July 23rd, 2020
Deputy Vice-Chancellor Professor Andy Long and Chief Financial Officer Margaret Monckton write about the latest developments on plans to address the financial impacts of the coronavirus.
In this month’s update, we would like to update colleagues on the approved 2020/21 budget plan, and confirm that consideration of pay increases and reward will take place in January once the full picture on student recruitment and consequent income is clear. You can read more about the scale of the financial challenge and our community’s work to meet it in our previous blogs in April, May and June.
Budget Plan 2020/21
The University’s budget plan for the new academic year 2020/21 was approved by University Council last week, where it was commended for the innovative but ultimately very difficult decisions taken 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 and considered use of government-backed loans, keeping strictly to this budget plan will help us protect jobs and meet the costs of our teaching and research next year, while positioning us to recover our finances quickly in the critical years ahead.
Again, we wish to record our sincere thanks to budget holders for committing to budget savings and efficiency measures, making the most difficult of decisions and to all colleagues for keeping with the emergency spending controls. It has only been through this level of support that we have achieved next year’s budget, and end the current financial year with our debt position at a manageable level.
Now that we have an agreed budget for 2020/21, we aim to commence our new financial year in August by relaxing some of the emergency spending controls, enabling budget holders to make spending decisions while delivering their savings commitments. We will confirm more details, including support for budget holders in doing this, in the next few weeks.
Government university research support package
We will make some early use of the government’s university research support package announced at the end of June, having secured some £4.6 million under its grant scheme to extend UKRI- and National Academies- funded projects that were due to end shortly, but have been impacted by coronavirus and the national lockdown. While this will not cover all of the cost of the more than 80 research projects in this position, we are working with Faculty PVCs to determine how to allocate the funds carefully and fairly.
However, details for the bulk of the government’s support package have still yet to emerge, and it may be the end of the calendar year before we have real clarity. What we do know is that at least 75% of the package will be loans, which will incur further debt and attract specific government expectations on how it is spent by universities. Nonetheless, we will be examining the terms very closely and taking advantage of any measures that will genuinely improve the position for staff and students.
Redundancy schemes and pay bill measures
The voluntary redundancy scheme closed at the end of June and received a significant response, currently totalling savings of more than £15 million. Every application was considered sensitively and carefully to balance the needs of our colleagues with delivery of our teaching, research and services to students. The response to the voluntary redundancy scheme, coupled with the 15% savings plans, additional borrowing facilities and access to government support means that we are pleased to confirm that we will not need to proceed with University-wide compulsory redundancies at this time.
As we have written previously, we have been discussing measures with our trades unions to manage our £365 million annual pay bill such as pausing spend on things like pay increments and cost of living increases in order to protect jobs.
We are continuing those discussions and are currently speaking to the unions about pausing any final decision on various pay measures (including increments and cost of living) until January 2021 at the latest, once the full picture of this autumn’s student recruitment round is clear. We will also confirm revised timescales for regrading, promotion and the Nottingham Reward scheme in due course.
While this proposal may mean waiting longer than is usual for confirmation of any pay increases or rewards, if this is taken forward we hope that colleagues will understand the immediate priority has been to protect jobs, teaching, research and the student experience. Overall, student application numbers are higher than – and deferral patterns are similar to – previous years, however particularly this year, we must all wait until we see students arriving on campus and registering before making decisions on adjusting any spending plans dependent on fee income which usually accounts for more than 50% of the University’s annual income.
Staff and trades union conversations
We have continued our virtual tour of teams across the University, to date having hosted around 40 meetings with more than 3,000 colleagues to explain our financial position and answer questions about savings measures.
Emergency Finance Group members attended a series of special meetings with our trade unions, where we had the opportunity to present and discuss finance and savings plans in considerable detail. Having enjoyed a constructive partnership with our trades unions on health & safety and workloads in recovery planning, it was helpful to continue that approach with the University’s finances. Some key questions were raised and answered, and colleagues can view these in a recording of our presentation to the unions in the finance section of the Recovery Planning webpages. We have added also these to our Finance FAQs should colleagues find it helpful.
We will host a new round of staff meetings on the University’s finances in the new academic year, as we want to maintain the conversations we have built up over recent months, and we will write again next month with further news on progress. In the meantime, should you have any comments or questions, please do email us with your thoughts.
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