I am writing to tell you more about Getting in Shape - Investing in Our Future, the new programme I am leading in partnership with colleagues across the University to improve how we manage our money, activities and services, and grow investment in our teaching, research, staff and students.
Our University finances
Our University finances have never been more sustainable. Nottingham now has an annual turnover of £660 million, a world-leading research portfolio worth £600 million, and we generate a healthy annual surplus - not a profit - that is re-invested every year on the things that are important to us all at the University.
So why would we want to run a programme dedicated to making efficiencies and growing income?
Simply put, while our finances have never been more sustainable, they have also never been more under threat. Almost half of the University’s income is now secured from student fees, 18% from research grants, 17% from fundraising and investments, and just 14% from central government.
The Augar Review threatens a cut in the student fee to anywhere between £6,500 and £7,500 - potentially with no compensation for the loss of income - a cut to £6,500 would reduce the University’s income by £60 million annually. The University, our sector and indeed the country, faces the as yet incalculable costs from Brexit on our research funding, EU partnerships, and international student income. Meeting the automatic increases in employer contributions to the USS pension scheme scheduled for this October and next April will cost an additional £10 million.
Investing in our University
A less ambitious or less successful institution might recoil from such challenges and seek to reduce investment or cut costs. At Nottingham, we prefer a bolder approach. We want to continue to increase investment and grow, spending £450 million over the next five years on the priorities we all share - our research, our teaching, our staff and students.
This investment will fund our research strategy to continue to break new ground and increase our international academic presence. It will help improve services and support for our students’ welfare and education. It will deliver improvements in our digital technologies to support research activities and student teaching. It will upgrade our existing building stock so that we all have research, teaching and working facilities that are fit for purpose.
Getting in Shape – Investing in Our Future
To fully realise that investment and make us ever more sustainable - in environmental as much as financial terms - will need effort and imagination from us all as a University community, to generate the income and improve how we work to create some of the money that we need.
As we spend £450 million over the next five years, we also want to generate £68 million over the same period - £35 million by reducing waste and making every pound go as far as it can, £15 million by growing income from academic activities, £10 million by developing new commercial opportunities, and £8 million by stopping non-priority activity.
Getting in Shape - Investing in Our Future is a both recognition of fact and a statement of intent. We know we are out of shape and could be more efficient in how we run things at the University or purchase our goods and services, and we know we can continue to spend more money on the things that are important to our future as a leading global institution. The programme will deliver the expertise, tools and support we will all need to make sensible efficiencies and create new ways of attracting income through:
- Efficiency: finding ways of doing what we do already in a more cost-effective manner, spending less on unnecessary or unproductive bureaucracy to spend more on our shared priorities, for example, using the ‘lean’ business techniques adopted by many of our partners in industry such as Rolls Royce.
- Income Generation: examining how we can generate more income from our research base, fundraising, investments and business activities such as ‘spin-out’ companies and other commercial enterprises.
- Building on our Strengths: growing further income in areas where we excel in teaching, continuous professional development, online study programmes and increasing the numbers of postgraduate students.
- Stopping: stopping non-priority activities that take up resources but deliver limited value. As a University, we are rightly excellent at instigating new work, however, we are less good at stopping activities that have not met our high expectations.
Our colleagues in Finance are already working to improve procurement processes so that we can more easily obtain the goods and services we need. A new Procurement business partner, akin to the model in Finance and Human Resources, will align to each faculty and professional services area to understand their buying priorities and provide expert advice to get the best use from budgets and purchases.
This programme has nothing to do with the sorts of budget cuts or compulsory redundancies you may have seen reported in the media at other institutions. It has everything to do with making the changes to our spending on activities that we have all wanted to see for years – collectively, collaboratively and constructively. This is why Getting in Shape will not be an initiative that is imposed from the top-down, but one that involves us all as a University community.
Over the coming months I will be asking all of us, including my UEB colleagues, to think boldly about what is important to us in our finances and what can we do differently. This will be a shared endeavour, bringing together colleagues across our academic and professional services community to agree the ideas and share a responsibility to deliver them together.
Following initial sessions with senior leaders in faculty and professional services over the next few weeks, workshops will be open to all staff across the year to provide more information. We will also launch a platform to gather and discuss ideas from across our University community to make savings or generate income. Our University’s strategy and decision-making committees have benefitted hugely from being opened up to staff of all grades and professions. I am sure that our finances would benefit in a similar manner.
I look forward to working with you all and you have my promise that every pound that is generated through this endeavour will be invested straight back into our University.
Professor Sam Kingman
Pro Vice-Chancellor, Faculty of Engineering
22 May 2019