29 January 2025 
Amanda Darley, Head of Operations and Engagement
Is it STILL January?! Yes, it is, but only just, and there are some important deadlines coming up in February - submissions to the Comprehensive Spending Review must be in by 9 February and responses to the consultation on the new OfS Strategy (which includes sector resilience, financial sustainability, and effective governance) by 20 February. (BUFDG will be responding to both). This OfS blog sets out what the OfS intends to do to help universities ensure their long-term financial sustainability.
A question that seems to rumble around a lot in recent years is ‘Are universities worth it?’ Well, the Resolution Foundation and the Policy Institute of King’s College London have delved into the returns/benefits provided by higher education for both graduates AND the economy, and you can read the resulting report and/or watch a recording of their webinar (featuring the Minister for Skills, Baroness Jacqui Smith, and former Universities Minister, David Willetts) which deal with this very question. (Spoiler alert – universities are worth it – an undergraduate degree is estimated to be worth £280,000 for men and £190,000 for women, and there is a direct gain to the exchequer of around £110,000 per UG student for men and £30,000 per UG student for women).
That being said, there is clear financial challenge within the sector, and some lateral thinking is required to address the challenge. The VC and Chair of the Board of SOAS have contributed a HEPI blog rethinking the financial challenge in English universities. They suggest that “the business model of English higher education is broken, that more probing questions need to be asked about it, and more imaginative and creative solutions found". Among other things, they reflect that “an honest discussion in universities on the fiscal viability of excessively small classes and unduly low staff-student ratios, 40% research time for all teaching and research contracts, and the importance of institutional differentiation” needs to be had, and that “equitable transnational learning” and education would be an extra piece of the solution puzzle, in addition to current models of TNE which serve only to improve the finances of UK universities, rather than “enabling learning that is both globally grounded and locally relevant”.
In contrast, HEPI’s Nick Hillman argues, in remarks from a joint event with the Council for the Defence of British Universities (CDBU), that “the system we have is clogged up rather than broken”, and that as “every official review we have had in recent decades has recommended something like the funding model we have... [w]hat we need is for the system to be recalibrated so that institutions and students have the resources they need to thrive and meet their potential.” I don’t think many in the sector would argue with his point, made as a governor of two UK universities, that with the upcoming (English and Welsh) fee increases being swallowed by the NI increase, and no indication whether this is a one-off rise or the start of annual rises, “long-term planning remains very hard”.
A letter to the Education Select Committee from the Permanent Secretary at the DfE mentions ‘reform’ of higher education. The letter (regarding the impact of industrial action on students and OfS and DfE responses to that), states that the DfE’s “priority over the coming months is to continue to build strong and constructive working relationships with representatives of both employers and staff, to better understand the issues facing the sector and to develop our plans for reform of higher education, which we will publish in summer 2025. We will work in partnership with the sector, the Office for Students, the Department for Science, Innovation and Technology, and UK Research and Innovation over the coming months to shape the changes to government policy that will be needed to support this reform.”
In a HEPI blog post, ‘The Office for Students needs to walk and chew gum’, ex-Universities and Science Minister, Jo Johnson, initially tells us that there’s “plenty to like about the Office for Students’ proposed new five year strategy”. However, he spends the rest of the blog providing sharp criticism of some of the OfS’ recent decisions to pause applications to the Register and for Degree Awarding Powers (DAPs) from new entrants, and to take on (and continue with) the role of quality body when the QAA was de-designated in 2023, as well as prioritising “some of the newer headline-grabbing conditions of registration it has imposed in response to ministerial whims du jour” over it’s “actual statutory duties given to it by Parliament”.
AUDE has published the 2024 Estates Management Report (EMR) (relating to 2022-23). It contains information that enables you to benchmark and look at costs such as insurance, energy, and general estates procurement. You might also notice that the report includes depreciation this year for the first time. How does/could your university use the information in the EMR, particularly in your finance department? We’d love to know, so please get in touch with Karel.
If mergers are on your mind, take a look at this Wonkhe piece which goes 'behind the scenes' of the City St George’s merger to look at the anatomy of a higher education merger, and have a listen to the ‘Job Shadowing HE’ podcast with the Registrar and Secretary of Writtle College about the merger with Anglia Ruskin.
And talking of the ‘Job Shadowing HE’ podcast, BUFDG’s Chair, Erica Conway (CFO, University of Birmingham), was the subject of the most recent episode, 'myth-busting' about the role of a university CFO, where she also talks about sector-wide issues, recruiting into the sector, learning from activities outside the sector, and, of course, BUFDG.
The FT(£) reports that “the UK government will turbocharge a strategic plan to create a British rival to Silicon Valley around Oxford and Cambridge” with support of the Oxford-Cambridge Arc (a previous Conservative initiative, shelved by the Johnson administration). Science Secretary, Peter Kyle, said “We are determined to unleash research and development as a driving force in our mission to grow the economy in every corner of the country”. No new money for the Arc was announced.
