BUFDG Digest 24 May

FUNDING / SECTOR

On Tuesday 16 May, HEPI, Universities UK International (UUKi) and Kaplan International Pathways published research on the costs and benefits of international students. The figures found that the economic benefit of international students to the UK economy was £41.9bn in 21/22, up from £31.3bn three years prior. And in a much simpler metric, that every 11 non-EU students generate £1m of net economic impact.

In related news, the Government has announced that it will aim to limit rising immigration by barring post-graduate students from bringing dependents with them to the UK. There’s coverage in the BBC here, and Jim Dickinson also discusses the issue in Wonkhe.

UKRI has published an update to its review of the Knowledge Exchange Framework and associated funding, including HE-BCI metrics. The documentation includes an implementation plan for developing the changes over the next few years.

As usual, there are quite a few interesting articles around the sector, including what a ‘mixed economy’ model for HE funding might look like, what the most electorally-successful funding policy might be for Labour, the likelihood of changes to free HE in Scotland, and an alternative regulatory framework (part 1 and part 2).

COUNTER-FRAUD

Fraud remains a significant threat to the financial health of institutions, and it is essential to maintain a robust framework for preventing and detecting fraudulent activity.  As such, the government has this month released its Fraud Strategy.  The policy paper sets out plans to stop fraud at source and pursue those responsible wherever they are in the world, aiming to reduce fraud by 10% on 2019 levels by 2025.  Interestingly the paper also points towards the replacement of Action Fraud with a state-of-the-art system for victims to report fraud and cyber crimes to the police.

You may have joined Barclay’s Managing the risks of financial crime in the education sector webinar last month (recording available in link). The session is excellent, and well worth catching up on; during the webinar you can hear from Barclays Global Fraud Management, Financial Crime and Digital Eagles teams and also Dr Harding, a criminologist at Lancaster University who shared research on student vulnerabilities to becoming money mules.  The slides can be downloaded here. HMRC have also commenced a student mule awareness campaign; the resources shared with BUFDG include a flyer which can be provided to students and are also available to download.

In its Charity Fraud Report, BDO noted a shift towards insider threats in recent years. In this article, Kaley Crossthwaite, Partner, Forensic Accounting and Valuation Services, highlights the insider threat and the impact of two recent developments on fraud in this space – the cost of living crisis as well as hybrid working.  Kaley offers six excellent tips on how to tackle insider threats, including a focus on good recruitment.

For more counter-fraud news, please read the new Counter-Fraud Digest.

TAXES

On 27 April, HMRC issued a raft of consultations as part of its Tax Maintenance and Administration day. Quite a few of these are important for the sector. Julia and Andrea are working on responses and would appreciate input from members. You can find out further information, and how to make your contributions, in this News Article.

One of the consultations concerns Off-payroll working (IR35) - calculation of PAYE liability in cases of non-compliance. This relates to individuals who provide their services through an intermediary of which they are typically the owner/director (with more than 5% of the share capital). Currently, if an arrangement is treated as self-employed but, after (typically HMRC) review, is found to be employed/within scope of the IR35 rules, any tax the intermediary has paid on the income could not be taken into account when calculating the taxes due to HMRC by the deemed employer. New proposals will allow for Corporation Tax, income tax and employee NIC paid by the intermediary to be offset against the tax and employee NIC duties for the deemed employer. Julia will be drafting a response on behalf of BUFDG members for this one so, if you would like to be involved in reviewing the draft response, please let her know.

The Department of Business & Trade has proposed to reduce Working Time Regulations reporting burdens by allowing rolled-up holiday pay “so that workers can receive their holiday pay with every payslip” (see this article from Rebecca Seeley Harris for more information), which will be a welcomed relief for many universities. The government then issued the consultation Retained EU employment law reforms on 12 May with Proposal 2 setting out reforms of rolled up holiday pay stating that "We propose that rolled-up holiday pay should be paid at 12.07% of a worker's pay on each payslip". We will therefore be asking for your input into this consultation, to the extent it covers rolled-up holiday pay.

