Spending on university estates up by half a billion

Capital expenditure rises by a quarter as universities aim to compete in marketised sector

November 19, 2015
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Universities’ expenditure on their estates rose 25 per cent in the past year as institutions focused on competing for students and staff, according to a new report.

Overall, capital expenditure on the academic estate (excluding residential) rose to over £2.5 billion from £2 billion in one year, for the highest recorded annual spend. These were the findings of the annual estates statistics report commissioned by the Association of University Directors of Estates (AUDE).

According to the report, universities have been able to fund extra spending through their own cash reserves and running surpluses, but also through “access to affordable debt” and bonds.

Echoing a Higher Education Funding Council for England-commissioned report earlier this year that stated a third of universities had actually cut spending on campus facilities by more than a quarter since 2008, the AUDE report suggests the overall increase was driven by high spending at a small number of institutions. However, it notes that “some institutions are in the process of substantial capital programmes, often running into the hundreds of millions of pounds over a number of years”.

George Griffith, associate director at the property advisory company CBRE and one of the report’s authors, told Times Higher Education that many universities are spending up to £40 million on their estates each year. He attributed this boost in spending to increased competition to attract students and academic staff.

“Students and staff are much more focused on what they’re getting” from the university experience, he said. “The environment is a critical part of that. Schools have got much better facilities and you can’t go from [that] into a tatty, flabby institution.”

Andrew May, director of estates, hospitality and contract services at the University of Hertfordshire, agreed, citing previous AUDE research showing that more than two-thirds of students regard facilities as a key factor in choosing their university. He also suggested investment in estates was not spurred solely by market necessity.

“What Hertfordshire wanted to do was [use] the estates strategy as the delivery vehicle for driving corporate and cultural change,” he said. “That’s when it becomes quite important and powerful. You can create a whole new 21st century environment just on the back of the physical changes you’re making.”


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