BUFDG Digest - 4 December 2024

It's a bumper Digest issue with lots going on this week, and with plenty going on in the BUFDG team as well it's another team effort on the Digest this time after Matt and Joni's joint issue last time. With thanks to Joni for laying some of the groundwork for this issue last week, before Amanda took over this week to add to and finalise it.

FINANCE FESTIVAL 2025

We are pleased to announce that registration is open for the 2025 BUFDG Finance Festival – our 3-day online event covering all things H E finance and procurement. The 2025 event takes place from Monday 10 to Wednesday 12 March, and features a fantastic line-up of 28 challenging, informative, and entertaining sessions covering everything from cash to commercialisation, from finance tech to funding, and strategy to sustainability.

The festival is completely free to all those who work in a UK university. We don’t expect anyone to be there for every session or pick your sessions in advance – your single booking will let you ‘build-your-own’ conference where you can take part in the sessions of most value to you. We’re confident that every finance person at every institution will be able to find something of benefit. And the ‘Programme’ page on the festival website includes a handy ‘what should I watch?’ guide to help you make your decisions. You can book your place here, and if you have any questions or comments about the event please do get in touch with Matt. We look forward to seeing you there!

FINANCIAL SUSTAINABILITY

On Monday the OfS acknowledged the seriousness of the financial sustainability issues within the sector by announcing that, in order to “maximise the time … staff spend working closely with institutions at risk to ensure the interests of students are protected”, they will temporarily cease working on new applications for registering institutions, granting degree awarding powers, and applications for university title. In a statement that indicates a marked increase in the OfS’s level of concern over financial sustainability, Philippa Pickford, Director of Regulation at the OfS, said that while they “do not expect significant numbers of institutions to close in the immediate future, acting now allows us to intervene effectively at an early stage. Delaying this work would mean we miss a crucial window of opportunity to get ahead of a worsening financial situation for some institutions.”

Whilst this may provide a better outcome for English HEPs that are already OfS registered and already hold DAPs, what of those that aren’t/don’t (and their students)? Alex Proudfoot, Chief Executive of Independent Higher Education, argues in this heartfelt Wonkhe piece that this cannot be justified as it is the “transparent prioritisation of one set of students’ interests over another”. He questions whether the OfS can really “simply disapply their core statutory duties as determined by parliament, whenever it suits them”, and that this announcement sets a worrying precedent.

London Higher and UUK have been engaging across the political spectrum to help policy makers understand the pressures facing the sector, holding a roundtable last week with MPs from multiple parties, where they offered a clear picture of the challenges in the sector and also a focus on the necessary steps towards potential solutions. as a result, Adam Thompson MP has secured a Westminster Hall Debate on the topic of university financial sustainability tomorrow (Thursday 5 December) at 3pm. You can watch it on Parliament Live TV, or read the Hansard transcript later.

In these straitened economic times there’s a lot of talk of shared services, cost sharing, and collaboration, and KPMG has produced a piece for Wonkhe setting out why VAT doesn’t always have to be a barrier to shared services. Nevertheless, it often is, and BUFDG has been working with UUK to help frame a parliamentary question on how to improve the VAT cost sharing exemption to assist universities. And BUFDG’s Andrea and Julia have published a piece on Wonkhe reminding everyone to remember to “ask the tax question” when looking at new ways of operating, new income streams, and other ways to take the “bold and transformative action” that OfS says is required for HEPs to turn their finances around (whether that be shared services or anything else new).

There’s a really interesting consideration on the lasting impact of accepting students from another HEP after a ‘disorderly market exit’ from Randall Whittaker, Principal of Rose Bruford College, in THE. Rose Bruford accommodated all 284 of Alra’s students when Alra collapsed in April 2022. The last of these students graduated earlier this year. Rose Bruford is fee-capped so could only charge £9,250, but Alra was not and had charged £13,400. No assets from Alra were available so additional costs for new sites were incurred to cater for the extra students. While Whittaker recognises that all parties were in “uncharted territories” he felt there was an “absence of a formal mechanism to support the institution that takes the students”. It’s an interesting read that could hopefully help inform how to do this better in future if needed (and where there could be considerably more students involved).

