An industry-style focus on teaching costs is vital to survive the pandemic

Cost transparency isn’t in universities’ DNA, but those who teach and design modules must be able to apply a clear budgetary model, says Terry Young

September 11, 2020
a magnifying glass on charts
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After a year of unprecedented disruptions and change, it is clear that, as the new semester approaches, students need better experiences, universities need better business models and staff need better workloads.

I split my career between industry and academia, encountering the academic world at many levels and locations and learning pedagogy from scratch at 41. As a result, I developed a hybrid mindset and often felt alienated (sometimes, alienating) in discussion with academic colleagues and senior managers.

The relentless simplifier in industry is to reduce any problem to cash flow, something deeply imprinted on all managers. On the single occasion I entered the director’s office seriously worried about my job, it was over a bid I was running. A senior manager felt the proposal showed too much risk: he wanted to rejig the numbers (fine by me) but wanted me to sign off his new picture (big problem). That it went to the director and that I kept my job shows how deeply embedded and widely spread this sense of cost and value was. You knew what the numbers were, and you took responsibility at all levels.

My observation on academic life was that because planning and module design were spread across departments and functions, nobody had a robust picture of what was happening or knew the full consequence of change. As a result, mythologies were propagated by everyone to everyone from new staff to vice-chancellors. I remained sceptical about academic cost collection and the conclusions drawn from it, and I would stubbornly try to work out the “real cost” of decisions whenever I could.

Why is this so critical to universities just now? The problems they face are not just about fast, radical change that must add up to a sustainable future; they are about what decisions need to be made, at what level and how to coordinate them across boundaries. I have come to admire the smart thinking of front-line teaching staff, but this distributed expertise is hard to harness to any central, but still distributed, planning process.

Some form of industrial thinking is needed, whereby those who teach and design modules apply a clear, if simplified, budgetary model. Is this possible?

Let’s explore a more industrial mindset, using the example of how affordable small-group teaching is for universities, online or in coronavirus-limited seminars. We may have to implement wholesale change to run them, but how viable are small groups themselves?

Imagine a UK institution that charges an annual £10,000 for 120-credit-a-year degrees, paying its staff an average £45,000 (which, with National Insurance and pensions, costs almost £55,000) for 60/40 teaching/research contracts. These figures are reasonable, but the trends they reveal should hold even if you change the details (and I hope you build your own model).

Let’s assume that the central administration consumes 60 per cent of the £10,000 fee but covers all other staff. My experience was that discussion about the size of any centre was shrouded in mystery, but we are probably being cautious if we allocate 40 per cent of fees to direct academic effort in teaching and learning.

A model for academic preparation and assessment completes the picture and shows that our fictional university has up to 55 academic minutes per credit per student per year to deliver undergraduate degrees. I would guess most ceilings are much lower.

Nobody ever wanted to discuss such a number with me! The nearest I got was a pro vice-chancellor who quietly explained that revealing a number like that would lead to all kinds of difficult conversations.

a table

If a module is delivered over 10 weeks and students in groups of five have just one hourly encounter a week with an academic, you can work out the budget-breaking options in terms of number of students on the module and number of credits offered. Two encounters a week would bankrupt five-credit options; four times a week would do the same to the 10-credit options.

At the other extreme, weekly tutorials (two students per academic) are viable for all 20-credit or 40-credit modules, as well as large 10-credit modules. 

a table 

This is a crude model – so be careful – but several conclusions emerge. First, modules that confer more credits while attracting more students support more affordable small-group options. So widespread use of small-group teaching in person or online is affordable, but – within the UK system, at least – will require significant module redesign to create the academic time.

If staff already running 20-credit (or more) modules with 100 or more students can make the case, good solutions exist for significant face-to-face education (online or in person). Creation of super-modules (eg, 40 credits, 1,000 students) would increase the options even further; a project management course run for all business and engineering students, for example, would play to scale in this way.

But even if, on tweaking the numbers, you reach different conclusions, my job is done. The point is that it will be hard to navigate this crisis without greater consensus and transparency on affordability. It may not come naturally to universities, but a more industrial mindset needs to be part of the new normal.

Terry Young is an emeritus professor at Brunel University London and the founder of Datchet Consulting. He worked for GEC and Marconi before serving as professor of healthcare systems at Brunel from 2001 to 2018.

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Reader's comments (7)

This is an approach that focuses on cost and not value. You can’t apply ‘industrial’ models to academia for a very simple reason: a university is not a factory churning out identical widgets but a place of learning where outcomes aren’t predictable and shouldn’t be. Presumably this genius model should also apply to composers? If a symphony doesn’t use the clarinets very much then it’s not cost effective to play it. Or books? If an author doesn’t use every letter of the alphabet equally, it’s not economical to print it. What a waste the letter X is. The fundamental error here is the belief that fees pay for contact time - they don’t. They pay for membership of the university. And membership means you’re paying for everything, not just the bits you use, because you’re part of the community and you get out what you put in, not what you pay for in some bizarre spreadsheet calculation. There are other forms of capital than just money, after all. Some knowledge is worth preserving, developing, and passing on regardless of how many people are ‘interested’ and the value might only be realised many years, possibly decades, later. If you start treating knowledge like it’s a fast moving consumer good with an instant return we’ll soon be teaching nothing but how to look like a Love Island contestant or best ways to make viral Tik Tok videos. Actually, there’s a thought...
Totally agree. The purpose of a company is to return profits to shareholders, which is not the purpose of a university. For the reasons given above and for others that I am sure can be provided, reducing everything to costs is a depressing state of affairs. There is nothing wrong with profit nor companies as they are essential to society, which I have no wish to radically reform. However, their model does not fit every entity within a civilisation.
Exactly. Academia is not industry. It is a completely different institution with completely different priorities to any industry.
"Let’s assume that the central administration consumes 60 per cent of the £10,000 fee" ... and then let's fight over the rest. The elephant in the room here is central admin. If they consumed less, we could afford more. Maybe if there were fewer of David Graeber's bullshit jobs in the centre, we wouldn't be in this position?
Well thank god you have retired from the system. The key question you do not even address is the complete waste of money on bureaucracy in the Universities. It is overpaid managers with little value added that are consuming far too much of fees that students pay. I calculated on one of my modules with 260 students paying £9250 and the module was 1/8th of the full time lecture load that means my module generated £300,655 for the University divided by 20 hours of teaching equals £15,031.25 per hour taught or £30,063 for the two hours I taught. That is excluding the foreign students paying an even higher rate. I teach other several other modules on top of this. So where is all that money going ???? certainly not into my pay packet ! So please address the more interesting question of why Universities have so many bureaucrats why the academics that generate the teaching and research get so little then you might have something useful to do in your retirement !
A university are not a factory and knowledge is not a commodity. Too many top managers at universities behave like they are the next Elon Musk of higher education.
I'm amazed that the top slicing of University revenue for the maintenance of central administration has been so casually dismissed. Having cost centres which are not only expensive but which have little relative value is an unacceptable burden to a University. Of course it's the elephant in the room. Let's be clear. The primacy of any University's activity is the delivery of properly constructed education by those who deliver it ... Lecturers. Any other activity which does not directly support this primacy is, quite frankly, secondary. Course design was once a thing of beauty, constructed by those in full charge of their discipline(s). There were natural reins introduced by the sensible consideration of resources by course teams. Non academics did not have a seat at the table. Now it's difficult for academics to find a seat at the table. These are difficult times and managers are getting found out. Covid-19 is presenting the sector with an opportunity to purge the toxins that have accumulated in the University body. Not necessarily because there is a desire to do so but certainly because it needs to be done.