Red ahead; staying in the black

Whatever the outcome of the election, strong financial leadership will be key both to the country and our universities

April 30, 2015

From Bill Clinton’s memorable electoral blueprint (“It’s the economy, stupid”) to George Osborne’s dull update (“long-term economic plan”), it is a truth universally acknowledged that every politician in possession of high office must have convinced the country of their economic credibility.

So it is that, for the past five weeks, we have been fed a monotonous diet of claim and counterclaim about the financial literacy of our would-be leaders – a trail blazed by Tory strategist Lynton Crosby, whose remorseless message is that blue equals prosperity, red financial Armageddon.

In higher education the debate has had much the same tenor: Labour claims the funding system is “going bust”, the Conservatives that Labour would wreck a set-up that is the envy of the world.

There remains much nervousness about the financial implications whatever the colour of government

The campaign’s second defining characteristic has been uncertainty about the result, and as 7 May approaches, this week we present a host of analyses to shed light on possible outcomes.

The first is a snapshot poll on the voting intentions of higher education staff. Of the 1,019 university employees who responded to our survey, the lean to the Left is of Tower of Pisa proportions: Labour leads by a country mile, with just one in 10 planning to vote Conservative, and four in 1,000 favouring the UK Independence Party.

In second place, with a 22 per cent share of our poll, is the Green Party, and in our features section this week, we spent a day on the doorstep with an academic running as a Green candidate.

Standing in a true-blue constituency in Kent, Tim Valentine is not expecting to give up his day job as a professor of psychology, but his experience on the campaign trail provides an insight into the issues that come up, and the reception given to arguments deployed by an academic with political activism in his blood.

Elsewhere in our news section, we assess what possible outcomes nationally may mean for higher education. There remains much nervousness about the financial implications whatever the colour of government, as voiced by Lorraine Dearden, professor of economics and social statistics at the UCL Institute of Education, who warns that “massive” departmental budget reductions await.

The question of what universities have done to prepare for such an eventuality is addressed in our main feature – the annual financial health check that we carry out with accountants Grant Thornton. The analysis highlights a 12.6 per cent year-on-year increase in surpluses, which puts universities in a healthy position, but which commentators insist should not be seen as fat to be trimmed, but as an essential war chest to “fund the future”, particularly in light of demands for capital investment.

Our feature also makes clear universities’ reliance on international student fees – now more than 12 per cent of overall income – and re-emphasises the risk posed by ill-thought-out immigration policies (a risk addressed in our opinion section by Chris Cobb, chief operating officer of the University of London).

Immigration is, of course, another battlefront in this election campaign, along with the future of the health service (summary: NHS great, immigration awful, the latter partly to blame for the crisis in the former).

The irony is that the staffing of the NHS is largely propped up by immigration, and for universities the dynamics are different, but the upshot is the same: put simply, they couldn’t do without it.

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