The VC and Chief of Staff of UEA have written a blog post for HEPI setting out the case for a financially secure H E sector. They explain the actions UEA has taken to date to try to secure its financial future, including a portfolio review which saw a 20% reduction in courses, other significant non-pay savings (including reduced investment in research), focusing on statutory or regulatory compliance for maintenance to the physical estate, reducing travel costs, and of course major staffing cuts (as the biggest expenditure line for all HEPs). Speaking of the sector as a whole they say “All institutions are looking at efficiencies and cost savings and there are just two kinds of institutions – those that are doing this publicly and those that are doing it out of the public eye”. This could lead to 10,000 job losses nationwide in this academic year. And with course portfolio review becoming a more regular process to respond to income fluctuations, they also raise the concern about cold spots for key courses, particularly in regions like East Anglia where there are few HEPs. (An issue also covered by this Wonkhe piece looking at cold spots for SHAPE subjects, based on this new British Academy interactive map of the cold spots – good luck to anyone hoping to study Anthropology in the North West). Overall, it’s a bleak picture which they argue requires “imminent action from the Government” to provide not only additional funding, but also “stability through the next parliament, and support for the transformation that is in the interests of students, taxpayers and, yes, universities”.

Alistair Jarvis, Pro Vice Chancellor (Partnerships and Governance) at the University of London, has written this opinion piece on the idea of an H E transformation fund for Wonkhe.

SECTOR

The Office of National Statistics (ONS) has amended its forward workplan to delay the review of the classification of universities, in all UK nations, again. These reviews will now take place ‘during 2025’.

Three universities have been put on student visa ‘action plans’ by the Home Office. According to THE, the University of Central Lancashire, De Montfort University, and Nottingham Trent University have been placed on the ‘action plans’, which is an unusual step and potentially a significant concern, as Nick Hillman of HEPI comments “International students are the oil that keeps our system going…they lubricate everything else that goes on.”

Representatives from the DfE attended HESPA’s recent H E Data Insight Group meeting to talk about the Lifelong Learning Entitlement (LLE). While DfE is very much on the policy side and the Student Loans Company (SLC) on the systems and implementation side, it is still worth sharing these notes that HESPA produced from the meeting. Unfortunately the SLC could not attend the meeting, but BUFDG and HESPA will be working to engage with them more and more in the coming months. As a reminder, the LLE will affect ALL HEPs, whether or not you plan to operate modular courses, as it will replace the existing system of funding ALL students from England. And the implementation date has been delayed to January 2027 (with students applying for funding in September 2026).

HEPI has produced a report with Instructure looking at how the LLE and the Growth and Skills Levy could and should be integrated (15 pages). The report provides a detailed analysis of these policies, addressing how they could be implemented to reflect the new Labour Government’s priorities. The key findings of the report are: the LLE and the Growth and Skills Levy risk being implemented as two stand-alone policies so urgent consideration is needed on how these two policies will overlap and interact; the policies span the H E and F E sectors so understanding the intertwining nature of these sectors is essential to the successful implementation of these policies; existing regulatory metrics, particularly continuation and progression, will impede provision at the modular level and therefore new measures for evaluating modular outcomes are needed. The report goes on to make four recommendations to address these findings.

On a related note, this FT (£) piece notes that Skills England will no longer be an independent body “with powers to bestride Whitehall departments and drive (sorely lacking) business investment in skills” but an executive agency within DfE “with a boss appointed at the relatively lowly level of director in the civil service, with no statutory powers to consult employers”. The title refers to the “shrinking vision of Skills England”. The FT refers to Professor Andy Westwood talking about the case for “creating a ‘strategic brain’” for a better UK skills system, to ‘influence the needs and behaviours of employers and individuals — in choices, investment and the utilisation of any skills’” but that it “’can’t just be the brain — it will need to have some brawn too’” meaning it will need to have “levers over ‘funding, regulation and strategic interventions’ to enable it to yoke together policy across multiple Whitehall departments including business, net zero, housing — and, of course, Treasury” and the FT argues that an executive agency (“a piddly thing within DfE”) will not be able to do that.

DfE has added guidance on tuition fees for foundation years to its policy papers on the tuition fees for 2025-26. But THE posits that the reduced fee-cap for foundation year courses “may force English universities to abandon them entirely” as they will become (even more?) loss-making. A number of HEPs such as Birkbeck, University of London and the University of Staffordshire have committed to continuing them, recognising the additional loss, while others are considering their options.

