Hard hats time

Over the coming few days I’ll be picking out some of the highlights of and reflecting on the UCISA CISG Conference held at St Andrews last week. We had an interesting opening session from Derek Watson, the Quaestor and Factor of the University of St. Andrews. His focus was the current financial gloom and doom and he began by outlining some of the reasons behind the crash and current economic climate. The estimated figure for the total worldwide financial loss is $2.8trillion – a staggering figure and put into context by highlighting that the combined value of Microsoft and Oracle is a small fraction of this figure. Disturbingly the amount of loss that has been identified so far is around 30% of that figure. So with over 60% still to be identified, it goes without saying that lean times are going to be with us for some time. And with higher education way down the political parties’ priorities, government funding for the sector is likely to be impacted much more than other sectors.

The temptation is always to look for a one size fits all solution for the sector but different institutions have different missions and consequently the proportion of income from the various different sources also differs. That income is under pressure – investment funding is harder to get, income from endowment is falling and there is greater international competition, particularly now the US universities are looking more at expanding beyond their shores. Against this, costs are increasing – the pensions deficit is growing, energy costs are volatile. But the sector needs to maintain quality if it is to maintain its reputation and the income from international students.

So institutions need to find a way of cutting costs whilst also growing the business if the sector is to ride out the current economic difficulties. There will have to be a shorter payback time on investments; IT directors will have to demonstrate how new systems will pay for themselves within three or so years. There is a need to question all services and hence expenditure. What can you stop doing without any serious impact? Are there alternative, cheaper, ways of delivering the same service? Which services can you improve? This questioning role should not be restricted to those in management – Watson believed that collective action is needed to get institutions through. So all should be considering change, reviewing what they do and whether it can be done more effectively. Some hard decisions will need to be taken; but without some pain, it is unlikely that institutions will secure the investment they need to move on.

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