BUFDG Digest - 20 November 2024

SECTOR

The sector has digested the English fees announcement over the last two weeks, and there is now a plethora of opinions and additional commentary. Firstly, clarity from the government on which organisations will and won’t be able to charge the new higher amount. Jim Dickinson at Wonkhe has pointed out there may be additional challenges to raising fees in some cases thanks to advertising standards and Consumer Law, an angle subsequently picked up in the Guardian. GuildHE has published a blog post showing how even if universities can apply the rise, money would be coming in one door, only to go out the other.  

Following the Education Secretary’s announcement, Wonkhe editor Debbie McVitty has also explored what the government might want from the sector in return, covering off the five key points of expanding access, economic growth, civic engagement, teaching standards, and efficiency and reform. She also suggests that the sector shouldn’t waste any time in getting started, sensibly adding that “having that evidence-based view of what is possible within the current funding envelope is also tactically important to manage government expectations”.

Progress on the Lifelong Learning Entitlement could feasibly impact on all five of the key points above, and in an article for HEPI, Prof Deborah Johnston, Deputy Vice Chancellor at London South Bank University (LSBU), looks at exactly what role it could play, given the recent delay and that details are still thin on the ground. On top of the obvious adaptation for providers, there are significant barriers to be overcome in terms of the redesign of the student loans system and how it fits with the new Skills and Growth levy, to name just two. Prof. Johnston argues that these will only be overcome if the government makes LLE a central part of its missions to unlock opportunity and boost economic growth.

FUNDING

The OfS has published an in-year update on the financial sustainability of the institutions it regulates, showing a significant deterioration in finances across the sector. The assessment is based on OfS’ own modelling, supported by 2023 provider data submitted in early 2024, and predicts a £3.4bn sector shortfall against forecasts, and that 72% of providers could be in deficit in 25/26. It finds UK undergraduate recruitment to be 10% below forecast, and international recruitment 23% lower, putting a big question mark over provider forecasts for a recovery from 26/27 onwards. David Kernohan has an article in Wonkhe suggesting it also puts a big question mark over the role of the regulator.

News coverage of the announcement comes from the BBC and the Guardian, among others, with the Times including an article from OfS Chief Executive Susan Lapworth, expanding on the ‘bold and transformative action’ from providers requested in the press release. There are examples of what that might look like in various other blogs and articles from the last two weeks. These include a major joint report from Jisc and KPMG on implementing shared approaches to ‘digital, data, and technology’, mentioned in a broader article on shared services in Wonkhe, for which VAT might not be the barrier it is sometimes assumed to be, a write-up on the recent Writtle / ARU merger – fascinating reading, and a HEPI blog on the steps needed for closer regional collaboration.

SCOTLAND

There’s also a major, detailed report on the financial sustainability of Scottish Universities published by the IFS this week, led by Kate Ogden. It shows how “another real-terms decline in per-student resources”, to £7,530 per Scottish undergraduate student, is just one element of a ‘perfect storm’ hitting the sector. The Scotsman summarises the report, highlighting the impact of the decline of overseas post-graduates.

Another element is the current political crisis, with an interesting Pinsent Masons blog spelling out the implications of the crisis in Scotland, should the minority SNP government fail to gain support for its Budget Bill in January. There’s a lot that would have to go wrong, but within the realm of possibility is an early election in 2025, followed by another in 2026, and even the adoption of Westminster levels of income tax.

Dr France Medaney has been appointed as the new Scottish Research Cultures Collaboration Manager (SRCCM). The wide-ranging role reports to the Scottish Funding Council (SFC), but is hosted at the University of Aberdeen, and focuses on developing the research culture across the Scottish HE sector.

Also, the Scottish Funding Council (SFC) has published its annual report and accounts for 23/24.

WALES

Global Wales has published its Annual Report for 23-24. It’s a partnership between Universities Wales, Colleges Wales, Welsh Government, British Council Wales, and HEFCW, that seeks to “increase the international profile, recruitment, and partnership opportunities for universities and colleges for the benefit of students, institutions and Wales as a nation”. The report covers the organisation’s impact over the year in its four target markets of Vietnam, India, North America, and Europe.

