"Strategies to Deliver"
As promised in my third bulletin of earlier this month I now attach the
draft document "Strategies to Deliver". This provides details of how
we intend to implement the Strategic Futures agenda included with
bulletin number three.
"Strategies to Deliver" is being discussed with senior colleagues
across the University and will also be considered by the Employment
and Finance Committee of the Board of Governors at its next meeting on
21st May 2002.
Some of the detailed issues arising from "Strategies to
Deliver" require further discussion with groups and individuals
during the next few weeks and appropriate meetings are being planned.
The plan helps us to move forward quickly and with minimum
disruption. Whilst no structure is perfect, and, in any case, people
matter more than structures, I believe that this paper offers an
important first step towards a different future. In particular, it
is important to explain that the "academic clusters" are simple ways of
beginning to loosen the boundaries between schools. The existing wide range of
excellent cross-school developments need to continue - in and between
clusters.
Thanks for your co-operation.
Christine
Professor Christine E King
Vice Chancellor and Chief Executive
Strategic Futures - First Draft for Board of Governors' meeting on 20th March 2002
1. THE NATIONAL CONTEXT
University Finance
Universities face financial problems. Even some of the most prestigious pre-1992 universities are operating deficit budgets. A number of post-1992 universities are in so-called ‘special measures’ with Hefce because of their budget deficits. Ministers are unwilling to continue to offer financial support to such ‘failing’ institutions, especially since they are under pressure to increase funding to the more ‘prestigious’ end of the market. As a consequence, Hefce has ended its commitment to support universities in financial difficulties. A number of financially driven mergers are in progress (e.g. Bradford, London Metropolitan and Manchester) and universities are introducing redundancies and the closure of some academic areas, particularly in Engineering, Sciences and Modern Languages.
Student Finance
The introduction of tuition fees and the removal of the maintenance grant have impacted on student recruitment, particularly amongst poorer students and on student success because of the need to take on extensive paid work whilst studying. There is clear research evidence to support this, for example, in the recent National Audit Office report on Widening Participation and Student Attainment Recruitment and results are being affected.
Expansion of Student Numbers
Government has a target of 50% participation by 18-30 year olds in HE by 2010. Measures introduced to support this expansion have so far resulted in a redistribution of numbers away from modern pre 92 universities towards older post 92 universities. Government ministers have made clear that their inclination is to change the social composition of ‘old’ universities for reasons of social re-engineering. The result has been a recruitment crisis for many modern universities as potential students take up targeted lower entry offers from older universities which the media and government represent as ‘top’. This year the MASN control mechanism which limits growth has been removed by Hefce. We can therefore expect to see an expansion in student numbers in many of the pre 92 universities at the cost of universities like ours. We enter a period of deregulation.
National Research Priorities: The Research Assessment Exercise
Money allocated to support research has always been available to pre-92 universities. Post 92 universities have only recently been invited to compete for funds in so-called Research Assessment Exercise. At first, given the lack of research infrastructure or previous funding, post 92 universities made a slow entry into the game. This year the results from modern universities are so improved that the reward of these researchers would put at risk some of the leading research departments in the research-led universities. Since the government has prioritized the support of world-class research, the distribution of funds has been concentrated on the top scoring well-established departments. The impact will destabilize research funding for many other universities, modern and old. We already know, for example, that the five universities most affected by reductions in their research grant are Cranfield, Hull, Bradford, Queen Mary College in the University of London and Keele. The loss of research funds will, almost certainly, drive universities in this group more actively into the conventional territory of universities like Staffordshire. This university has, in the latest round, made dramatic improvements in research performance but will receive even less funds as a result.
Scenarios for the Future
Long-term trends in society, the impact of Information Technology, ambitious government policies and changing patterns of learning are already having an impact on universities. It is clear that learning is becoming more informal and the increased take-up of higher education by currently excluded people means that established patterns of study will increasingly not serve their purpose. The number of non-public providers of education, from companies to communities, will increasingly challenge the hegemony universities and colleges have traditionally enjoyed.
There are a number of possible responses to these present trends and future scenarios. At Staffordshire University we are determined to be in the vanguard of change and to ensure that we are well positioned for a very different future. To set the context for our plans for change, I have identified our strengths, vulnerabilities, and our current position. I then outline our three step plan for development.
2. STAFFORDSHIRE UNIVERSITY
Strengths:
Widening Participation
Hefce and the National Audit Office have identified this university as having an excellent record of recruiting and retaining students who fit the government’s inclusion targets. Our SURF planning partnership with local FE colleges is held up as a model by Hefce and promotes opportunities all over Staffordshire and Shropshire. We recruit well above our government benchmark from target social groups. We have a particular impact on the North Staffordshire area where low aspiration and under achievement are real problems.
Good Management
Our recent external five yearly Quality Report identifies us as exceptionally well run and managed and the overall findings are described as amongst the best and indeed possibly the best overall report of this kind published by QAA. Whilst we can always improve, we are, comparatively, very flexible and student/client focused with very strong quality management. The report says, for example, that ‘Effective central guidance during the last six years has brought the University towards a self-confident maturity. The evidence generates considerable confidence in the University’s ability, both now and in the foreseeable future, to provide and maintain learning opportunities of high quality for all its students, on and off campus.
The last 9 Teaching Quality Assessments have all been awarded ‘excellent’.
