Transcript Slide 1

The Political Context – a Funding
Council Perspective
Mark Allanson
The Leadership Foundation for Higher Education
6th October 2011
Issues
• Why invest in HE?
• Economic context
• Political Context
• The White Paper
• Financial Overview
• HEFCE strategic response
• System Uncertainties - Risks
Why invest in HE?
£59 billion economic impact and……
…development of our
professions…
…cultural and social impact
…contribution
to sustainable
development
October 2010
‘ The UK’s Conservative led
coalition has announced the
most dramatic cuts in living
memory…’
2010
• National debt £830bn (60% GDP)
• Public sector borrowing
Coalition budget October 2010
• - £89bn over 4 years (PSBR)
• - 490,000 public sector jobs
• Departmental Budgets:
30% cut in local government
16% cut in police service
8% cut & 42,000 jobs in
defence
- £7bn welfare
• Economic growth forecasts:
2.3% in 2011 (current
2.8% in 2012
2.9% in 2013
The White Paper
• Sustainable sector funding
• Improving student experience
• Increasing social mobility
• A diverse and responsive sector
• A new regulatory framework
Current financial health
2008-09
2009-10
10 year
average
Operating surplus as % of Total Income (TI)
1.3
3.2
1.4
Historical cost surplus as % of TI
2.5
3.6
2.7
Operating cash flow as % of TI
6.8
8.3
5.9
Liquidity days
83
98
73
External borrowing as % of TI
20.9
21.1
19.9
Discretionary reserves exc. FRS17 as % of TI
43.7
46.0
41.6
Staff costs as % of TI
55.4
54.3
56.5
HEFCE’s strategic statement
“Higher education
changes lives. It is
enriching and inspiring
for students and it is
vital to social mobility,
future economic growth
and our international
standing.”
Tackling higher education reform
HEFCE approach
• Smooth transition
• Partnership working
• Respecting Autonomy
• Monitoring Impact
Risks to not achieving forecasts
Examples include:
• Student recruitment/participation
(Demand)
• Student number control (Supply)
• Public funding changes/economic factors
• Pay & Pension costs
• Management decisions
In summary…..
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The overriding context is the economy
and the public purse
The Politics and policies of coalition
are not easy
Student interest, choice and market
belief are core
Significant funding change (higher
income?)
Regulation
Opportunity, choice and excellence
Higher education matters
Thank you for listening
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