While we like to try to be upbeat in the Digest, sometimes the news is rather more downbeat. At least a further 1,200 voluntary redundancies have been announced across the sector so far this month, at Cardiff, Durham, Kent, and Newcastle, adding more to the tally that one VC predicted could total 10,000 across the sector by year end.
The Turing Scheme for 2025-26 is open, with guidance here, and Baroness Smith confirmed in the House of Lords that the Government has no plans to rejoin the Erasmus scheme.
And in case you’ve missed it on social media, Bridget Phillipson has sent a warm welcome message to international students.
Wonkhe’s DK has been examining the accounts and reviewing how hard universities are working to balance the books, with this early look at the 2023-24 financial statements; whereas the FT(£) has taken a different angle to its review of the accounts, looking at the sharp increase in severance spending in the Russell Group due to staff redundancies.
HEPI held a symposium event with the Council for the Defence of British Universities (CDBU) earlier this month exploring the topic ‘Who Pays? Exploring Fairer Funding Models for Higher Education’. Nick Hillman recaps the day here, and the webpage also includes slides from the sessions, with some interesting alternative funding ideas and suggestions.
The DfE has released the Impact Assessments for the changes to fees/funding for 2025/26. All are interesting in that they show the different policy options considered, and the reasons for accepting or rejecting each one.
The Assessment of the reduction in fees for Foundation Years in classroom based subjects states that “H E providers would likely scale back or withdraw some provision in classroom-based subjects because it is not financially viable at the lower fee level (since the lower tuition fee is not sufficient to cover the cost of teaching)” whereas “the response of students is more ambiguous” but they “think the behavioural response of students to any change in fee levels is likely to be minimal”. However, overall they “do not expect this policy to significantly reduce the number of people entering H E” as they expect prospective students to either “undertake functionally similar courses (such as AHE Diplomas) or enter directly into year 1”. Overall, the DfE expects H E provider income for these courses to fall by £154m to £239m as a result of the fee limit reduction.
In relation to the increase in the maximum fee cap for full-time courses, the DfE expects the measure to increase overall tuition fee income in the H E sector by £523m in 2025/26. However, it is not entirely clear whether any consideration has been made of the fact that not all providers may be able to charge the increased fee level immediately, depending on their terms and conditions.
A debate on amendments to the employer’s national insurance increase in the House of Lords last week saw plenty of support for including universities in an amendment to exempt certain bodies from the increase, but the response from the Financial Secretary to the Treasury, Lord Livermore, indicated that the amendments would not succeed, and indeed it appears that the amendments were withdrawn. In addition, he confirmed that “the Government do not intend to publish additional assessments” (i.e. there will be no full impact assessment) to add to the short impact ‘note’ issued in November. There are still three more dates for the committee to debate the bill, and you can follow progress here.
Remarks from Reform Scotland’s Research Director, Alison Payne, at a recent HEPI/CDBU symposium on exploring fairer funding models for H E, looked at why Scotland’s student funding system is “unfair, unsustainable, unaffordable” and needs to be replaced with a graduate contribution model. Her speech recognised that the funding system itself incentivises universities to take more students from outside Scotland, and that the ability to do that (and therefore the distribution of Scottish vs. rest of UK vs. international students) varies significantly between universities. She suggested a fee AFTER graduation, and once earning above the ‘average’ Scottish salary, could be a way to improve matters. The level of this fee could take into account the cost of courses and potential skills shortages (including in specific geographical areas).
Wonkhe has a summary and analysis of the changes to the funding body landscape in Scotland, now that the consultation has concluded, with the SFC taking on all funding responsibilities e.g. for apprenticeships and other training, from Skills Development Scotland (which will retain its careers information and guidance roles), and the Student Awards Agency Scotland taking F E student support from the SFC. The aim is for the new arrangements to be in place by autumn 2026.
Wonkhe also has news on plans for a Scottish Graduate Visa, which would give two years additional post-study work for those on the Graduate route, and be linked to a Scottish tax code and based on a requirement to live and work in Scotland. But as immigration policy is not a devolved matter, it is Westminster that will need to be convinced.
Universities Wales has published a response to the call for evidence on innovation, growth and the regions. The response to the Science, Innovation and Technology Committee’s call for evidence calls for devolved regional investment funding, new vehicles to support investment to benefit places that need it most, extensive UK-wide engagement from all actors in the innovation ecosystem, and more certainty over immigration policy, while warning against utilising England-specific structures, such as Research England, to deliver UK-wide aims.
UKRI has announced Proof of Concept funding to support the commercialisation of research to enable spinouts or social ventures, licencing or other commercialisation pathways in any discipline. Awards will range from £100k to £250k (at 80% FEC) and the total fund is £9m. The scheme requires applicants to register an intention to submit an application – intentions must be registered by 3 March. The opportunity to then submit full applications is expected to commence on 12 March.
BUFDG’s first Research Finance Forum meeting in November was very successful, with over 70 attendees, and the next meeting takes place on 25 February, so find out more and book your (free) place here.
