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“... the credit rating agency Moody’s predicted greater financial pressures for universities over the next three years because of rising staff costs, due to pay rises and pensions, and falling revenue from tuition fees, which are not index-linked.” theguardian.com/education/2019…
1/ While UK universities have borrowed hundreds and even billions of pounds in their recent construction boom, it is clear that their financial planning has always been suspect. Their assumptions were often that income growth would continue in a straight line forever.
2/ These assumptions of perpetual fee income growth were never credible. Most UK universities struggle somewhere in a narrow band between small surplus and smallish deficit these days. When will these institutions make £1 billion to pay off this debt?
3/ In truth, these universities are now hobbled by their debt burden. Job cuts & voluntary severance programmes are everywhere. This same cost-cutting arithmetic led to the USS pensions strike as CFOs look desperately to save pennies to meet the interest cost on all this debt.
4/ The alphabetti spaghetti of academic life - REF, TEF, NSS, KEF - chains academics to overwork and mental ill-health. The corporate university demands constant overwork to cater for increased student numbers & increasing research funding pressures.
5/ The sums just don’t add up. The govt has already had to bail one university out of insolvency with an emergency loan. How many more are tip-toing along that ledge between bare solvency and collapse? How many of these loans have simple acceleration / termination clauses?
6/ How many of these loans can be instantly recalled when Moodys identifies a fall in credit worth? Many institutions have a mosaic of debts any one of which could be recalled on a simple credit downgrade clause. Remember Lehman. When one falls, they all wobble dangerously.
7/ They say a CFO at one university was heard to say that banks are willing to lend & that the banks will have done their homework, so universities should be comfortable about borrowing. Well, I say just because people are prepared to sell me heroin doesn’t mean I should buy it.
8/ The average university approaches its business as a dumb corporation. Today govt ministers are concerned about admissions practices - an administrative role across the sector - breaching consumer law. Universities will try anything to get 17 year-olds to sign up.
9/ All of this takes away from the classroom and the lab. Class sizes are rocketing. The time to produce “world-leading” research is contracting. Young academics are on precarious contracts. Everyone works weekends. And just so that the new building can have a “wow factor” atrium
10/ We are losing sight of the purpose of a university. When we all need more time to think about a scary world & to educate the next generation to cope with it, we are running everything into the ground. We spend money on buildings but not on pensions, or books, or class sizes.
11/ The corporatised, marketised, league table-obsessed university sector has lost sight of its core missions: cooperation, education & discovery. The only worthwhile university now is a cooperative university where the teachers control teaching, the researchers control research.
12/ How can our students learn or our academics innovate under all this pressure? It is time for profound change. A return to what matters. An end to the corporate university. Co-ops share management among staff. Their goals are communal. This is the future for our universities.
