely miniscule percentage, if any at all, of the total) rather than bother with boring details. Rachel Reeves’ Office for Value for Money could be all over this.
But if we’ve got all these middle managers then at least they are always covering the hiring process, right? Nope, it’s often outsourced! In recent years, Cambridge University has chucked an annual £3m, Bristol almost £7.5m, and Manchester approaching a whopping £20m at procuring external recruitment agencies to find staff. To be fair some institutions seem to take a far leaner approach (#bestpractice), but I’d wager we’re looking at waste north of £75m across the board. Seriously, just ban this. Put no doubt talented middle managers to work on this rather than policing academics as to whether the Graduate Cohort LinkedIn Connection rate has risen by the university strategy’s desired inflation busting 2.7%. Anyway, Executive Deans looking for a job can use jobs.ac.uk like the rest of us.
Procurement is a theme more generally. You know the new digital systems that only half work, you didn’t ask for, and how it was much easier when bosses could just sign stuff off or students be trusted to use a normal reading list? Well, apart from getting rid of that world leading to poorer research skills for the average 18 year old, they also ain’t cheap. Going off individual spend on it, VLE software like Canvas costs a figure somewhere near £20m nationally. On payroll and expenses, Business World seems to cost each university close to £200,000 a year — again more than £20m being blown across the sector therefore. There’s doubtless another couple of #vital packages I’m forgetting, but I’d be confident the total IT orange that could be squeezed is again well above £50m. Getting 100+ different places to independently buy this stuff at the very least doesn’t feel great value for money. Let’s look at sector wide commissioning, and sharing procurement as other areas like local government have taken on board.
Cooperation may be the way forward more generally. I’ve blogged elsewhere that the Research Excellence Framework constitutes a near £70m annual drain on university resource (and, not to say, time, patience, and staff goodwill). Slim it massively down — I’d be happy with a formula based system. Of course Wonkhe love it because the thinkspace love anything that can be turned into a conversation about process. It’s mean to pick on a single example — and partly emerges from me not being bothered to log in to the Times Higher Ed site. But Big Best Practice has a lot to answer for. Anything where the case for its adding value seems quite tenuous probably isn’t.
The pressure to compete leads to wider wastage. The data is poor, but what snapshots we have suggest universities are spending between 2% and 5% of student fee income on marketing and general student recruitment. At a total of £27bn of tuition fee income, that’s £540m being spent even on the low estimate. Again, can a cap be looked at here? It’s a mostly zero sum game.
There’s obviously other such examples: I’m just tapping away on a half baked Medium blog. Executive salaries and expenses. Using the post-£9k fee increase good times to splurge on buildings and thereby rack up debt. Consultancies offering #bestpractice solutions. I also couldn’t get a handle on away days, retreats, and Strategic Summer Solticises — though in financially tough times what are they about? Can the sector maybe not give the Radisson Blu conference room £3,000 a pop right now?
There’s a potential bonus here. George Osborne used to talk about expansionary fiscal contraction — reduced spending from government leading to the private sector filling the gap, and the economy therefore growing. Big flaw here: this economic theory doesn’t appear to often work (certainly not in the post-2010 UK). But the university sector might offer a partial endorsement. Stop spending money on unnecessary stuff, free the frontline to innovate and breathe, and some goodwill may return. Given the state of things right now, that may be an increasingly valuable commodity. It might contribute to reducing the £200–300m bill universities across the country are paying out on bullying and harassment cases.
The title is a tad facetious, but add the previous together and you get, give or take, a billion quid to look at. As I say, I’m missing loads of areas. To be clear, savings wouldn’t fall evenly across the board, you can’t claw every pound back, and individual cases would need addressing. But if I were Labour these are the kind of measures I’d be looking at including in any rescue package. Cooperation may offer quite a lot, and, for those with an interest here, forestall some clunky and difficult mergers.