In related news, a blog post for HEPI explores the reasons for the sudden drop in the percentage of Welsh 18-year-olds applying to university. It finds that the cost-of-living crisis, the uneven spread of providers, and funding for Welsh HE providers might be to blame. It also suggests that greater school outreach and engagement could help turn the tide.

TAXES

In this news article, you can follow Andrea and Julia down the rabbit hole of additional government funding for certain public sector organisations, including the NHS, in order to meet the employer NIC rise in April. Schools will be protected from the 1.2% rise, but further and higher education will need to budget for the additional costs.

The Carbon Border Adjustment Mechanism (CBAM) is an import tax for certain carbon intensive products, now due to be introduced in 2027. As announced in the Budget, the proposed registration threshold has been increased to £50k, which is good news for the sector. A list of impacted commodity codes can be found here, and HEPs will need to monitor the value of relevant imports to see if you’ll need to register.

As mentioned in the Autumn Budget, from April 2026, recruitment companies will be legally responsible for PAYE/NIC deductions for any workers provided via umbrella companies. If there is no recruitment agency, i.e. an organisation engages workers directly from an umbrella company, it will fall to that organisation to ensure PAYE/NIC deductions are made. Whilst we await draft legislation and guidance, Business & Accountancy Daily has this article.

A new publication from HMRC shares the most common errors within both the public bodies and charities sector (amongst others) when considering the connected entities rules on the Apprenticeship Levy and Employment Allowance. Most notably, not being aware of the connected entities rules appear on both lists. Charities (most universities) must pay the Apprenticeship Levy if they have an annual paybill of over £3m and are also eligible to claim the Employment Allowance if employer NIC is less than £100,000 currently (to be removed from April 2025).

The Charity Tax Group (CTG) is running a free session on CT and completion of forms CT600 and CT600E, on Wednesday 20th November at 4pm, which members might find useful. You can book your complimentary attendance here.

Finally a reminder that all the latest tax and employment taxes news can be found in the most recent TaxHE newsletter.

PROCUREMENT

HEPA has been invited to attend a round-table on setting the national priorities for the new National Procurement Policy Statement (NPPS). If you have any feedback relating to the NPPS then please do get in touch with Ashley today to ensure that your views are fed directly into the discussion.

The Cabinet Office have kicked off the Central Digital Platform (CDP) Data Discovery, which is set to span the next 10 weeks. The Data Discovery provides the opportunity for users of the CDP to feed in their requirements, to help define the reporting and analytical capabilities enabled by CDP and the legislative requirements of the new Procurement Act. The team have launched an initial requirements gathering survey for Contracting Authorities, which will be followed by targeted interviews and workshops in late November and early December. You can find out more on the HEPA website, and the link to the survey is here.

In addition to this survey, the Cabinet Office team have recently published SME definitions guidance, and if you would like to represent the sector in the testing of the Procurement Review Unit (PRU) forms then please do let Ashley know – further details are available on the HEPA discussion board.

A big thank you to all members who have fed into the recent requirements gathering exercise to inform the programme for the Communities of Practice sessions which will be run exclusively for HEPA members by the Cabinet Office. This is a final call for suggestions! Please do let Ashley know what you would like these sessions to cover by the end of the week.

Rebecca Baxter has joined NEUPC as the new Managing Director of the purchasing consortium, succeeding Frank Rowell.

RESEARCH FINANCE

More than 70 BUFDG members joined new co-chairs Helen Hammond (Head of Research Finance at Nottingham) and James Allman (Head of Research Accounting, Monitoring and Claims at Cranfield University) for the first ever Research Finance Forum.

As well as 'valuable, helpful, and interesting' discussions on funders and reporting requirements, members were asked to confirm the Terms of Reference and shape the priorities of this new group. Updates from the meeting and results from the session polls can be viewed here. The next Forum will take place on Tuesday 25th February 2025, 2-3.30pm - book your place now. To quote one attendee, "the future of this group looks great".

