Greater central control of budgeting is the secret to boosting a university's teaching and research ratings, as well as dealing with any financial deficits, according to Leicester University's vice-chancellor Bob Burgess.
In a seminar entitled "How to Motivate a University", Professor Burgess told the next generation of university managers how Leicester had turned around its fortunes.
Professor Burgess said that when he first took office in 1999 he had been puzzled as to how the entire budget could be allocated in a single meeting.
He then realised it was being given to local departments to distribute.
A new approach was to centralise financial control, taking local politics out of appointments and thinking more strategically across departments to set realistic student recruitment targets that could be met.
For example, one department had repeatedly failed to recruit its student target of 80, but was loath to reduce the figure for fear of losing resources. It now had a student target of 40, which it meets, and claims the missing resources by meeting other targets.
Professor Burgess' strategy included:
* Generating a surplus to plough back into academic teaching and research
* Building the confidence and self-esteem of the institution
* Finding ways to involve everyone in raising income, part of which goes to their departments and part to central coffers
* New projects, including new buildings
* Bringing in new people and promoting existing staff
* Holding regular meetings with heads of departments to keep up-to-date with their concerns.
Professor Burgess was speaking at the end of the first residential week of the Institute of Education's MBA programme in higher education.
The two-year course is entering its second year and has students who work across the spectrum of university life.