More budget cuts at City University London are ‘unrealistic’, warns union

Council demands for extra savings to boost surplus will harm staff morale, says UCU

September 4, 2014

Source: Alamy

Imprudent pruning?: the UCU branch thinks there’s no scope for more cutting

Plans to find further savings at City University London just months after a major cost-cutting exercise was concluded have been criticised as “unrealistic” by a union leader.

According to council minutes, the university is set to embark on a new wave of budget savings after wrapping up a review of its professional services, which it had deemed too devolved and costly.

The review, which abolished professional services in each department in favour of a pan-university model, has reduced annual expenditure by about £6.5 million a year, City says.

But there is a “savings shortfall of £5.3 million” in 2014-15 in relation to the review and “further savings would be made in 2015-16”, according to minutes of a council meeting held on 23 May.

In addition, City’s council told its executive that it wanted management to produce a “double-digit surplus” for that year and a break-even budget for 2014-15.

The current forecast for 2013-14 shows a deficit of £10.8 million, revised from £14.1 million, with next year’s budget having a deficit of £2.9 million, down from an outline deficit of £8.1 million.

Council members want the budget turnaround because projected surpluses of £3 million a year for 2015-16 and 2016-17 were “£12 million short of the target of £15 million estimated to be required to demonstrate sufficient financial strength to secure the long-term debt finance required to fund the next phase of estate capital expenditure”.

But Keith Simpson, president of City’s University and College Union branch, believed that further savings were “unrealistic” because the recent review had managed to find only about half of the £12 million cuts that it had initially expected to make.

“I do not see where they can get these savings,” he said. “It’s quite clear you cannot make them in professional services unless they pursue cuts in a far more aggressive style.”

Staff morale had suffered in the past two years because of the uncertainty surrounding the professional services review, but it could now hit an all-time low if another round of cuts were announced, Mr Simpson warned.

The union has previously criticised City’s cost-cutting drive, claiming that it had been used to fund the appointment of more than 100 highly paid “research-excellent” staff recruited to push City up university league tables.

City UCU has raised doubts about whether the investment will pay off and has argued that City should play to its traditional strengths of fostering good employability in its graduates.

According to the May minutes, City’s “planned increase in research grant and contract income was below target, with varying performance by schools”.

“Analysis of the value returned for the recent significant investment in research-excellent staff would be a critical consideration in the development of the next strategic plan,” they add.

However, a City spokeswoman said that its research grants and contract income had “exceeded our exceptionally ambitious plans” and had risen by 23 per cent over the past three years.

City had made a “major investment in the quality of its research and education”, doubling the proportion of research-excellent staff, increasing undergraduate entry requirements and student satisfaction scores, she added.

On its budget plans, she said: “Our council have challenged us to achieve a higher level of surplus than was originally planned.

“Further work to increase income and reduce expenses awaits confirmation of our 2014 student enrolment figures.”

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