Kent University Executive Group (EG) have increased central contribution costs from Divisions and are threatening jobs in Arts and Humanities to pay off outstanding building debts and to fund £60 million of building projects in the next 5 years.
From the University Financial Statements it is clear that EG’s priority is buildings, not staff.
We are a University, not a real estate speculator.
Current Financial Context
The University’s financial performance in 2020-21 was ‘ahead of expectations’: it was predicting a £10million running deficit, but in fact has made c.£2.6 million surplus. 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 is no longer running a deficit and is financially stable.
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 who left in 2018-19. For the past year the University has struggled to replace staff. Meanwhile over £2 million pounds per year is paid to just 12 members of EG.
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.
From Jan 2023 the University has agreed to restart payments of its large building debts. This debt repayment will be funded through Divisional tuition fee income.
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 Divisional tuition fees.
Despite debts and hundreds of staff leaving and not being replaced, the University wants to invest more in the next 5 years in buildings rather than staff.
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 55%, while Natural Sciences have a much lower target of 48%. Overall, Kent has a much higher percentage central contribution target than other Universities. One member summarises:
50%+ 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. For example, the Sibson Building costs millions to build, and that debt will be repaid by Divisions across the University. Now that the percentage contribution costs have been increased year on year, 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.
As a UCU member points out: ‘It’s ridiculous that Divisions are being asked to pay for these buildings for which they see no benefit. Our students need teaching expertise and administration, not shiny buildings.’
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 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 of Kent.
We need to think about the future 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.
*All information presented here is taken from the University of Kent Financial Statements 2020-21, available publicly here: https://www.kent.ac.uk/finance/about/accounts.html