THE DataPoints is designed with the forward-looking and growth-minded institution in view
The cost of employing staff in central administrative and management roles, including vice-chancellors, in universities has gone up almost 7 per cent in a year, according to the latest data.
According to figures published by the Higher Education Statistics Agency on 7 March, about £2.7 billion was spent on staff costs in administration and central services in 2016-17, up from £2.5 billion the year before, a rise of 6.7 per cent.
Staff costs in this category include “expenditure in respect of central administrative staff and such payments to Heads of HE providers, Professors, Deans, Tutors, Faculty Officers and the like…in respect of central (as distinct from departmental) administrative work”, according to Hesa definitions.
Overall, staff costs went up 4.6 per cent across the UK but the rise was smaller in every other category.
Spending on staff in academic departments was up 5.4 per cent; for staff classed as working on research grants and contracts spending rose 4.1 per cent; and for staff in academic services (such as libraries) the rise was 6 per cent.
The figures may be uncomfortable for universities in the current climate of staff striking over pensions and the government’s review into the funding of higher education.
Income figures in the same Hesa release show that tuition fee income in the UK went up 5.5 per cent in 2016-17 to £17.7 billion, a figure that represents virtually half of all income (49.7 per cent).
Some other main categories of income were fairly static: funding body grants fell 1.2 per cent to £5.1 billion (reflecting the continued shift to fees) while research grant and contract income went up 0.5 per cent to £5.9 billion.
Staff costs, which represent the bulk of spending in universities, represented a similar share of overall costs compared with 2015-16 (about 55 per cent). All other areas of spending rose apart from expenditure on interest and financial costs, which fell by 5.4 per cent.
Other operating expenses rose 3.4 per cent to £12.5 billion while fundamental restructuring costs, which make up a small share of expenditure overall, went up 30 per cent to about £80 million.
Overall, UK universities made a surplus of about £1.2 billion in 2016-17, which represents about 3.3 per cent of their income. This was a fall of about £500 million from 2015-16, when the combined surplus was almost 5 per cent of income.
Reacting to the figures, Sally Hunt, general secretary of the University and College Union, said universities should be investing more in staff "at every level whether academic, professional or support staff – everyone plays their part".
But she added that although senior pay had "mushroomed", staff costs were "actually below where they were a decade ago, while the bill for capital projects has gone through the roof. In every survey of students they make it clear they want to see money invested in staff, not fancy buildings.”
A University and Colleges Employers Association spokesman said that the latest Hesa data were a "timely reminder that HE institutions invest heavily in staff" and added that the "often overlooked rise in staff investment is part of a pattern in recent years".
"The 4.6 per cent overall increased investment in staff between 2015-16 and 2016-17 is a result of a range of factors, including pay awards, increasing employer contributions, the abolition of a National Insurance rebate, pay drift from incremental progression systems and changes in the composition of the workforce. The 2.3 per cent growth in sector employment in 2016-17 is also worth noting as HE institutions continue to focus on providing their students with the education and services they expect.”