There seems little doubt that, thanks to the incompetent bankers, savings will have to be made in every university, including UCL. The best that can be done may be to try to ensure that the savings are made fairly, with minimum damage to UCL. How the savings are distributed within UCL is an internal matter, It is not dictated by government.
The aim of this post is to discover how savings targets were calculated for each part of UCL and the extent to which the targets are fair and sensible.
We concentrate particularly on figures for the Faculty of Life Sciences (FLS) because that faculty has been told to make greater savings than others, and because it is the only faculty to be threatened with academic redundancies.
It has proved remarkably difficult to get the necessary information to look at the question of fairness and feasibility. My letter to the Finance director, sent in January, has been followed by a long series of emails in an effort to find exactly what was done.
It turns out that the calculations are arbitrary in the extreme. Here are a few facts that (apart from the first two) we were not told.
- Cuts for HR and other central services, 5.7%
- Cuts for the Faculty of Life Sciences (FLS), 10.4%
- Average target for saving across college 5.7%
- Income per academic is higher in FLS than any other faculty (and remains so after a slight downturn in the latest figures)
- Contribution to central services from FLS, 28.3% of total income (47% of disposable income)
- Contribution to central services of clinical faculty (FBS), 16.8% of income.
- Between 1999-00 and 2008 – 09 academic staff costs in FLS rose by 53% (college average 74%)
- Between 1999-00 and 2008 – 09 administrative staff costs in FLS rose by 138% (college average 82%)
How targets were calculated
Calculations are based on keeping things as they were in 2007 – 08. The reason for this is simply that 2007 – 08 is the last year for which actual (as opposed to estimated) numbers are available. There has been no attempt to judge whether 2007 – 08 was fair or representative. The choice was totally arbitrary.
2007 – 08 (actual)
Total income for FLS was £76.665 million. Of this income £27.890 m was research direct costs, i.e grant income that goes straight in an out again. Subtraction of the latter gives an adjusted income of £48.775 m.
Total expenditure was £53.031 m. Subtracting research direct costs of £27.890 m gives adjusted expenditure of £25.141 m on FLS (approx. 88% of this is on salaries) .
The ratio of adjusted income/adjusted expenditure was 1.94. It is this number which was kept the same for the 2009 -10 budget.
2009 – 10 (budget)
Research direct costs (mostly grant income) were up to £32.307 m (up by £4.4 m).
Adjusted income was £50.474 m (up by £1.7 m).
Adjusted expenditure is £29.125 m (up by £3.98 m).
But the ratio between adjusted income/adjusted expenditure fell to 1.73. To restore this ratio to 1.94, as in 2007 – 08, an additional contribution to central services of £3 m was added so adjusted income/adjusted expenditure becomes £50.474/( £29.125m – £3m) = 1.94
This means that, in these two years, if we exclude research direct costs, FLS has brought in £26.634 m and £21.349 m (2007-8 and 2009-10, respectively) more than what it spends locally. Now the difficult bit. If FLS were a firm making widgets, we would know exactly what other costs we have to account for in order to maintain buildings, personnel administration, IT etc.
However we are a Faculty in UCL- what happens is that the difference between income and local expenditure is swept into the centre – in fact it is called a “contribution”.
For FLS. this central “contribution” is 28% of total income, whereas in the clinical faculty it is only 16.8% of total income.
For FLS it is 47% of net income excluding research direct costs, so almost half our disposable income goes to administration
Thus, FLS makes a healthy profit every year. Total income was £6.1 m greater in the 2009 -10 budget than in 2007 – 08. That includes an increase of £4.42 m in research direct costs and an increase of £0,97 m (from £4.2 m to £5.2 m) in overheads earned from grants and paid straight to central services. Despite all this, FLS is being asked to cut by 10.4% while central services has only a 5.7% cut..
FLS makes more money per academic than any other faculty
We still have not got the net income for all faculties (excluding research direct costs –mostly grants that come in and go straight out again). The adjusted income per academic was therefore calculated by taking adjusted income as total income minus number of researchers times £55k, since the average gross cost of employing a researcher is about £55k. The number of researchers comes from the published HR statistics on staff profiles. Our calculation assumes that their salaries represent most of the grant income.
This calculation shows that FLS has the highest income per academic of all faculties, and that this is still true after the slight reduction of income in the last year. Using staff numbers for 2009, and income for 2008 – 09, we find income per academic
For FLS £255k
For Maths and Physical Sciences £243k
For Arts and Humanities £110k
and
For FBS (clinical faculty) £109k
These numbers seem to suggest that FLS, far from falling behind other faculties, has been spectacularly successful.
Central services
First thing to notice is that there is has been no attempt whatsoever to calculate a fair contribution to central services. Whatever ‘profit’ a faculty makes is creamed off and allocated to them. None of it comes back to the Faculty.
The ‘central contribution’ for FLS was NOT calculated. On 3 Feb UCL’s Finance Director told me
2. The contribution of £23,634k for 2007-08 is not a calculation – it is factually what happened. FLS had an income of £76,665k and costs of £53,031k and one subtracted from the other gives the contribution.
