Financial update: responses to Q&A questions

Can you provide more details on areas being targeted for redundancies, how many there will be and the timing?

Staff salaries are by far the biggest cost to the University, and making savings in our overall staff costs would contribute to reaching our agreed budgetary target for this and future academic years.

One proposal is to consider a voluntary redundancy scheme in targeted areas. Discussions are beginning on this and on which areas that could include, and nothing has been decided yet. An update on this will follow in the next few weeks, and we will communicate any decisions as soon as they are made. Whilst compulsory redundancies cannot be ruled out, we will work with staff representatives to mitigate the need for these where possible.

We understand that colleagues want to know more about this and that the lack of answers at this time may be worrying. However, since consultations with the UCU and Staff Forum are beginning, we are being as transparent as we can be as this progresses.

Can you provide more clarity on the pay award deferral?

Part of the New JNCHES national pay process allows Universities to defer the nationally-agreed pay award for up to 11 months where there are extenuating circumstances. The potential deferral is part of our current discussion with the UCU and Staff Forum. The maximum deferral of 11 months would deliver the biggest saving of around £5m. Given the financial position of the wider HE sector we are unlikely to be the only University considering this.

A decision will be made in the next few weeks following consultation with UCU and the Staff Forum. If deferred, the pay award will not be backdated.

This does not affect annual incremental pay increases, so all colleagues who are eligible to move up a spinal point in our pay scale in 2024/25 will do as normal. This allows pay progression to continue where applicable for colleagues.

Why were our student recruitment targets so ambitious?

Our targets were based on market data and forecasts and appeared ambitious but realistic at the time they were set. Any income growth they generated would have reduced the need for cost savings.

The scale of behaviour changes by applicants and high-tariff universities, combined with international student recruitment challenges, were unexpected and had a big impact, and undid a lot of positive recruitment work by colleagues across the University. It ultimately left us unable to get as close as expected to these targets.

How are we approaching future student recruitment?

We are being realistic about our future recruitment cycles. We are assuming the same challenges seen unexpectedly this year will continue, and so are expecting our home undergraduate numbers to remain similar. We remain confident it will be possible to increase international student numbers, with the new UK government sounding more supportive on this topic, but are expecting slower growth than originally planned.

We generally maintained our entry grade tariffs this year, and do not plan to lower them as we do not want to compromise our academic standards which would have a long-term impact on our reputation.

We are offering Sociology degrees from 2025/26 and continue to monitor market trends to take advantage of applicant interest through targeted investment to enable growth. Doing this will maintain us as an attractive option for students in the long-term.

How are we working with government and other universities and partners to improve the situation for universities?

We hosted the recent Universities UK Conference on campus, which brought together university Vice-Chancellors from across the country to discuss a number of matters, including sector challenges. We continue to play an active role in raising these issues as a collective, with UUK this week publishing a 'blueprint' report making clear the important role universities play and calling for funding changes to address financial pressures facing the sector.

We are also continuing to be directly engaged with UK and local government ourselves, with the Vice-Chancellor in regular contact with our local MPs and councillors, and the Department for Education, to bring our needs to their attention.

How will the Directorates deliver savings?

The Professional Services Directorates were introduced to reduce complexity, streamline operations and increase collaboration. The new structure only formally came into effect this academic year, and the Directors are working together to identify how they can work better and more efficiently, with the aim of meeting a shared savings target of £3m this year, which is built into their budgets, and addressing additional challenges that arise. We expect to see steps being put in place to achieve this in the current academic year and beyond.

Why are we continuing to make senior appointments and allow academic promotions while controlling recruitment and potentially deferring the pay award?

Changes we make to improve our long-term financial performance must all be made in a sustainable way. This will take time and will not be possible without some investment and appointments as we put in place improved infrastructure and processes and adapt to changing demands and challenges.

Restructuring Professional Services into Directorates required the appointment of Directors to deliver the improvements and savings this model makes possible (see 'How will the Directorates deliver savings?'). All of these roles were filled internally, with one subsequently replaced through external recruitment. The Function lead vacancies this left have also predominantly been filled internally by realigning existing roles, in many cases with no additional headcount. The Directors ultimately have the responsibility to deliver their £3m joint savings target in 2024/25.

Associate Pro-Vice-Chancellor roles were also recently created to support crucial work addressing workloads and progressing our international ambitions, which is intended to generate significant additional income and improve our financial sustainability. The change was in name only for existing roles, with the additional ones all part time positions and all were filled internally.

Academic promotions processes are among a range of rewards processes that have returned this year after being paused for the last academic year. Processes such as academic promotions and accelerated pay progression are important ways we can reward excellence and support career progression for talented colleagues, which helps us to maintain our high standards of teaching and research and our reputation.