Government has published its ‘Get Britain Working’ White Paper which sets out their “proposals to reform employment, health and skills support to tackle economic inactivity and support people into good work.” DK has a thought piece on Wonkhe relating to the proposals in the white paper to rationalise the different national careers services into a single body. He questions how careers services within the education sector, including university careers services, will fit into this, as well as how to include the needs of employers in the decisions about next steps made by those leaving school/education.

It looks like the Government spending review will be delayed, with the FT (£) reporting the spending review will be pushed back to June 2025, and the Guardian concurs, though it states that “Government officials denied that the review had been delayed, saying they had always been aiming to publish it between May and July. A government spokesperson said: ‘At the budget, the chancellor confirmed that the second phase of the spending review would conclude in late spring – we are still on track to deliver this.’” (We must have missed the announcement where the Government amended the seasons so that summer starts after July!)

The Student Loans Company (SLC) has released its 2024–25 business plan in which the CEO, Chris Latimer, states that the SLC will “aim to maintain existing levels of service” but that it “will not be able to improve academic cycle performance this year due to the financial climate and our funding levels”. It also plans to “develop a transformational business case to enable SLC to create greater value, efficiency and sustainability”. The SLC has also released new data on fee and maintenance loans (England) for 2023-24 with early in-year figures for 2024-25, as well as statistics for Wales and Northern Ireland. Wonkhe examines it all, finding some unusual trends in the postgraduate data.

Last week’s Wonkhe Friday Review noted that web platform provider Contensis reports that UK universities are spending an average of almost £95,000 on their ‘digital estates’, but there are some large variations between institutions, with two universities spent more than £1m, and 35 reported less than £50,000 in expenditure. The report is based on 76 FOI responses regarding university spending on content management systems, digital experience platforms, and web hosting services for the 2022–23 financial year. The variation may be due, at least in part, to heavier upfront spending followed by lower cost rolling contracts in subsequent years.

DfE has published 2024 UK education and training statistics, showing that the total number of students in higher education in 22/23 was 3.03 million and the most popular subject studied was Business and Management which accounted for 20% of all students enrolled.

DfE has also published the latest 2023-24 apprenticeships data for England, showing that while there has been rapid growth in higher/degree-level (undergraduate and masters/levels 6 and 7) apprenticeships since 2017/18 (more than quadrupling at level 6 from 6,400 in 2017/18 to 26,300 in 2023/24, and increasing more than fivefold at level 7 in that period from 4,500 to 23,900), the “rate of increase has slowed over the past two years”, showing signs of levelling off. (Higher level apprenticeships information can be found in the ‘Recent trends in levels, subjects and standards’ section).

SCOTLAND

Universities Scotland has taken the “unprecedented step” of increasing its 2025-26 budget ask of the Scottish Government, due to the UK Government’s employer’s NI increase estimated to cost the Scottish H E sector an additional £45m and the increase in tuition fees in England. Universities Scotland has now asked for an additional 3% real terms uplift (using GDP deflator at 2.39%) to the SFC Resource Budget and in changes in relation to a revision to the GDP deflator, meaning a request for an additional £49m.

The Institute of Fiscal studies took another deep dive into the funding position in Scotland, explaining that though the increased funding available has improved the outlook, tough decisions remain for the Scottish Government.

Universities Scotland issued a response to the UK Government’s October publication ‘Invest 2035: the UK’s Modern Industrial Strategy’, highlighting the alignment between Scottish universities’ strengths and the eight growth-driving sectors identified in the Green Paper. The response advocates for close collaboration in delivering tailored programmes to support regions, more public investment to support research, infrastructure and commercialisation, and a role for universities in developing sector growth plans and on the governing Industrial Strategy Council.

THE reports that Universities Scotland has raised concerns over Scottish universities’ ability to win research funding if new legislation is passed to create more combined local authorities in England with potential funding responsibilities. Lesley Jackson, director of policy at Universities Scotland, raised the concerns at UUK’s conference on research yesterday, saying that there was “a risk that Scotland would be treated as an “single entity”, putting its universities at a disadvantage to English institutions which could apply with the backing of their combined authority”, but that it should not be treated as a single block as it has “very different centres of research excellence in Dundee, Glasgow and Edinburgh, as well as the Highlands and Islands”.

The Scottish Funding Council (SFC) is seeking to appoint a new Chair to lead its board in oversight and assurance of SFC’s existing sectoral funding and quality assurance functions and will play a leading role in driving and championing change both within SFC and across the post-school education and skills landscape. Full details can be found on the Public Appointments website. The closing date for applications is 5pm on 23 December 2024.

