Navigating Uncertainty: Decision-Making by UK University Leaders
UK university leaders face challenges in assuring financial stability amidst global uncertainties like economic shifts, geopolitical tensions, and the impacts of Brexit and the pandemic. Issues encompass institutional uncertainties, financial obligations, and strategic planning processes to sustain operations and innovation.
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DECISION MAKING BY UK UNIVERSITY LEADERS IN UNCERTAIN TIMES HEATHER EGGINS UNIVERSITY OF CAMBRIDGE & STAFFORDSHIRE UNIVERSITY
THE INTERVIEWEES Chairs and Members of Governing Bodies of UK Universities and Vice-Chancellors/Principals Responsible for the strategy of the university Their task to assure the financial stability of their institutions to enable them to teach, research and innovate 20 in-depth interviews from Oct. 2018
The range of uncertainties has never been wider GLOBAL UNCERTAINTIES Economic Geopolitical Coronavirus UK UNCERTAINTIES Sterling Poor economic outlook post-corona Brexit fallout: no deal risk
Will the government allow any university to go bankrupt? Institutional Uncertainties Pensions Continuing impact of Brexit: EU students, research funding, collaboration, EU academic mobility Ongoing concern relating to AUGAR Review Competition for home students:fines, control of numbers International students The ongoing effects of coronavirus
The mission now is to pay the mortgage MONEY THAT HAS TO BE FOUND Repayment of interest and capital on long-term loans due to recent expansion of university estates Payment for major ongoing building projects: risk of penalties if cancelled Staff salaries Staff pensions Maintenance costs of estate and of the delivery of courses
We can build in short-term resilience but if income goes down, there are only so many levers you can pull Losses and extra charges: an example of one university Loss of Horizon 2020 and possible EU research funds Loss of students; loss of Erasmus progamme EU students (5%) International students(20%) Rise in employers pension costs Weak sterling causes extra costs in supply chain Stock market drop affects portfolio valuation
Our thinking is much more strategic than 20 years ago Risk Register: Need to check risk register regularly must only take actions that support what you want to do Continuous monitoring of cash flow Scenario Planning Pro-active lobbying Appeal to Welsh, Scottish and Westminster governments Carefully targeted marketing
THE COVID19 CRISIS Mitigating strategies for the What Ifs Task force to which all areas contribute Risk outcomes under different scenarios E.g. No EU students, no international students Risk groups and teams for each group Restructured traditional lines of reporting Mental health management PRESERVE INTELLECTUAL CAPITAL
The university is an oil tanker that is slow to turn Actions Be under borrowed if at all possible Aim for low gearing and low borrowing Close the capital programme; cost in bare maintenance No new appointments; no replacement appointment Redundancies Close departments not covering costs Consider mergers KEEP AFLOAT
Be resilient and adaptable. We must keep doing the right thing for society, and serving the needs of society WHAT WORKS Connectivity : ability to teach classes e.g. Collaborate Acceleration of changes to admissions, income streams and working practices Creation of shared and flexible spaces Search for replacement sources of funding Marketing MAINTAIN INTELLECTUAL NETWORKS
