Debt rise despite staff fall

June 19, 1998

STAFF are being axed across higher education as debt levels continue to rise, an annual financial guide to the sector has revealed.

A detailed financial analysis of 158 higher education institutions shows that their staff numbers fell by more than 11,000 between 1996 and 1997 to 231,000. The number of academics fell by 7,250 to a 1997 total of 96,902. But despite this fall, staff costs rose by just over 4 per cent to a sector-wide total of Pounds 5.76 billion.

The latest yearbook from Noble Financial Publishing, a division of the independent Edinburgh-based finance house Noble Group, shows that total debt across higher education has risen by more than 33 per cent over three years, from Pounds 1,742 billion in 1994 to Pounds 2,321 billion in 1997.

Worst hit are the new universities, whose debt represents some 36 per cent of their total income, compared with 9 per cent for the oldest universities. In the past year alone, debt among the former polytechnics has risen by about 7.5 per cent, while the corresponding rise for the ancient universities is less than 2 per cent.

The foreword is by Auriol Stevens, editor of The THES, the report's sponsors, who acknowledges "justifiable irritation" at crude rankings in league tables. But she says institutions that receive large amounts of public money must be accountable for its use, making comparisons inevitable. The answer is to make sure that as much data as possible is available, and is used to help institutions improve their performance.

The yearbook "provides that kind of fine-grained information in the financial area. Its detailed tables are useful rather than distorting. By measuring many variables they allow institutions to check their performance against others with similar missions," Ms Stevens says.

Oxford and Cambridge universities continue to generate the most research income, Pounds 107 million and Pounds 93.6 million respectively. Almost two thirds of the sector's total research income of Pounds 1.46 billion was generated by 20 institutions, mainly traditional universities and specialist colleges.

The School of Oriental and African Studies continues to have the highest average staff costs, Pounds 34,139, which the yearbook says is a "crude indicator" of average salaries. Second highest is London Business School with Pounds 33,223, while the Open University has the lowest average staff costs at Pounds 11,060.

Noble's Higher Education Financial Yearbook 1998, price Pounds 215 (Pounds 180 to higher education institutions) is available from Noble Financial Publishing, 76 George Street, Edinburgh EH2 3BU. Tel 0131 225 9677; fax 0131 225 4044. It is also on CD-Rom.

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