WALES

Universities Wales has also released its response to the Westminster government’s industrial strategy consultation, championing Welsh universities’ substantial economic contributions, and critical research and innovation assets.

Universities Wales and Chairs of Universities Wales have issued a joint response to the Finance Committee of the Senedd’s call for information on Welsh Government Draft budget proposals for 2025-26, highlighting that action is required to secure a sustainable future for Welsh higher education.

Five Welsh universities recently visited universities in Germany to explore innovative approaches to research and teaching, and research collaborations. The visit highlighted “mutual interests in sustainable academic collaboration”. The visit was organised by Global Wales in partnership with the German Academic Exchange Service DAAD.

Medr has published provisional apprenticeships data for Wales in Q3 2023–24. The figures show that starts at levels 2, 3, and 4+ all fell compared to the same period in 2022–23.

FINANCIAL REPORTING

In September 2024 USS issued a letter to institutions to support preparation of financial statement disclosures, titled “FRS 102 Section 28 Post-employment Benefits: Disclosure in employers’ individual financial statements”. The Annex to the letter contained an incorrect disclosure in relation to the CPI assumption, which was inconsistent with the 2024 Universities Superannuation Scheme (USS) Annual Report and Accounts (ARA).

The correct CPI disclosure should read as follows:

The following disclosure in the Annex to the letter was therefore incorrect and should be disregarded:

USS will be writing to institutions directly in due course to advise of this correction, however in the interests of expedience the correction is also included here.

STATEMENT OF RECOMMENDED PRACTICE

The Financial Reporting Council (FRC) has issued an updated suite of factsheets on aspects of FRS 102. These follow the Periodic Review 2024 amendments to FRS 102 and other FRSs, and provide additional guidance to support stakeholder reporting in accordance with specific aspects of the new requirements.

Development of the 2026 SORP continues at pace; following an iterative review process alongside extensive stakeholder engagement across F E and H E in recent months, an exposure draft has recently been submitted to the FRC for comment along with Model Financial Statements, a consultation plan, and accompanying guidance notes on leases and revenue recognition. We anticipate that a 12-week public consultation will open in early 2025, pending approval to launch by the FRC. The SORP is expected to be published on 1 August 2025, in advance of the effective date of 1 January 2026.

A new publicly accessible BUFDG knowledge hub has been created for SORP 2026, which we will continue to populate with preparatory resources and project updates in the coming months, and host the consultation.

TAX AND PAYROLL

HMRC published their policy paper highlighting the impacts of the NIC changes from April 2025, which estimates that 250,000 employers will see their employer NIC bill reduce, 940,000 will see it increase and 820,000 will see no change.

The Department for Work and Pensions has published a useful policy paper listing the benefit and pension rates for the 2025-26 tax year, including statutory payments.

A full list of all tax related events, including the next Imports/Exports Issues Roundtable Discussion, and Employment Status and Global Mobility surgeries, can be found on our website, and all the latest Tax related updates are available in the latest edition of TaxHE.

PENSIONS

Isio is providing a Time to Talk session for CFOs/FDs at universities/HEPs with open, closed, or legacy SATs (Self-Administered Pension Trusts), to discuss an idea that may help maximise resources and save money. We have contacted the CFOs/FDs at the HEPs we think this affects, but if your HEP has a SAT and you haven’t seen the email, get in touch with Amanda. (NB: the session is aimed at CFOs/FDs).

See also the correction from USS for the FRS102 discloure in the financial statements on our discussion board, referred to in the Financial Reporting section above.

PROCUREMENT

The Greenhouse Gas Measurement and Reporting HESCET Development sub-group of the Responsible Procurement Group is pleased to release an updated version of the Higher Education Supply Chain Emissions Tool (HESCET). You can download the latest tool here (V3.11, released in November 2024) and review the accompanying notes here.  A big thank you to members from across the sector once again, including UKUPC colleagues, for their work on the tool.

We were delighted to host The Energy Consortium (TEC) for a fascinating Time to Talk on energy markets recently. Members can access the webinar recording and download the slides here. Thank you to colleagues at TEC for sharing their valuable insights on this topic.

The Procurement Value Survey (PVS) will launch later this month. If you have any questions about the PVS, or have recently joined the sector and will require access to the system to complete the survey, then please get in touch with Ashley.

