Jobs at risk as Open University announces £100 million cuts

UK’s distance learning institution looking to save equivalent of nearly a quarter of its budget

June 13, 2017
Money cuts

The Open University is to cut £100 million of annual spending in a radical overhaul that is likely to lead to course closures and significant job losses.

Announcing a six-month review of all aspects of its operations, the UK’s distance learning institution, which has about 175,000 students, said that it was looking to save the equivalent of nearly a quarter of its £420 million annual budget.

More than half of the savings would be reinvested on an ongoing basis in retraining staff, developing technology and changing the curriculum to ensure that it was “digital by design” and delivered a “hands-on, highly personalised education” to students, said Peter Horrocks, the university’s vice-chancellor.

Speaking to Times Higher Education, Mr Horrocks was unable to say how many job losses would take place under the changes nor how many courses would be discontinued.

He said the OU, which is based in Milton Keynes but employs 4,400 academics and support staff and 5,000 associate lecturers around the UK, would “stay a broad-based university, but there are significant trimmings that can be made” by tackling duplication and inefficiency that had caused some areas of teaching and research to become loss-making over the years.

“The OU will still be the OU,” said Mr Horrocks, the former director of the BBC World Service who took charge of the university in May 2015, adding that it would “retain our core mission of offering higher education to all, regardless of background or previous qualifications”.

“But we will be delivering it in a different way, matching future needs to future technology.”

The cuts come even after the OU reported an operating surplus of £10.4 million in 2015-16, following several years of major deficits – £10.5 million in 2014-15 and £16.9 million in 2013-14 – and strike action by union members over the closure of seven regional centres.

Mr Horrocks told THE that the university “could be facing a significant operational shortfall of tens of millions of pounds in the years ahead” as numbers of part-time students continued to drop. Student numbers have fallen by almost a third since 2010, while its fixed costs had remained relatively static as competitors “cherry-picked” popular and profitable courses run by the OU, the university said.

Nonetheless, the OU would become “more important than ever” to lifelong learning, insisted Mr Horrocks, because it would provide “effective digital learning for people in work regardless of whether they had done a degree or not”.

As part of a two-year transformation programme, the university plans to offer a more “streamlined curriculum shaped to students’ needs and adaptable to change”, “high quality research focused closely on the teaching curriculum to maximise its impact”, “close links with employers to ensure the curriculum reflects the skills they need” and “a redesigned university free from duplication, overlapping responsibilities, unnecessary bureaucracy and inefficiencies that have developed over decades,” a statement said.

“We want to transform the University of the Air envisaged by Harold Wilson in the 1960s to a University of the Cloud – a world-leading institution that is digital by design and has a unique ability to teach and support our students in a way that is responsive both to their needs and those of the economy,” said Mr Horrocks.

“We were disruptive and revolutionary in our use of technology in 1969 and, as we approach our 50th year, we intend to be disruptive and revolutionary again, to transform the life chances of tens of thousands of future learners.”

Sally Hunt, the general secretary of the University and College Union, said that OU staff wanted more information about how jobs would be affected.

“Staff are understandably worried about plans that appear not to have been thought through, and they have little confidence in the next steps of the process,” she said.

jack.grove@timeshighereducation.com

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Reader's comments (1)

Arguably, the OU is the canary in the mine, the first large UK university to have to face major challenges to its global footprint, its business models and administrative processes, its IT systems, its cost structures, its competitiveness, its funding sources and the wider viability and impact of its highly-regarded teaching and research. According to the OU’s briefing document, radical reinvention is the only way to counter its trifecta of challenges: falling enrolments/income; high fixed costs; and lower barriers to replicating its successes (as seen in competitors who “cherry pick” its popular and profitable courses). The UK needs to define goals for a possible co-developed solution to the challenges facing the sector. For example, universities could collaborate to set a goal of giving staff and students more agency in respect of developing “radical forms of reinvention”, which safeguard innovation, academic freedom and jobs. Is greater agency feasible? Yes, if we avoid taking anything as given (in the sense of unchangeable) and as part of that, we avoid being trapped by the terms we use. An example is our tendency to talk in terms of a “course”, a “syllabus”, “retention”, “recruitment”, “analytics”, “targets”, etc. This tends to blind university leaders to other ways in which they could encourage their staff and students to engage with each other and create new insights. At an instrumental level, one outcome of this could be to help students and staff to think longer, deeper, and maybe differently about their subjects. Contrast “syllabus-bound teaching as analogous to covering ground at speed” with “self-directed learning as a personal path to scholarship, creativity and deep intellectual value” (involving thinking about the possibilities inherent in a map of a domain, finding companions (peers. mentors) for possible journeys using maps or to create new maps, and planning or reflecting upon each experience in a journey.) New flavours of technology (as per OU's VC) can be useful on such journeys but can easily become crutches as with over-reliance on GPS. I hope that HE leaders can negotiate a constructive and workable way to feel comfortable with getting more feedback from all stakeholders (including all students and staff, not just in the UK but in the wider world, eg Europe, USA). This will help us to come to a better understanding of the nature and complexity of the challenges facing our wider communities. In parallel, unions and/or university leaders could reasonably invite researchers in these areas to share any unpublished findings on failures and successes in planning and implementing change in institutions. (Ironically, the OU is leading some admired research on this, and is innovatory in many areas, e.g. their “ICEBERG model”.)

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