Hot topics for FDs

The second session of CISG was also given by a senior mnager from the University of Sussex, this time the Finance Director, and he talked about  Funding IT in Turbulent Times.

First he set the scene with the current funding climate. The credit crunch; public sector cuts, (anything from 20% to 40%); the Browne review, (which had been completed before the election, but not released until after it). Fees were a hot topic yesterday as the £9,000 cap had just been announced.

Reactions to the Browne review had been mixed, with some Universities welcoming it (mainly the Russell Group), others not.  Prospective students and parents don't like increase in fees.

There's a widespread expectation that Browne will lead to a competitive market opening up. HEIs have competed on quality in the past but not cost. Up until today's announcement there'd been some speculation about whether there would be a free market, or a continuation of the current situation with everyone charging the same, but a bigger fee. Today's announcement of £9k cap will mean there will be competition.

Other aspects of current climate:

• CSR affirms Browne will be implemented
• Science budget remains same ie cut. Research funding for all HEIs will go down.
• Innovation budget consolidated
• Capital budgets halved

Then he told us what the hot topics were among finance directors at the moment. Summarised as follows:

• Stability of sector as a whole. Lots of HEIs are in deficit.
• Reliance on T grant which varies. Median is 35%. Even if fees make up difference will be very different situation with only 10% of income from public purse.
• State of the nation.
• Market position for home UG. Difficult to work out till numbers are deregulated as well as fees.
• Continued uncertainty. How bad will it get. How long will it take. What will impact be on PGT and international students?O/S
• Sector is going to become more polarized.

So, is it time for a Paradigm shift? He thinks so.
Traditional approach has been to rely on natural wastage, to reduce investment, and provide most services internally.
What we need to be looking at are  focused reductions, preservation/expansion of investment, use of third parties for specialist provision.

What might Finance Directors be asking UCISA  members over the coming months and years? As he's a Director of the Brighton fringe festival he used some good slides aof fringe acts to illustrate the following:

• Balancing priorities
• Juggling projects and tasks
• Risk taking in a controlled environment
• Coorindation
• Agility
• Harmony
• Customer services with a smile
• Grace under pressure

As budgets are reduced we will have to look at how we reduce the cost of delivery of our services.
A lot is about processes - we need to rationalise them.
IT depts will be asked hard questions about service delivery models - in-house vs shared, outsourced, cloud.
 Future focus will need to be on value. Will need to invest in student services - they will be demanding more services as fees go up.

A couple of interesting  questions then from the floor:

•  If we don't know the cost of our services, how can we make decision on what to outsource etc? We need help from Finance depts to do this.
• Are shared services in conflict with competition? HEFCE are assuming shared services will save money but they may not.