SUSTAINABILITY

The Department for Energy Security and Net Zero announced that over 20 universities will be involved in or running projects that have secured funding from Phase 3c of the Public Sector Decarbonisation Scheme (PSDS), which awarded 244 heat decarbonisation and energy efficiency projects in total and committed more than £300million for the 2025/26 financial year.

The deadline for Phase 4 passed on Monday 25 November, and the Salix portal is now closed. Applications will now be assessed, and all successful applications will be awarded funding by approximately the end of May 2025.

The UK has some of the world’s oldest building stock and universities are no exception, with historical property playing an important role in the culture and heritage of campuses. In a recent article, Mills & Reeve examine how universities can address the challenges that decarbonisation presents in the context of heritage properties.

INVESTMENT

On 26 November BUFDG and RINU co-hosted an insightful Time to Talk with Snowball and the Impact Investing Institute on the topic of Impact Education: Navigating the Landscape of Impact Investing for Universities. The session explored the role of impact investing in driving meaningful social and environmental change, how universities can leverage these strategies to align their financial goals with their values, and practical steps for finance leaders, endowment managers and treasury managers to integrate impact investment principles into university portfolios. The discussion was recorded and can be found on the website alongside a list of useful resources. The Impact Investing Institute (III) are offering dedicated 20 minute 'simple start surgeries' to HEPs interested in starting (or progressing) their impact investigating journeys, anyone interested can contact Sophia from the III to arrange a call.

Dr Ellen Quigley, Co-director of Finance for Systemic Change, University of Cambridge, her colleague Dr Belinda Bell, and Anthony Odgers, CFO at the University, presented an update to some of the 70+ HEPs who co-signed the recent “Request for Proposals” that was issued to financial institutions. The group is pioneering an effort to develop cash products that avoid financing fossil fuel expansion. To date they have identified six institutions that meet the requirements, including four building societies with credit ratings that meet the University’s counter-party thresholds. They are continuing discussions with a further four organisations for cash deposit products. Find out more about the banking engagement forum progress here.

The Money Market Fund working group is also working hard to make some prototype products available early next year. If you would like to know more about this work Belinda and Ellen would be pleased to hear from you.

MISCELLANEOUS

The National Association of Disabled Staff Networks (NADSN) has launched the National Disability Staff Survey, which aims to collect data on staff who work in higher education and self-identify as being disabled, neurodivergent and/or living with a long-term health condition and/or chronic illness. The data collected from this survey will support the development of RIDE HIGHER* (Realising the Inclusion of Disabled Employees in Higher Education) a new framework to share best practice across the sector and drive our journey towards greater equity for disabled colleagues. Participation in this survey is voluntary and anonymous, and there will be no referencing of individual universities in the reporting of the results. The closing date is 31 January 2025.

Strengthify is excited to offer BUFDG members an exclusive opportunity to join their 2025 Discovery Workshops, designed to help higher education leaders, managers and teams harness strengths-based approaches for team productivity and strategic growth. Strengthify’s workshops have been highly rated, with over 80% of participants typically reporting that they are very or extremely valuable. They’re offering BUFDG members a 20% discount for early registration (by 16 December 2024), and exclusively limited to the first 50 places.

Peter Gray, Chief Executive of JS Group, has written for Wonkhe about what students spend hardship funds on and how providers can help, based on this JS Group report looking at the financial support provided to over 160,000 students in 2023-24.

JOB(S) OF THE FORTNIGHT

For those thinking of a new chapter in 2025, we have highlighted three roles this time around. First up is one for our research finance community; University College London is seeking a Finance and Research Administrator in their Division of Psychology and Language Sciences, where the post holder will provide financial support for research applications and be responsible for monitoring a portfolio of research grants. Be quick as the closing date is 11 December 2025.

University of Stirling is seeking a Director of Financial Planning and Strategy, who will be an adaptive leader with a knack for getting things done in this exciting new role that will play a pivotal part in driving income growth while maintaining a firm focus on service quality. The closing date is 2 January 2025.

Finally, the University of Birmingham is inviting applications for the role of Pensions Manager, who will lead and manage the Pension team, provide direction in the governance and delivery of all relevant pension schemes, identify process improvements and efficiencies, and more. The application deadline is 3 January 2025.

You can find many more jobs, or advertise vacancies in your organisation, on the BUFDG website.