Student Recruitment
Over the last six years we have reduced our dependence on clearing activities post A level results from 50% to close to 20%. This is a major achievement in a competitive market. That means more students are making us a preferred choice and coming with appropriate A level results. We have also during that period always recruited to our Hefce contract numbers and therefore have suffered no financial clawbacks, unlike many other universities.
Vulnerabilities:
Major changes in the national context create a number of vulnerabilities for us. We have always been aware of these and have been working to address them over the last few years. However, the sudden combination of external pressures makes these vulnerabilities more acute and remedial action more urgent.
Budgetary Constraints
We plan for and achieve a balanced annual revenue budget and intend to safeguard this whatever the difficulties. However, we have never had a sufficient level of funds to invest in the radical change and modernization we would like to see. Over the past six years we have identified spending from our core revenue budget for strategic developments, for example our Building the Learning Community project and Estates developments. This has been in the range of £2m per annum. In the last two years budget stringencies have meant that we have not been able to identify even this relatively small sum for investment for developments.
Unlike many other universities we have no inherited unencumbered reserves. We have no buildings or other assets we can sell to release funds to buffer a difficult couple of years for the budget and support investment in change to build a new future. The results of the RAE present another challenge. Whilst we have dramatically improved our performance, our income will be reduced by about 40% during 2002-3 and leave us with a major problem about how to find resources to fund our new and highly focused research institutes.
Recruitment Patterns
We are heavily dependent on undergraduate numbers and thus particularly vulnerable to fluctuations in applications and to competition. Moreover, the social groups we recruit from are the most affected by student financial pressures and most likely not to pursue HE because of personal or family finances. The incentives for older universities to grow and to recruit in local markets means that North Staffordshire in particular is an area of intensive competition for students from neighbouring universities.
Income Streams
Even though we are one of the highest achievers of new universities of earnings from consultancy and contracts with business and industry, we are at the stage where we need to invest to increase the net income. In the interim we are heavily dependent on government income and thus vulnerable to fluctuations. For historical and geographical reasons we are more dependent on government income than most. For example, we depend on Hefce for 80% of our funding as opposed to a sector average of 62%. We have no benevolent sponsors and have found this route hard to pursue in the past.
Current Challenges:
Student Recruitment
Undergraduate applications, when compared with the figures for the same time last year, show a drop in applications for most modern universities and a particular decline in the West Midlands. Wolverhampton and Coventry show a 10% drop and Staffordshire shows an 18.9% drop. This is due, partly, we believe to the adverse publicity around North Staffordshire and partly to the fact that national trends show lower applications in areas where we are dependent on big numbers- Computing, Business and Engineering. This does not mean that we will not recruit to target or close to target but it does mean that we cannot be certain of it and that there will be increased costs in filling our places. Clearly we need to budget for the risk that we do not recruit and that our income drops accordingly. Such a need puts even more pressure both on our annual revenue budget and on our attempts to find money to drive radical change.
The Budget
Clearly the recruitment issues detailed above represent a major sensitivity as we set next year’s revenue budget. The majority of our income is linked to student recruitment. Whilst we have in recent years met our agreed Hefce targets, we have failed, over the last two years to meet our own, higher internal targets and thus have suffered a budget shortfall. We see this trend continuing and are, as well, living with the follow-on impact of a decline in year one recruitment. There are other sensitivities. We may face a national pay award higher than the percentage increase in the recurrent grant from Hefce. Student poverty and some shift in numbers from Stoke to Stafford means that we have vacancies in our student residences of 9% as opposed to a planned 3%. The result is a loss in income. This will be compounded if recruitment is problematic in summer 2002.
Market Match
Whilst we have a good range of relevant subjects on offer, there are duplications, some complicated by our multi-campus delivery and some by traditions and structures. Our times and modes of delivering programmes and assessing achievement will need to change in order to meet radically changing market needs.
3. STAFFORDSHIRE UNIVERSITY: THE WAY FORWARD
We have options. We could wait for a recovery in recruitment and for increased government funding. However, we have decided that now is the time to build a new future. This will bring pressures on staff and all our work in the short term, but the result will be that we will move into a new and stronger financial and market position. Underlying our programme of change is a commitment to balancing the budget, year on year and building an investment fund to support radical change.
Therefore from 2002-2005 we will:
1. Invest selectively in radical changes to our profile and performance in order to reshape the University to meet new market needs.
2. Operate an ongoing cost saving and performance improvement programme to release funds for investment in the future.
3. Examine alternative sources of funding and review our current financing arrangements and our sources of income.
Step One: A Radical Reshaping of the University
We are clear that we have the potential to make a real mark in the new competitive and rapidly changing world. We are committed therefore, to reshape the University so that it becomes a national leader, has a clear niche and an assured income. The changes will be under a number of headings.
Changes in Academic Profile: Subjects
A reprofiling of the subject disciplines we offer to match market needs will include new work in some growing areas and new cross-disciplinary developments which will maximise our strengths.
Two examples of new or expanded work might be:
· In Health to meet the needs created by radical change planned in the NHS.
· With the voluntary sector and community groups.
An example of new cross-disciplinary work might be:
· Expansion in Design and Technology and Multimedia bringing together expertise across the University.
· Review of the role of work based experience for students.
Changes in Academic Profile - Estate and Opening Hours
· The realignment of our Estate to fit a changed profile of student attendance and a changed profile of students, for example, more ‘mature’ and more local students with different space and study needs.
· The reprofiling of our calendar and working arrangements to accommodate new kinds of students.