27 September 2023 
Amanda Darley, Head of Operations and Engagement
REGULATION / FUNDING
If anyone has not yet had the chance to catch up with the report from the House of Lords Select Committee inquiry into the work of the OfS, the report itself has an excellent five-page summary, and DK's summary of the report on Wonkhe is also a useful tour covering each section of the report, which seems critical of the OfS in every aspect covered. (The House of Lords website also offers a summary of the report, broken down by section).
The OfS has provided an initial response, including that it has already ‘taken proactive steps to address many of the issues the committee has raised’. OfS Chief Executive, Susan Lapworth’s, lengthier response in Research Professional News, acknowledges that the report contained some ‘forthright criticisms’ and confirms that the OfS will ‘embrace the report as a learning tool for the next phase of … development as a regulator rather than see it as an attack against which to defend’ themselves, and that the OfS will continue to focus on the work it has already started to engage more with institutions and to deepen their understanding of ‘the sector’s diversity and complexity’. However, she disagrees with the report’s conclusion that the OfS is not sufficiently aware of the financial risks facing the sector, as despite most recently assessing the aggregate financial health of the sector as being ‘in good financial shape’ (May 2023), the OfS analysis also goes on to say that there are significant differences between providers and if the identified financial risks (the fixed undergraduate tuition fee, cost pressures, and an overreliance in some HEPs on international students) continue or increase, there could be a material impact on the financial sustainability of individual HEPs.
With the LLE (back to being called the Lifelong Learning Entitlement) becoming law last week, should universities consider using it as an opportunity to encourage more school-leavers to 'try before they buy' (or at least before they buy a full three-year course)? A HEPI blog-post poses just this question, in the light of a disappointing round of applications this summer, suggesting encouraging more sixth-formers to consider the university option by starting with a one-year course such as an HNC that would lead to more options (continue, move to another HEP, change course, take some time working then come back etc.). The DfE has also published an information request on their modelling for the LLE and is looking for feedback from HE and FE providers on various questions including 'What are providers' expected benefits, costs, or challenges from the changes brought by the LLE?' and 'In particular for the changed [sic] related to flexible and modular provision, what are providers’ expected benefits, costs or challenges?' And for anyone in need of a refresher on what it is seeking to achieve, the DfE has recently published an overview of the LLE here.
SUSTAINABILITY / ENERGY
There’s an interesting blog on HEPI discussing international student mobility (ISM), and the impact of student travel on university carbon net-zero targets. In it, Dr David McCollum, Senior Lecturer in the School of Geography and Sustainable Development, University of St Andrews, asks whether ISM is the ‘elephant in the room’ when it comes to sustainability in the sector, and suggests that Higher Education needs to do more work to understand the size and complexity of the issue, arguing that the ‘carbon generated by ISM is likely to be considerable but has been the subject of surprisingly little empirical scrutiny or policy discussion’. While recognising that the 'fiscal wellbeing of Higher Education (HE) is increasingly dependent on the recruitment of international students', he comments that this ‘situation matters because it risks undermining the commendable steps taken by the sector to promote environmental sustainability’.
Another thought-provoking blog on universities' net zero efforts, by Nick Hillman on the HEPI website, asks whether universities should water down their net zero targets (like the Government recently did) or redouble their efforts. He states that it is 'remarkably easy to make bold long-term commitments, like .... delivering net zero, when the target date is years away. But if you amble on the way, then at some point on the journey you either have to accept that the destination remains out of reach on your original timeframe or a dramatic change of speed is needed.' He cites examples of the fantastic emissions reductions during Covid, and examples of the depressing lack of progress since. And of course there is mention of the huge associated cost, and the fact that either 'the cash is not there, given the underfunding of much university activity, or there are other even more pressing priorities than staying on course for a net zero target that might still be a decade or so away'. In summary he asks 'perhaps the time has come to admit such goals are unachievable using current policies and either to alter the target date or to transform the programme of action to deliver them – or both?' and provides a postscript summarising scope 1, 2 and 3 emissions that ties in with Dr David McCollum's blog by declaring that 'a net zero target which ignores the travel arrangements of the 600,000+ international students who come to the UK to study is, arguably, not worth very much'.
There’s also a reflection in the FT (£) on the efforts of the food group Mars to meet its own CNZ targets – universities are certainly not alone. The article reveals an interesting move by Mars – that for the past year, 20% of the Mars senior executive long-term incentive plan has been tied to success in reducing its greenhouse gas emissions, rather than simply to financial performance. The article also states that the biggest challenge for Mars ‘…is reducing Scope 3 emissions — the greenhouse gases emitted all along their supply chains and as their goods are consumed — which make up the largest chunk of the company’s total footprint’. The recent AUDE/BUDFG/EAUC report estimates the cost of decarbonising the H E supply chain is over £25bn, to be achieved by suppliers reducing their scope 1 and 2 emissions (so that we can reduce our scope 3 emissions). Best get started!
A great place to start is to attend the BUFDG webinar tomorrow (28 September) on using the Calculating the Cost of Net Zero tool recently launched alongside the AUDE/BUDFG/EAUC Cost of Net Zero report. You can book your place on the webinar here.
