As we move towards 2016, a key challenge within the higher education sector continues to be the uncertainty around income and funding.
At a time when government contributions are low, many universities look to international students to generate additional income. With the threat of an EU referendum and potentially stricter policies on such students, there is a great deal of uncertainty not just regarding international students, but for the future of research funding and mature and part-time student support.
Likewise, as university fees have risen to an average of £9,000 per year, providing value for money and ensuring student satisfaction are more essential than ever. With this in mind, many universities are seeking to re-evaluate the services and support they offer. This will involve significant investment in IT facilities, upgraded or newly built learning facilities and improved halls of residence, in addition to ensuring increased teaching quality and student satisfaction.
With this combination of ongoing income uncertainty and increasing pressure to deliver a higher standard of service, universities need to carefully evaluate their business models. Certainly, rigorous monitoring of financial expenditure will be even more critical than it already is, in addition to introducing commercial ideas and ensuring maximum efficiency in all areas, from procurement policy to leaner practices.
An example of this is Glyndŵr University in Wrexham, where I have been working this year as interim vice-chancellor. The university has faced financial problems in recent years, in addition to undergoing a significant operational and academic restructure. With this in mind, it recognised that transformation was essential, in order to stay sustainable.
Its goal? To introduce more efficient operational structures, establish balance sheet stability and create a surplus by the end of the current financial year.
To achieve this, the first thing to be done was to ensure that effective financial management and control processes were in place and that financial reporting was robust and regular. Without this, budget holders couldn’t be expected to accept responsibility and accountability for budget management.
At the same time, it is not always clear in a complex organisation such as a university just where losses are occurring. This may sound simple and obvious, but identifying just where the money is haemorrhaging is often tricky yet crucial to achieving a long-term sustainable solution.
Cultural trends can have a bearing on the speed at which universities can and will embrace change. As we all know, universities function within complicated decision-making processes. The advantage of the interim is that he or she usually has a mandate for rapid change and decision-making, which can help to create momentum. The interim is also usually a highly experienced person who has seen it all before. At Glyndŵr, I had the benefit of an interim assistant vice-chancellor, finance director and HR director, all of whom were able to draw on extensive experience to support the change that was needed.
Given the challenges being faced within higher education, it is perhaps not surprising that interims are being called on to initiate and support change much more frequently than in the past. Interims with commercial awareness from outside higher education are also in demand. Those from local government and the health service in particular have been found to have the right mixture of cost-consciousness and commercial awareness, together with an understanding of what it means to work for an organisation delivering a broad societal benefit.
In my view, it is crucial that universities remain focused on learning, teaching and research and their contributions to societal and cultural life and the broader communities they serve, rather than being solely commercial. That said, the commercial reality simply cannot be ignored.
Graham Upton is interim vice-chancellor of Glyndŵr University, a position secured by Odgers Interim. He previously steered the University of Cumbria out of an estimated £30 million deficit.
