Senior managers at University College London have pressed ahead with expansion plans despite concerns from the institution’s finance committee that it may be growing too quickly, minutes of meetings show.
The university’s finances have come under close scrutiny in recent weeks after the announcement in April that it had secured a £280 million loan from the European Investment Bank (EIB) as part of a £1.25 billion expansion plan that includes UCL East, a new 11 acre campus in Stratford, East London, set to open in 2019.
On 11 June, the Financial Times revealed that the provost, Michael Arthur, had reportedly told a meeting of academics that it was in a “barely financially sustainable position”, and it cited questions from trade union representatives over how UCL would finance the EIB debt.
This followed concerns from academics that the university was unreasonably clamping down on the use of expense accounts to help it finance the Stratford campus.
Minutes of UCL’s finance committee show that it also has had concerns about the expansion plans, Times Higher Education has discovered.
At a meeting on 2 July last year, the committee discussed the university’s target of a 5.5 per cent budget surplus by 2017-18, which was seen as a benchmark for “financial sustainability”. The surplus in 2014-15 was 2.5 per cent.
“A question was raised as to whether the UCL capital programme should be slowed down in order to achieve savings and increase the surplus in the short term,” the minutes say.
“It was noted, however, that the senior management team had made the judgement that a delay in the capital programme would jeopardize the delivery of UCL2034 [UCL’s strategic plan to 2034],” they say.
“The committee highlighted the importance of UCL achieving its surplus target in order to invest it [sic] its estate, IT and staff and remain sustainable and competitive,” the minutes continue.
Worries about decision-making over capital projects stretch back to 2014, the minutes reveal. At a meeting on 23 September 2014 during a discussion of the committee’s functioning, the chair, Simon Melliss, noted that there was “little agreement among members regarding the effectiveness with which the committee approached a number of important issues, notably financial strategy, budgets and forecasts, performance, capital expenditure, and risk”.
The minutes reveal that there were “concerns over the absence of sufficient background information to inform decisions on specific capital projects”.
A spokeswoman for UCL said: “The UCL finance committee has fully approved all of UCL’s financial plans. As with all committees, a range of views are expressed during the course of discussions.”
Professor Arthur has responded to allegations that UCL finances are under strain in a letter in the FT, where he says the surplus is budgeted to nearly double this financial year.
“We are second only to Oxford among UK institutions in the level of research funding we attract, and we continue to be a magnet for bright students around the world. We must deliver first-class facilities and infrastructure for those who work and study here,” he writes.