In related news, the DfE has updated its guidance on sustainability and climate action plans. The update itself is minor, but it’s a reminder, or even news, that guidance does in fact exist. The initial obligations are not onerous – just that a university (or any other education setting) should have a clear sustainability lead (a group or individual), as well as a ‘climate action plan’ in place by 2025. But there is the promise of more on the way, including a new resource hub by the end of the year.
As we head into the winter trading period, join TEC on the 3 October at 10-11am for their latest energy market summary webinar. This session is ideal for those wanting to better understand what's driving energy prices right now and this winter’s key energy market fundamentals. You can register for the meeting here. The webinar will be recorded and there will be an opportunity to ask questions.
The 2023 TEC Conference will be held at Conference Aston in Birmingham on 9 November. This is an all-day event and is free of charge to TEC Members. The programme will provide insight from a variety of subject matter experts from across the HE sector and the energy industry, covering the latest market outlook as well as the challenge of delivering Net Zero carbon targets, among other topics. Click here for more information and to register.
VALUE
Back in 2016, BUFDG undertook two projects looking at how universities communicate the breadth of their value in their Annual Reports, using an abridged version of the Integrated Reporting <IR> framework. In 2017 the baton was passed to Advance HE who undertook a project to bring together entire leadership teams (not just finance) at 10 HEIs, to embed integrated thinking and IR across the whole institution. Advance HE have recently initiated further work on the challenges and requirements for reporting impact and value, and why this is crucial for universities, particularly in the midst of the environmental crisis. An update on this work is available on Advance HE's website, as well as a report, aimed at leadership teams in the sector, written by Phil McNaull, Strategic Finance Consultant, Executive Coach and former Finance Director at the University of Edinburgh.
PROCUREMENT
It’s survey-tastic at HEPA! The Heads of Procurement survey is now open – if you’re a Head of Procurement but haven’t received a link, please get in touch. The results are in from the HEPA survey on contracting authority status, net zero scope 3 targets, and procurement thresholds and you can read the report here, and the purchasing card survey report is here.
Ash has provided an update on the learning and development for the new Public Procurement rules, including confirming that the 'Knowledge Drops' (on-demand video resources providing an overview of all of the changes for everyone who needs a general awareness of the new rules) are on track to be released in early November.
TAX AND PAYROLL
The first of the new Employment Tax and Employment Status surgeries were held earlier this month. The topics of volunteers, research participants, vouchers, and payments were discussed at the Employment Tax surgery, and the topics of status software and specific roles were discussed at the Employment Status surgery – you can find notes from both surgeries here.
The latest TaxHE is available with a round-up of all the BUFDG tax news from the past couple of weeks, as well as information on a long list of tax events between now and May 2024.
PENSIONS
In case you haven’t already found it, here’s a link to the guidance from Vialto on the tax and social security implications of membership of USS for staff living overseas. The original guide dealt with the ten most commonly requested countries, and this update discusses arrangements for obtaining information on more countries.
BUFDG EVENTS
As well as the many tax events listed in the latest TaxHE, there are numerous other BUFDG events coming up, including:
among many more that you can find on our Events page or calendar.
And don’t forget that you can find recordings of all BUFDG free webinars here. Notable recent webinars include the fascinating Time to Talk sessions from Lloyds Bank on Responsible Business, looking at leading with purpose and creating an inclusive society (if any viewers want to follow up to explore collaborating with Lloyds to help students/graduates access the Black Entrepreneurs Programme then please contact David Hall at Lloyds); and the session from KPMG about the revised ISA 240 audit regulation and changes to the counter-fraud regulatory landscape.
SECTOR
UK Research and Innovation (UKRI) has published a report outlining plans to improve support for postgraduate students. This includes a commitment to work with the Government and BUFDG to better understand the impact of tax legislation and guidance and seek to remove barriers to part-time PGR study. BUFDG's 2022 guidance on stipends and bursaries sets out the general rules on the taxation of stipends, HMRC's current position, and where complexities arise. And Wonkhe has some thoughts on UKRI's proposed 'new deal' in general.
GENERAL
Things are not looking rosy in the economy, with KPMG’s Economic Outlook report for September predicting that the ‘UK economy could struggle to keep its head above water in the second half of 2023’ with forecasts showing real GDP growth slowing to just 0.4% in 2023 and 0.3% in 2024, and inflation possibly only returning to its 2% target in late 2024.
JOB(S) OF THE FORTHNIGHT
Our Job(s) of the Fortnight are at the University of Stirling, which is looking for both a Risk Manager and a Treasury Manager for their fantastic finance team. The former role will cover areas including insurance management, business continuity planning, due diligence, counter-fraud, compliance monitoring, and data analysis. The successful candidate for the Treasury Manager role will 'provide leadership and line management to the treasury team and assume responsibility for the full range of treasury management tasks, including covenant compliance, pro-active forecasting, and expert advice on enhancing operational funds and investment opportunities'. The deadline for both roles is 22 October. As usual there are lots of other vacancies listed on the BUFDG Jobs page.