If you have been following this discussion board, you'll know that we recently commissioned Vialto Partners to produce a high-level guidance document setting out the typical tax and social security treatment of membership to a UK registered pension (i.e. the USS) in 10 countries (chosen by the masses - or the BUFDG membership I should say) which are: Australia, Belgium, China, France, Germany, India, Italy, Netherlands, Switzerland, and USA. The guidance is now finalised and you can access the document here. Please note that the purpose of this document is to provide an indication of whether there are high risk tax and/or social security implications of providing USS to members who are attending the countries above. This is not a replacement for specific advice but should give you a good understanding of what to expect and, therefore, where to allocate your time/budget to.

Finally, the EU is due to launch a Carbon Border Adjustment Mechanism (think VAT but for carbon…), that will begin to operate from October. The first stage will just be data monitoring and reporting, with no substantive tax impacts expected until much later in the decade. The UK government is currently considering its own separate scheme. You can contribute to the discussion in this post.

PROCUREMENT

Changes have been made to the Public Contracts Regulations 2015 (PCR) which will come into effect on Thursday 25 May. These changes have been introduced following the signature of two free-trade agreements with Australia and New Zealand. The changes are made under The Public Procurement (International Trade Agreements) (Amendment) Regulations 2023, the changes do not apply to devolved Welsh authorities. Read the full article on the HEPA website for more detail. The Cabinet Office will issue a Procurement Policy Note (PPN) next week, which will share with you.

HEPA has launched a survey to help them better understand the current landscape of the HE sector in terms of Contracting Authority status, procurement thresholds and net zero scope 3 targets. The survey will take no more than a few minutes to complete and it can be submitted anonymously.  The results of the survey will be compiled into a report, available to all HEPA members. If you’re a head of procurement and have not yet seen the link to complete, please contact Ashley.

In case you missed it last week, HEPA is forming a working group to review the Benefits Methodology.  The purpose of the review will be to ensure that the Benefits Methodology remains accurate, credible and continues to meet the requirements of the sector. If you have any feedback on the Benefits Methodology then please do sign-up to join the working group so we can ensure that it meets your needs - it would be wonderful to have a cross section of colleagues involved representing a broad range of Higher Education providers. To sign-up, please complete this simple form by 26 May. 

OTHER

Our PHES colleagues at CUBO are running a course on exploring HE Catering Business Models, which takes place on 7 June in Manchester. This will be of interest if you have responsible for commercial development in your institution.

There are two other PHES-wide events that will be useful to many in your teams. The first is Introduction to HE for Professional Services Staff, which is online on 28 June. The second is De-mystifying Finance and Budgeting in the HE sector (for non-accountants). This is online in two-parts, on June 6 and 13.

A briefing paper titled Assessing climate risk and strengthening resilience for UK Higher Education Institutions was recently created by the UK Universities Climate Network (UUCN) to support universities in assessing their climate risks and improving resilience. The guidance draws on the latest evidence and aims to support decision makers, senior leaders, sustainability practitioners and risk experts within HEIs to undertake this urgent work. EAUC, in partnership with the UK University Climate Network (UUCN), AUDE and BUFDG, are hosting an online webinar covering the report and its implications on Tuesday 5 September. The event is free and open to EAUC, AUDE, BUFDG & UUCN members. Click here for more information and to book your place. 

This overview webinar is followed by a three-part training series on how to develop Climate Impact Assessments. This online series is aimed at Estates and Sustainability practitioners, and is available free to EAUC, AUDE, BUFDG & UUCN members.

Universities UK has also published a briefing note, Supporting good practice in student accommodation: considerations for senior university leaders, drawing on insights and experiences of those in the sector. There is continuing demand for more accommodation in a number of towns and cities that are experiencing a shortage, although this is not the full picture as other areas have surplus accommodation. The UUK note looks at the impact of accommodation issues on students, assesses the current and future picture, provides some case studies and suggests some solutions, and looks at how to work better internally and also how to work with other organisations to help solve accommodation problems.

Our Job of the Fortnight is for a Tax and Loans Manager at the Royal College of Music. The successful candidate will “be fully or part-qualified in tax or accounting, or qualified by experience”, and “will have an awareness of different areas of tax and be experienced in the submission of tax and other returns”, among other skills. The deadline for applications is 2^nd June.

There are lots of other vacancies from across the sector listed on the BUFDG jobs page.