Too early to panic

January 5, 2007

Your article "Pay deals set to force sector £68m into red"

(December 22/29) showed the predictable response from the bean-counters.

Accountants are trained to be conservative in their forecasting and those in higher education institutions and the Higher Education Funding Council for England are no exception.

Institutional forecasts regularly prove to be overpessimistic and a 0.4 per cent margin is no cause for alarm. The equivalent forecast for 2004-05 said that there would be only a £70 million operating surplus for England but the actual outcome was £165 million in the black.

The pay deal for 2006 included a financial review of institutions to report by autumn 2008.

It seems that institutions are trying to position themselves in advance of that. The review is intended to introduce some transparency into the assessment of the pay problems of higher education and to enable us to cut through the game-playing, which your report demonstrates so effectively.

The 2005 estimates published by Hefce showed some substantial discrepancies from the published figures for anticipated fee and grant income, which were not adequately explained. As your article points out, income from tuition fees is set to rise by 2008-09, when it will represent a significant increase in the income of all English institutions.

Malcolm Keight
Head of higher education
University and College Union

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