University Finance – we must take an interest and be vigilant

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2014 Higher Education Service Group Conference
8 November 2013

Conference in the light of the Browne Review of Higher Education finance and the Comprehensive Spending Review it was reported that HEIs will have to be very quick on its feet to avoid serious financial problems and potential bankruptcy as the cuts take effect and the impact of higher fees become apparent.

Conference every year the Funding Council provides an overview to HEFCE on the financial health of the higher education sector in England. The report provides universities and higher education colleges with feedback on their financial performance and also provides other stakeholders with information about the current financial health of the sector. The key points in the report demonstrate accountability for the public funds distributed to universities and the accountability returns enable HEFCE to reassess HEIs’ overall risk assessments and to ensure that HEIs are meeting their accountability responsibilities.

Conference according to the report on the financial health of the higher education sector: 2012-13 to 2015-16 the overall financial results for the sector in 2011-12 showed a sound position overall with the sector forecasting continued surpluses, healthy liquidity and reserve levels, although cash balances are forecast to reduce.

Conference the report highlights that the key risk facing the sector’s future financial sustainability continues to relate to the uncertainty of future home and EU recruitment. It also shows that at an aggregate level the sector expects full-time home and EU undergraduate student numbers to be 3.1% lower by 2015-16, compared with 2011-12.

Conference in the book entitled The Great University Gamble: Money, Markets and the Future of Higher Education by Andrew McGettigan it analysed the various impacts of the Coalition government’s vision for the higher education sector. The findings highlighted why higher education reforms don’t add up lays out the basics of the system we have for student finance – prominent of which has been the most complete removal of direct government funding for institutions through block grants, and its replacement with higher tuition fees paid for by the individual student.

Andrew McGettigan’s book also explore the role of “marketisation” as the overriding logic behind the Coalition’s reforms, and how they have been designed to make it easier for new provider to enter the higher education sector, including those operating on a for-profit basis. Part three of the book examines how difference forms of privatisation have influenced higher education institutions in recent years, not only in terms of funding but also with regard to their corporate structures which increasingly resemble those of private companies and how this has reduced the potential for universities to remain publically accountable.

Other themes are the secretive and shadowy mechanisms which have been used by the Coalition to implement is higher education reform agenda, which have minimised the opportunities for proper democratic accountability.

Conference the changes which have been made to higher education by the Coalition since it came to power in 2010 produce a complex story which McGettigan tells with remarkable skill and attention to detail.

Conference we must all be concerned with our university finances. We must all take an interest to understand how we would know if something was wrong.

McGettigan addresses the challenges that HEIs face as a result of these changes and also of the challenges that they pose for trade unionists. Among the latter he highlighted the need for vigilance in the way universities manage their finances. He highlighted some universities borrowing money in very risky ways through bond markets.

These are complex issues and branches are ill-equipped to meet them.

Conference therefore instructs the Higher Education Service Group Executive to:

1)Assist branches and regions in the work of exercising the necessary vigilance by providing written and web-based guides.

2)Encourage regions to set up training courses which train branch officers in understanding the relevant aspects of university financing and what action is available to them to influence university policy in this area.

3)Find examples of good practice among union branches in this area and disseminate this among members.

4)If possible provide any expertise available in the union nationally to assist branches in addressing these challenges.