We’re trying to gauge possible interest in running our corporation tax courses this year. Last year we ran two CT courses with Harriet Latham, now at Big for Tax. The first was in-person and was aimed at those who were new to CT in the H E sector or in need of a refresher. The second took place online just before year-end and was to help manage the year-end process. Both had very positive feedback from attendees. Have a look at this discussion for more information, but it would be really helpful to know whether or not either/both of these courses would be useful this year, and whether members are likely to have time and budget approval to book a place. Either drop Rachel an email or respond to the discussion post.
BUFDG’s regular tax publication, TaxHE, was issued last week, and included an experiment on how we prioritise the work we do on behalf of members – Julia has asked members to respond to this survey to prioritise her ‘to do list’ – her list covers a range of employment tax, global mobility, pensions, Construction Industry Scheme, and other areas. Please provide your feedback as soon as possible so we can kick off the highest priority work/projects.
And after a couple of months’ hiatus, Tax Brief is back! The high-level, quick update on higher education tax for those who need a brief overview of the latest issues, but don’t need all the detail. This month it’s a one-pager that covers: significant reliefs you may be missing out on, redundancies and guidance, international students, e-invoicing, and shared services.
Following the letter shared earlier this month regarding preparing for Central Digital Platform (CDP) on-boarding, HEPA can confirm that the on-boarding window for higher education will commence at 12pm on Monday 10 February. You can find out more about how to register, and what will be required, on the HEPA website here. The link to the CDP site will be shared by HEPA towards the end of next week.
The Cabinet Office is running three Communities of Practice events in the run-up to go-live for the new Act, including a Showcase of the Central Digital Platform, an Implementation Showcase, and a Procurement Panel Discussion. Find out more, including how to sign up, here.
UKUPC and HEPA are hosting a briefing webinar for Finance Leaders covering the Procurement Act; the session will take place at mid-day on 12 February 2025 and you can register here. A reminder that members can download and customise the HEPA slide deck aimed at communicating the Procurement Act changes to senior leaders across your organisation.
The Energy Consortium (TEC) is hosting a Midwinter Energy Market Update which will be a great opportunity to find out more about the current state of the Energy market and to ask any questions of the TEC team. You can sign up here.
BUFDG's ‘Future Finance Leaders’ research and report into the skills required for finance leaders has been completely refreshed to provide the latest guidance for aspiring finance leaders. The outputs are drawn from numerous interviews with VCs, Registrars, COOs, CFOs, Finance Directors, HR Directors, Deputy/Assistant Finance Directors, and external recruiters. As well as identifying the skills and attributes required, we also lay bare the challenges you might face when trying to develop as a senior leader, and, most importantly, the types of development activities and experience that will add value. The report and outputs can be used by all levels to form development plans, and by those wishing to develop their staff too.
We’ve launched our 2025 Audit Survey, sending the link to Deputy FDs – if your university hasn’t received the link, please let Matt know. The closing date is 21 February and the results should be published around the end of that month.
We’re running our popular ‘Demystifying Finance and Budgeting in the H E sector’ course on 5 and 12 February. It costs just £250 (+ VAT), and is undertaken using a BUFDG e-learning course, and then interactive online group training over two morning sessions. This is an excellent course for those throughout your university needing to understand how finance and budgeting works in universities, as well as governors/board members, so please do pass on this link for them to find out more and book!
We’ve got six other member events happening during February (all of which are FREE), ranging from our South West Deputy FDs’ meeting to a member discussion about online learning and tax, and a webinar about how the University of Manchester has used Easy Transfer to reduce team workload. For these, and many more events, take a look at our events calendar.
And don’t forget to book your place on BUFDG’s FREE online Finance Festival! It runs from 10-12 March and you can mix and match as many, or as few, sessions as you like.
The FT(£) reports that ministers are exploring ‘shelving stricter audit rules for private companies’ i.e. Public Interest Entities (‘PIEs’) - those with a turnover of >£750m and more than 750 staff – in order to ‘dial back regulation in a bid to boost economic growth’.
Wonkhe’s DK digs into the independent review of Data Futures. The requirement for the programme to deliver in-year reporting has remained (but will not happen before 2026-27) and programme delivery needs to improve, but there are no firm recommendations on arrangements for collections for 2024-25 and 2025-26.
David Prosser, Executive Director of Research Libraries UK, writes in Research Professional(£) about the recent decision by a number of universities not to renew their deals with Elsevier, arguing that the ‘end of big deals is a chance to build a better publishing system’. He contends that the big deals have resulted in a “less diverse and more monopolistic publishing environment, where new models struggle to thrive”. He looks at why these big deals have now failed, and what could replace them that would better serve the “values of openness, equity and being led from and centred on academia”. Jisc is set to renegotiate with Elsevier, and the other big publishers, in March.
The job of the fortnight is the Financial Services Centre Lead at the University of Cambridge. The University is looking for a senior and experienced qualified accountant to act as lead for the University's operational finance function, providing effective and professional leadership, developing and implementing strategy, and delivering outputs and services in line with the Division's mission and business objectives, and leading a team of around 100. You’ll need to have strong experience within the finance function of a large complex organisation, with a broad range of experience in financial management, including transaction processing and financial systems. Find plenty more vacancies on our Jobs page.