Scrutiny of recruitment requests remains, but there was never a complete ‘recruitment freeze’ as we recognise some recruitment will always be required for our continued operation.

Are we looking to use existing assets or other revenue streams beyond student recruitment to help address our deficit?

Our investments and strong balance sheet do put us in a relatively fortunate position, and some assets may be used to contribute to our budget target. However, these assets can only be used once, are in many cases ringfenced for certain uses, and do nothing to address our operational deficit. We must not use up our investment assets by continuing to run at a loss long term.

Our revenue streams from Thames Valley Science Park and tenants on campus will continue to be valuable, as will additional income due to be generated from the planned ECMWF headquarters site.

What other savings measures are being looked at beyond staff salary costs?

More efficient processes and improved structures and operations are necessary for financial sustainability in the long term. Discussions are continuing to develop ideas, and where relevant, proposals will again be consulted on with the UCU and Staff Forum. Investment assets will be looked at as an option to address our shortfall in the more immediate term.

How are workload concerns being addressed, particularly with the prospect of more colleagues leaving through redundancy?

A number of ongoing projects seek to tackle this concern. These include a project focusing on academic workloads specifically. More details to follow on this.

In Professional Services, Heads of Directorates are meeting regularly to explore ways to achieve their aims to reduce complexity and improve efficiency, which will benefit staff workloads.

Can we make the data and analysis, and the conversations with unions, that are being used to make decisions on savings visible to staff?

As we did during consultations around the University’s response to the Covid-19 pandemic, we intend to agree with UCU and the Staff Forum to issue regular joint communications as things develop. We will therefore share details as and when we can through this process.

What are the responsibilities of line managers on staff wellbeing?

Line managers are responsible for supporting the wellbeing of their staff. We know time is limited and appreciate managers are doing what they can, but it is important to emphasise that colleagues can expect to find support if they need it.

Line managers should themselves be supported by their line managers, with regular communication and guidance issued to our Leadership Forum group to be cascaded down.

Central support includes our wellbeing resources, and colleagues can be directed to these for specialist help.

Can we justify spending decisions, such as the new farm purchase, Centenary projects, Portfolio Review, introduction of semesters, running our Malaysia campus and the use of agencies and contractors, given our deficit?

Money from the sale of investment assets was used for the recent purchase of land at Tanner's Farm, Farley. Thie means we effectively swapped one type of investment asset for another, which has not had an effect on our deficit. Currently we are not farming the land and it has been leased back to the previous owner for a short time whilst we plan for its future.

Costs associated with marking our Centenary in 2026 are funded by endowments, which are ringfenced funds. Other funding allocated to this will help extend our history and legacy as a University, which benefits us reputationally and supports our Strategy aims. Centenary plans are still being formed and costs will of course be an important consideration in light of our financial position.

Portfolio Review changes and our new semester model have only just been implemented and will help us better respond to student needs for years to come, as well as having the potential to help reduce operating costs.

Our new framework for making our Malaysia campus, and other international campuses, more financially sustainable and driving international student recruitment is building on previous work in this area.

External consultant costs are sometimes necessary as part of normal work to remain competitive and provide a positive staff and student campus experience. Internal skills and expertise are used as a priority, but there are times when spending on agencies or consultants helps deliver much-needed projects in the required timescale. Our Procurement team support colleagues in always seeking to obtain the best value for money.

Is the resource we put into environmental sustainability paying off?

The effort we have put into environmental sustainability over a number of years has shown its value, not least in recent days when we were named Sustainable University of the Year and leapt up the Times and Sunday Times Good University Guide rankings, largely as a result of that accolade. This followed us topping the People and Planet university league table, and carving out a reputation as a local and national leader on climate education.

This reputation is important for marking us out among competitor universities in the UK and internationally, boosting our student recruitment prospects. Audience analysis shows that environmental sustainability is a defining issue for students, with 2023 data from the Student Room showing that nearly half of applicants considering it as an important factor in their choice of university.

Do we need to review our mantra of being a 'research intensive' university, or look at factors such as halls accommodation prices, to improve our student recruitment?

Being a research intensive university is important for recruitment of international students; our position in the top 200 of the QS World Rankings and the Times Higher Rankings places us in a category where we are attractive to international students and in some cases their ability to get funding to study here is dependent on that. Both rankings have a significant research quality component. Moving away from being research intensive would also mean taking on an entirely different shape and likely losing a large number of staff for whom research is a key part of their identity. Crucially, universities that are not research intensive are not doing any better financially than research-intensive universities; if anything, some of them are doing much worse.

There is no evidence are halls prices are putting students off, with halls occupancy not falling below 99% in the last five years. Rent increases are linked to inflation, but we place a cap on increases to mitigate price spikes. Other accommodation providers have imposed far bigger price increases than ours in recent years, and one local provider recently reduced its prices to match ours.