To mark the launch of the Research Finance Forum, a new Research Finance knowledge hub has been added to the BUFDG website, including links to relevant resources and our latest elearning course on this topic, ‘Introduction to Research Finance’, which is for those new to a role in research finance or research support in a Higher Education setting, or those seeking an overview or refresher on the fundamentals of the research award cycle.

UKRI has announced a more than £500m investment to support the next generation of researchers in the form of two new schemes called doctoral landscape awards and doctoral focal awards. The awards replace the nine different schemes through which UK Research and Innovation (UKRI) currently supports doctoral training.

SUSTAINABILITY AND ESG

ShareAction recently released a report, ‘Mind the strategy gap: How disjointed climate targets are setting banks up to miss net-zero’, which acknowledges the vital role that Europe’s biggest banks have to play in financing the transition to a low carbon economy and urges ambitious, transparent and coherent climate targets. BUFDG members are invited to a webinar exploring key insights from the report on Tuesday November 26th 15.00-16.00 – register here.  

The Banking Engagement Forum, led by the University of Cambridge, has released an update to co-signatories of the Request for Proposals that was issued earlier this year. Six institutions have been named as aligning with RfP objectives, and the Forum continue to engage intensively with three additional institutions, all full-service banks. Find out more and how to get involved.

Those interested in responsible investments can join BUFDG and RINU for an insightful webinar featuring Snowball on the topic of Impact Education: Navigating the Landscape of Impact Investing for Universities on Tuesday 26 November 2024, 10-11.30am. This session will explore the critical distinctions between ESG (Environmental, Social, Governance) and impact investing, focusing on why this differentiation matters for educational institutions through real-world case studies. Ideal for finance leaders, endowment managers and those working in treasury in a Higher Education setting, this webinar will provide practical insights and tools to integrate impact investment principles into university portfolios.

Greenbank has a forthcoming webinar on the impact of the UN global plastics treaty on companies and investors. It takes place on Wednesday 11 December at midday and looks at how the new rules could help regulate global plastics use and encourage the transition to a circular economy. In related news, Greenbank has also published a report on the recent work of the Investor Coalition on Food Policy, which it helps lead.

OTHER

The Department for Education has launched a consultation on the Teachers’ Pension Scheme, seeking views on proposed amendments to the TPS Regulations, following a recommendation from the Scheme Advisory Board that employee contributions are raised by 0.3% for all members except those in the lowest earnings tier to achieve the required average yield of 9.6%. The consultation closes on 23 January.

The Home Office has published guidance providing important advice on the new corporate criminal offence of ‘failure to prevent fraud’, helping organisation ensure they are taking action to prevent fraud. Introduced last year as part of the Economic Crime and Corporate Transparency Act (ECCT), the offence is intended to hold large organisations to account if they profit from fraud.

Following the first Financial Planning and Analysis Time to Talk on this topic in October, BUFDG and HESPA are hosting another interactive session for members to share experiences and insight with finance and planning peers across other universities. Taking place online Monday 2 December 2024, 1-2pm, the discussion will be led by Charlotte Taylor, Director of Financial Planning and Analysis, University of Oxford and focus on how FP&A teams and strategic planners can work together.

AUDE has published a Legacy Buildings Guide, intended to support university leadership and estates teams in navigating how to best utilise legacy estate in the context of sustainability and emissions considerations, student expectations, financial challenges, and the ever-increasing need for estate maintenance. The report contains case studies showing the ‘art of the possible’ and discusses the key things that need to be considered throughout the retrofitting process.

The University of Cambridge is seeking an Employment and Expatriate Taxes Manager, describing a varied and challenging role where the successful candidate will have the opportunity to contribute to initiatives and enhancement projects, apply technical knowledge to practical solutions, and be supported in maintaining a true work-life balance. Deadline 1 December 2024.