BUFDG Digest - 3 July 2024

ELECTION

You don’t need us to tell you there’s a general election tomorrow, but you might want to have a quick, last look at some of the commentary around the parties’ manifestos and commitments in relation to the H E sector. Whilst the main headline is that the major parties have made little mention of higher education in their manifestos, and provided little in the way of detail, there are still plenty of sources providing analysis.

HEPI’s blog sets out a quick guide (including a comparison table) to what the parties’ manifestos mean for higher education, and also commissioned London Economics to produce some research on this – you can read HEPI’s summary here and the look at the full London Economics research here.  UUK has also looked at the manifestos on behalf of universities. Meanwhile, the Institute for Fiscal Studies (IFS) has released a report on HE sector finances and what an incoming government could do about them (with reference to our very own Guide to Accounting for Pensions in HE) - spoiler alert: they could either let the tuition fee freeze run out or increase teaching grants (or do nothing), and they should think carefully about the restrictions on international students (visas). The FT(£) covers UUK’s call on Labour to raise student fees to ‘stabilise the ship’. The Conversation also has a good summary of the current financial situation and the parties’ manifesto pledges in relation to H E.

HEPI has also published a briefing paper on higher education for the election candidates, which also serves as an excellent summary of the current situation and how we got here for anyone else who would like to learn more or check they’ve understood the key issues. It covers tuition funding across the four nations, research, student cost of living, degree apprenticeships, Lifelong Learning Entitlement, regulation, and student voters.

And if you want even more detail, there’s LOTS more election information on the IFS election webpage.

Once it’s all over, there are two useful-looking post-election events on 17 July: Wonkhe is holding a webinar on ‘What the new government means for higher education’ from 9:30am-12:30pm, and the Office for Students is holding an in-person insight event, ‘Addressing the financial challenges in higher education’, from 1:30-5:00pm in London.

FINANCIAL SUSTAINABILITY

It may be too late for the manifestos and the election, but the H E funding crisis has reached the mainstream media with an excellent BBC article pointing out how universities are key to ‘levelling up’, and examining who would really lose out if an HEP went bust – it would be the most disadvantaged students, and areas where a university is a key employer and economic anchor. 

Wonkhe’s Jim Dickinson sets out why a possible Labour government might struggle to allow English tuition fees to rise when the fee freeze runs out at the end of 2024/25 – or perhaps Rachel Reeves will Let It Go?

FUNDING AND SECTOR

The OfS has published the 2022-23 Annual TRAC Report on behalf of UKRI, the SFC, HEFCW, and the Department for the Economy (Northern Ireland). It shows a sector aggregate deficit of £2,767 million for higher education institutions in England and Northern Ireland, with 93.7% of TRAC full economic costs recovered, compared to a deficit of £1,926 million and a recovery of 95.2% in 2021-22. In 2022-23, total TRAC income increased to £40,887 million, an increase of 7.4% / £2,815 million. The full economic costs of all activities increased by £3,656 million to £43,654 million (a 9.1% increase).

What does the public value more than the UK legal system, the BBC, the UK government and several other public services, but less than the Royal family, the NHS, and the armed forces? According to some research into the public’s perception of universities by King’s College Policy Unit , the answer is universities. The research concludes that universities generate high esteem but are low priority. And whilst none of the main parties have decided to make higher education a ‘doorstep issue’, it seems that the public really does like universities, though not as much as they used to, and it won’t affect how they vote, according to Wonkhe’s coverage of the research. 68% of those polled would be concerned by mass university closures, and 61% would blame the government for that. The research is also reported in The Guardian. Interestingly, neither the combative government rhetoric nor the sector’s own communications about the financial situation seem to have got through to the public.

In case anyone hasn’t picked it up yet, the Office for National Statistics amended its forward work plan in March to delay the reclassification of universities (again). This is now scheduled to be reviewed in July-September 2024 (Scotland), October-December 2024 (Wales and Northern Ireland), and ‘during 2025’ (England).

FINANCIAL REPORTING

Work on the new SORP is underway, with members of the Technical Working Group taking part in a KPMG workshop yesterday to dissect the impact of the changes on the sector. Following a second workshop later this month, drafting will get underway in earnest and continue ahead of initial approvals by the SORP Board and FRC in November/December 2024, and the public consultation period from January to March 2025. The incoming SORP will be effective from 1 January 2026.

SCOTLAND

MSPs have questioned why the Scottish government’s approach to replacing the Erasmus student exchange scheme is ‘so much slower than their counterparts in Wales’.

WALES

HEFCW has published the details of the basis on which Capital Funding will be allocated in 2024-25. £10 million Capital funding will be available in 2024-25. Responsibility for payment, monitoring and any clawback of funds will pass to Medr, The Commission for Tertiary Education and Research, but HEFCW does not expect it to be impacted by the transition to Medr.

SUSTAINABILITY

One year on from launching Cost of Net Zero Calculator tool, together with ‘The Cost of Net Zero’ report, with AUDE and EAUC, we are inviting members to provide feedback to inform plans in this area. The tool and report were created with the aim of helping the sector understand the context, the scale, and the nature of the task, and provide high-level cost estimations for a proposed transition to net zero based on selected targets and scenarios.

If you have engaged with the calculator, we invite you to share your thoughts via a short survey which should require only a few minutes of your time and will help us shape our ongoing support for members in this area. In a webinar on Thursday 26 September, delivery partners Energise will explain what has been implemented as a result of the release of the latest Future Energy Scenarios, and how this may impact figures for existing users. BUFDG, AUDE and EAUC will share data on sector engagement with the calculator, highlights from the review survey, and how this information has informed future plans for this tool. This will also be the final ‘surgery’ with Energise, for those using the calculator to seek direct technical support before the end of the maintenance contract.

