23 January 2007

University of Dundee - Sustainability Review

The University of Dundee is engaged in a Sustainability Review, the final recommendations of which will be reported to the University Court on February 19th. It will be for the Court to decide whether it wishes to accept the review group’s recommendations.

Statement from Sir Alan Langlands, Principal and Vice-Chancellor of the University of Dundee:

1. The University has been growing and developing over the past five years - it has achieved excellence in learning and teaching, maintained its position in the highly competitive field of academic research, increased student applications by 80%, raised average entrance standards from 299 to 378 UCAS tariff points, appointed 79 new professors and started the process of rebuilding the city campus. The academic management structure of the University has recently been reorganised to give clearer definition and authority to the professional disciplines and to enable further progress in the general arts and sciences and the visual disciplines.

2. During this period the University has been operating on very tight financial margins although it has benefited from national policies which have provided ringfenced money for capital investment and ‘research pooling’ - a mechanism for funding interdisciplinary research and joint working in Scotland’s universities.

3. Looking forward, the University expects the growth of public spending in higher education to slow down and competition for research funding to intensify. In line with other universities, it also faces mounting cost pressures in relation to pay, pensions and utilities. Over the period 2006-8 alone, annual staffing costs are expected to rise by 5% more than the University had previously budgeted for.

4. If the University is to keep developing, it must:

• continue to build on its existing strengths in education and research
• improve its competitiveness in parts of the University which perform less well, and
• move to a position where it is generating resources of 3% of turnover per annum. This will support new academic initiatives and sustain reasonable levels of capital investment, ensuring the maintenance of the estate and the core technologies required for education and research purposes.

At current prices, this will require a net improvement in our underlying income and expenditure position of £6.85m by 2010/11.

5. In 2005/6, the University recorded a budget deficit of £1.6m. In 2006-7, we are projecting an underlying budget deficit of at least £1.6m. This is clearly not a sustainable position for the medium and long term.

6. It is against this background that the University Court and the Senior Management Team set up a review group chaired by Professor Michael Davies to identify savings and make recommendations about achieving long-term financial sustainability through a combination of targeted savings and improved income generation. There will be discussions on the broad findings of the review at the College Board meetings planned for the week commencing 22 January 2007. The Principal will also discuss these issues at the Senate meeting on 7 February. The review group will report to the Finance and Policy Group on 29 January 2007, the Human Resources Committee on 30 January 2007 and formally to the University Court on 19 February 2007. It will be for the Court to decide whether it wishes to accept the review group’s recommendations.

7. The broad findings from the review of sustainability are expected to be as follows:

(i) looked at as a whole, the University has a relatively low income per academic FTE when compared with other institutions

(ii) a sizeable amount of research is being undertaken without any Funding Council research funding or other external grant support

(iii) research income is high compared to other institutions of similar size, but we are highly dependent on biomedical charities, whose contribution to research overheads is sometimes limited. We are holding our position but research income is not growing as it was in the past

(iv) staff costs will rise more quickly than anticipated as a result of the 2006 national pay deal. The introduction of the framework agreement and the pressure on pension funds add to overall staffing costs

(v) postgraduate numbers are growing (by 39% from 2002-2006) but not fast enough - new targets should be set with the aim of increasing the number of taught masters students

(vi) the implementation of effective workload and workforce planning is patchy and needs to be improved

(vii) the capital investment in buildings and equipment over the period 2002-6 was fully justified given the condition of the estate and the availability of external resources. It has also facilitated stronger staff and student recruitment and the generation of substantial research grant income.

8. The specific proposals from the review of sustainability are likely to focus on:

(i) the development of a new approach to environmental planning, with reductions in the size of the existing town and regional planning group

(ii) a reduction in the provision of modern languages teaching, with any external courses offered at full cost recovery

(iii) a new approach to cost recovery for other aspects of continuing education

(iv) a more integrated approach to teaching social work and community education, with reductions in the size of the community education group

(v) significant cost reductions and efficiency improvements in the student and academic support services including the library, research & innovation services and estates

(vi) staffing reductions linked to improved workload and workforce planning across all disciplines (vii) new income generation targets linked to overseas student recruitment, the development of new taught postgraduate masters programmes and improved research overhead recovery

(viii) introduction of a scheme to achieve savings in national insurance costs

(ix) ensuring that the capital programme for future years is focused on key academic and other priorities and that it gives due emphasis to long-term maintenance

(x) revision of the resource allocation process to incentivise income generation through education and research activities.

9. The anticipated mix in terms of savings and income generation to achieve the target surplus of 3% per annum is £4,325,000 from recurrent savings, £2,125,000 from improved income generation and £400,000 from the national insurance scheme. It is envisaged that the 3% target will be achieved progressively over the period to 2010 whilst ensuring that existing students are not adversely affected and that employment law and the University’s own human resources policies are fully observed.

10. We will seek to achieve savings in the staffing budget through general staff turnover and voluntary means where possible but cannot rule out redundancies at this stage. Throughout the period, we will take care to scrutinise retirement profiles and turnover in the affected areas. Staff may be offered redeployment where appropriate as well as re-training where this is practical. We will also offer severance and early retirement packages. At every stage, the University will keep staff informed of progress and will consult with representatives of the three recognised trade unions, UCU, Unison and Amicus.

11. It is not envisaged that the University will stop all recruitment during this period - in particular, academic staff will be replaced in key disciplines (for example, civil engineering and medicine), the University will continue to recruit to externally funded programmes (for example, those linked to ‘research pooling’ and other major research grant successes) and investments to develop existing strengths will be considered as the financial position improves. Indeed, we expect that the University’s overall staffing complement may well continue to rise rather than fall over the period to 2010. The aim is to build on the University’s many successes in a way that makes good academic and financial sense.

12. The University faces a significant period of change over the next 2-3 years and some tough choices about priorities and future academic strategy. Every effort will be made to ensure that we continue to advance our education and research mission, that the interests of students are protected at all times and that staffing issues are handled in a fair and transparent way.

Alan Langlands
22 January 2007

For media enquiries contact:

Roddy Isles
Head, Press Office
University of Dundee
Nethergate Dundee, DD1 4HN
TEL: 01382 384910
E-MAIL: r.isles@dundee.ac.uk