Current Financial Context
The University’s financial performance in 2020-21 was ‘ahead of expectations’ with an overall surplus of over £4 million. The University is ahead of its ‘cost-savings’ targets, and the total staff cost savings required by the banks have now been found. Staff cost savings were delivered one year ahead of schedule.
The University has saved an ongoing £17.1 million on staff costs since 2019-20 with O4S and KVSS. This amounts to a reduction of 6.4% of FTE, or 186 staff who have left and not been replaced, added to 2.4% of FTE, or 72 staff from 2018-19. Meanwhile over £2 million pounds per year is paid to just 12 members of the executive group.
Over the past 5 years, the University has spent £126.8 million on capital expenditure (buildings).
The University has outstanding debt of over £66.5 million, which it has spent on various building projects over the past 10 years, but has net assets of £269.6 million.
EG plan to spend another £59.2 million on capital expenditure over the next 5 years. This will not be financed through ‘further borrowing’ but instead funded through the University, principally through UG tuition fees.
‘Heading into 2022-23 a return to a small surplus is expected with increased income generation.’
Central Contribution Costs
Each subject area and Division is now expected to contribute a percentage of their income towards central University costs. This percentage target is different for each Division, with LSSJ having a high target of over 50%, while Natural Sciences have a much lower target of 30%. Overall, Kent has a much higher percentage central contribution target than other Universities. One member summarises:
45%+ contribution targets demanded now of individual schools is, in my understanding, to pay for the debt accrued previously and loans. Obviously, this percentage will go up with interests going up because of inflation. We need to reject the principle that debts accrued by others have to be paid by us.
As a way for the University to engineer reasons to target specific subject areas, each area and Division is now being tasked with being financially autonomous, and giving a high percentage of its income towards central costs.
Such a financial model is totally erroneous within a University context, where we are an ecosystem which supports and funds each other across many years. E.g. Given the much lower costs of running degrees in Arts & Humanities subjects, this Division has historically been subsidising the costs of more expensive degree programmes (like natural sciences) since the introduction of student fees in 2010. Now that the percentage contribution costs have been increased, the Division of Arts & Humanities is being targeted.
Given the large amount of debt that the University has accrued paying for large-scale building projects, failing IT systems (Kent Vision) and investing in expensive projects like the Medical School, Divisions and Schools are now being tasked with footing the bill.
Instead of taking on further debt, the £59.2 million planned spend on the next 5 years of building projects will need to be funded through the University, principally through UG tuition fee income.
Therefore the University has increased its central percentage contribution costs from each subject area in order to pay off past debts and fund these future building costs. We are a University, not a real estate speculator.
We are one university and we value all staff. Brains, not buildings, are what makes the university.
We need to think about the future governance of the university and take expertise, knowledge and learning back to the core of what we do. That’s the only recruitment strategy that will secure our future, not lavish buildings.