TAX AND PAYROLL

BUFDG has been working with Jisc, SCONUL, UUK, RLUK and other sector bodies, charitable funders, the British Academy, and the Publishers Association regarding the issue of VAT on open access publishing. With open access arrangements and ‘pay to publish’ models increasing over ‘pay to read’ models, irrecoverable VAT has been increasing with them. Unfortunately, HM Treasury’s letter confirms their stance that standard rated VAT should be charged on this service, though we will revisit the issue with Jisc should there be a change of government. Jisc has provided a useful update on the issue.

Vialto Partners recently updated their high level guide for BUFDG members on the tax and social security implications of membership of a UK registered pension scheme (typically USS) in the host country. The update is now combined with the information for Ireland which was added as new country on the grid this year.

PENSIONS

Having swiftly removed this year’s USS modeller a day after releasing it, we will update the Pensions discussion board and the Financial Reporting discussion board as soon as the revised version is available. We are currently waiting for USS to confirm the changes to it and have asked two universities (who spotted the error in the original version) to test it for us on some live data before we release the revised version.

PROCUREMENT

We are delighted to announce that Amy Noble, Director of Procurement at the University of Liverpool, has been appointed as the new Deputy Chair of HEPA; Amy succeeds Veronica Daly, Chief Procurement and Contracts Officer at King’s College London, in the role. You can find out more about Amy and the role on the HEPA website.

Bookings are now open for the next set of Cabinet Office Transforming Public Procurement Communities of Practice meetings, including a hotly anticipated update on the Central Digital Platform tomorrow, followed by sessions covering preliminary market engagement and conflicts of interest. You can find out more and secure your place through the links on the HEPA website here.

The Cabinet Office published a further batch of guidance documents yesterday relating to the Procurement Act 2023, including guidance on competitive tendering procedures. The publication process will continue as go-live approaches in October 2024, so do keep an eye out for further releases over the coming months. 

INVESTMENT

Whilst many universities have set a net zero target, only a small proportion currently include their investments in that target. To help universities align their investment strategy with their climate ambitions, we have worked in partnership with Cazenove Capital to publish ‘Net zero investments: a guide for universities’, a report drawing on findings from university survey responses, focus groups, and case studies, to share useful data and insights, practical and applicable guidance, and five key steps to consider when setting a net zero investment strategy. The report will be useful to any university looking to decarbonise their investment portfolios and use their funds for good.

Cazenove is holding a webinar with BUFDG to discuss the report’s findings, tomorrow (4 July) so book your place now!

RESEARCH FINANCE

Following feedback from the 2023 BUFDG organisational review and last June’s inaugural Research Finance Forum, both of which demonstrated the appetite for more support in this area, we are pleased to announce that BUFDG will be starting regular meetings for the Research Finance community for the 24/25 academic year and beyond. To ensure this activity is member-led, we are seeking research finance professionals with knowledge and experience of the issues affecting the sector to act as chair and deputy chair (or co-chairs). To find out more about this opportunity, and how it can help you and your colleagues, find further information here.

ADVOCACY AND COLLABORATION

Karel attended a KPMG and Wonkhe ‘Ignition’ event yesterday, along with individuals from universities and other sector bodies, to look at efficiency through collaboration. The workshop approach was designed to be highly interactive to bring together different thinking and accelerate progress to agreed outcomes, and to focus on medium to longer term structural approaches to efficiency. The goal was to collectively, pragmatically, and creatively approach actionable strategies that can support long term financial sustainability. 

Joni was at the University of Winchester last week for the EAUC Annual Conference (the Alliance for Sustainability Leadership in Education). As well as celebrating EAUC’s 20th anniversary, the event marked the launch of the new EAUC strategy, outlining the organisation’s goals for the next six years. Having helped bring the Cost of Net Zero Calculator tool to EAUC, AUDE, and BUFDG members, it was a great opportunity for Joni to meet members of the H E sustainability community ‘in real life’, as well as participating in conference sessions on costing net zero, embedding sustainability in research, and using the sector’s money and reputation to influence banks to decarbonise.

EVENTS AND JOBS

We’re running a two-part ‘Year-end Corporation Tax Workings’ online course on 10 and 18 July to help give you confidence in preparing your year-end corporation tax workings for your statutory accounts. The first session will cover current tax reporting for both the university and subsidiary companies. The second session will cover deferred tax accounting. You’ll also receive the slide deck and an Excel template which you could use to build or enhance your own working schedules. The course costs £100 (plus VAT) and delegates will also receive access to recordings of the sessions. Book your place here!

The TRAC Practitioners Conference will be taking place online on 24-25 September. The conference will include a mixture of plenary and breakout sessions and give delegates a thorough overview on the work of the TRAC Development Group, their activities, and the latest guidance on TRAC. Tickets cost £75 (plus VAT). You can book your place here.

Find out about other events on our Events Calendar.

Job of the Fortnight is the Director of Finance and Strategic Planning at Leeds Trinity University. The University provides a transformational educational experience and pioneered the inclusion of professional work placements into every undergraduate degree programme. It works with thousands of businesses annually to offer students degree-relevant industry experience and is committed to delivering outstanding teaching led by research, scholarship and practice. The new Director of Finance and Strategic Planning will join the University Executive and Senior Management team and report directly to the Vice-Chancellor. The postholder will take the lead in providing outstanding commercial and financial leadership across the institution; sharing collective responsibility for the achievement of strategic priorities and associated delivery plans. The University is looking for someone with significant leadership experience gained at a senior level in an organisation of comparable scale and complexity, and a strong commercial and business focus underpinned by a proven ability to operate effectively within rapidly changing policy landscapes. Find out more here, and view other jobs on the BUFDG Jobs page.