June 23rd, 2020
Deputy Vice-Chancellor Professor Andy Long and Chief Financial Officer Margaret Monckton further update colleagues on plans to address the financial impacts of the coronavirus.
In a virtual sense, we have been on the road this past month. We have hosted some two dozen meetings with teams in academic and professional services areas across the University and have a further round of meetings planned across the rest of the term.
Speaking with hundreds of colleagues, we have had the opportunity to update them on progress with our financial plans, and had the privilege of receiving very helpful feedback and ideas to make savings and generate the income we need to invest in our staff, students, research and teaching next year
Our community has responded selflessly to the challenge of tackling our parallel financial challenges of mitigating a projected loss of £60 million in the period to July, alongside resetting our financial plans for the new academic year and beyond, to mitigate a projected reduction in our annual turnover of 20%. You can read more about the detail and figures of the financial challenge in our previous blogs in April and May.
We are truly grateful to all colleagues for sticking with the emergency spending controls to ensure we are successfully managing our cash flow across the term to protect staff salaries, online teaching and critical research. Current cash flows show that these controls are working and we are currently forecasting to reach August with our debt position being at an acceptable level, albeit £20 million worse than it would have been without the global pandemic. As a result, we have already increased delegated approval for FPVCs and Directors to £10,000 and will look to lift the spending controls at the end of July once 2020/21 budgets have been confirmed.
A budget plan for 2020/21 will be presented to University Council for approval at the end of this month, which reflects thoughtful, innovative but ultimately very difficult decisions by budget holders across the University to pause investments and reduce planned spending by 15%. Coupled with further measured borrowing on top of our current £100 million debt, this plan will help us meet the costs of our teaching and research next year, and position us to recover our finances more quickly than many universities.
However, we are under no illusion just how difficult many savings decisions will have been and we are enormously grateful for every contribution made by colleagues across the institution.
Savings proposals have reduced non-pay spend in areas such as scholarships, conferencing, subscriptions and sustainable commitments to reduce energy, print and travel costs. We have also received a significant response to the current voluntary redundancy scheme available until the end of June that will help to make savings and minimise the need for compulsory redundancies. We will continue to consider requests for voluntary redundancy sensitively and carefully to balance the needs of our colleagues with delivery of our teaching, research and services to students.
As pay represents well over half of all spending, some £365 million annually, measures to manage our pay bill continue to be considered and we may need to pause spending on things like the Nottingham Reward scheme, pay increments, promotions or re-grading. We will continue to discuss these measures with our trades unions prior to reaching a decision.
We have also been delighted to accept many new ideas to generate further income from our teaching, ranging from extending our provision of online postgraduate taught courses to expanding numbers of higher apprenticeships. Proposals have also been accepted to increase our research margin, where we currently receive 67p for every £1 spent on research – lower than many of our competitors.
To support our vital 2021/22 student recruitment activity that draws in more than half of the University’s annual income, colleagues in External Relations have just launched Discover something extraordinary, a series of live lectures, recorded subject talks and virtual open days, with contributions from many academic colleagues,
We will host a further round of staff meetings over the next few weeks, so if you have not had the opportunity to speak with us, please do attend one or email us with your thoughts and questions. We will write again next month with further news on progress. In the meantime, a number of common questions and themes have come up in the meetings we have hosted to date, so we thought we would publish these, together with the answers.
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