Wealthy few win top prizes

May 23, 1997

A SELECT band of universities is sitting on millions of pounds of reserves while the rest are struggling for cash.

Figures released by the Higher Education Funding Council for England this week show the sector barely breaking even and with little left for emergencies.

A handful of institutions share the bulk of the Pounds 540 millionin cash balances which do exist. A small number had debts last year of more than Pounds 1,607 million. Most have no spare money to reinvest or deal with unexpected problems.

Vice chancellors have called for urgent investment in higher education as league tables out this week show wealthier institutions scoring highly.

Top marks in both research and teaching go to the University of Cambridge, a high earner from research and consultancy. Other high scorers include Oxford and University College London, which also benefit from exceptionally high levels of outside income.

At the other end of the scale there were more institutions in trouble this week. Union leaders at Exeter University threatened industrial action against proposals to axe up to 100 lecturers' jobs to make up a Pounds 2.4 million shortfall.

Staff at the University of Luton passed a vote of no confidence in vice chancellor, Tony Wood, after hearing that 80 jobs were to go, 49 through compulsory redundancy.

A spokesman for the Higher Education Funding Council said: "Institutions are still facing considerable pressure because they don't have the surpluses necessary to reinvest or provide for flexibility. Within the overall picture there are considerable fluctuations."

The number of institutions facing immediate financial difficulties has remained constant at six over the last two years but all the institutions have changed, suggesting some success in managing financial crises.

The picture is also slightly better than forecasts indicated last year, when funding chiefs predicted a surplus of just Pounds 49 million this year and a Pounds 13 million deficit in 1996/97. Actual figures show a sector surplus for 1995/96 of Pounds 109 million but this is still only 1.25 per cent of total income. It falls short by Pounds 150 million of the 3 per cent surplus needed for investment.

And next year's forecasts are bleak. Operating surpluses are expected to fall to just Pounds 21 million in 1996/97, which means a Pounds 245 million shortfall against the 3 per cent target.

Again, this disguises stark contrasts between a handful of institutions with high operating surpluses and others with almost nothing at all.

David Tupman, policy advisor at the Committee of Vice Chancellors and Principals said: "Year-on-year efficiency gains take their toll, as these figures show."

He said the university system was inevitably diverse but differences in cash levels could badly affect students.

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