So where does the figure of 5.7% cut for central services come from. According to out Finance Director
"The total improvement target for all the faculties added together represented 5.7% of their total costs so we used the same overall percentage for CSS Divisions."
This is the rationale for assigning cuts to departments that consume money. It is a great pity that the same reasoning was not applied to departments that make money.
All this would matter less if people were happy with their central services.
How fast have administrative costs risen
We have been told repeatedly that administrative costs have not increased much as a percentage of academic staff costs. That is roughly true of UCL has a whole. It is NOT true for the Faculty of Life Sciences. The numbers that were sent with the provost’s reply to the letter from FLS show this.
Between 1999-00 and 2008 – 09 academic staff costs in FLS rose by 53% (college average 74%)
Between 1999-00 and 2008 – 09 administrative staff costs in FLS rose by 138% (college average 82%)
(“Administrative staff” is sum of HEFCE-funded staff and Faculty & Departmental administrative and clerical staff costs, excluding the PGIs)
Summary
The Faculty of Life Sciences can fairly claim to be a more successful generator of income than any other faculty. It has had the smallest increase in the number of academics, but has been saddled with the largest increase in administration. All power has been removed from academics to influence events and we have been saddled with an incompetent and inefficient reorganisation. Then we are told we are failing and people must be fired. it is not surprising that morale is low.
Ways in which UCL might save money without cutting off the people who do research and teaching is discussed in the previous post.
David Colquhoun (with the help of several younger colleagues who wish to remain anonymous)
[…] following clarion call was sent to me by a senior FLS academic, after seeing the draft for the financial analysis. “Now the figures are at last clear (or as clear as the administration is capable of making […]
Thanks for this analysis.
There really is no financial justification for the proposed redundancies in the Life Sciences.
It’s nice that the Provost assures us that “the call for volunteers for early retirement and voluntary severance to achieve post reductions continues to make good progress and we are hopeful that a Redundancy Committee will be avoided.” However, I hope that the Provost is also aware that (according to the 2010 Guardian League Tables) the student:staff ratio in “Biosciences” at UCL is 18.5, much higher than for the whole of UCL (11.2).
How are we supposed to provide quality teaching next academic year if our more senior colleagues accept the redundancy/early retirement offers? And why is UCL prepared to send academics into early retirement by effectively paying them not to work? What will be the impact on student experience and future income generation by teaching?
Since the proposed redundancies don’t seem to make much financial sense, there must be another reason why the redundancy programme is being pushed through.
Are there any strategic reasons, such as closing down teaching and research activities that don’t fit the overall UCL strategy?
David
A very interesting, insightful set of numbers. I must say I’m rather stunned by the statement of the finance director that for 07-08, central services simply hoovered up the balance between what you brought in and what you spent. How does that square with your earlier concern about the central costings for each additional grant funded postdoc (was it around 80K per annum?)? Surely the onus is on central services to accurately cost the services they will provide you with, once it is agreed (between them and you) what these services and charges are? Then, any “profit” (or loss) the faculty makes is transparent and can be used to inform (and fund) future initiatives.
I now work in a school that is jointly managed by two different Universities. This has many downsides but one upside is that we are in control of our own finances. Each University provides costs for everything they provide. In return all income (teaching, research, enterprise, everything) comes first to us and is then re-distributed. The balances may not always make for comfortable reading, but at least we know exactly what is required of us. If we make a “profit” (which we have for the last two years), we can use that as a bargaining tool in future negotiations. The corollary is true as well, of course, but at least we are in control of our situation.
Good luck with your argument. For those of us ex-UCL folk who greatly admire Pharmacology and (I suppose!) Life Sciences from afar, it beggars belief that you are in the situation you find yourselves in.
I second the comments of Alistair. I’m sure that all those of us watching on in horror from afar wish you the best of luck.
There are a couple of obvious consequences of this inane way of accounting. It seems that academics in Life Sciences are quite likely to win grants. More fool them. If less grants were won, faculty income would be less, and the savings required would also be reduced (in absolute terms). Maybe savings could then be made by making reduced rubbish collections, for example:
http://www.npr.org/templates/story/story.php?storyId=126436541&ft=1&f=1001
The converse situation is that by winning more grants, academics literally put themselves in the firing line, as the college needs to save their salary, whilst pocketing the cash income!
It really does look like this was cooked up without proper thought, and the whole idea ought to be scrapped. But is UCL still a place where rational thought can win the day?
Laurie Taylor says it every week This one seems relevant
http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=411346&c=1.
“Our thrusting Director of Corporate Affairs, Jamie Targett, has confirmed that he will be attending the two-day May workshop on “Negotiating Change in a Constrained Environment” organised by the Universities and Colleges Employers Association.
Speaking to our reporter, Keith Ponting (30), Targett said that he particularly welcomed the news that the workshop would include a session on “dealing with academic hostility”. However, he hoped that the workshop would also cover other vital HR matters such as “riding roughshod over individual sensibilities”, “trampling on academic integrity” and “undermining contractual agreements”.”