Provost’s Long View: shaping the future of UCL in a challenging environment

27 March 2014

As you will probably know by now, we are in the process of consulting with all staff on the direction that UCL is going to take over the next 20 years. The resulting strategy, UCL 2034, will enable us to build on our outstanding position as a research and innovation powerhouse and concentrate further our efforts on improving our student experience and enhancing our education agenda.

Through such mechanisms, we intend to secure our position further as a world-leading institution for decades, or centuries, to come.

In my time at UCL, I have already come across numerous examples of fantastic research, outstanding staff, wonderful student activity and innovative teaching. However, we must not rest on our laurels.

As we enter a period of ever-increasing competition in higher education, both domestically and overseas, we must strive to ensure that our students’ university experience is of the very highest quality.

UCL’s graduates must remain among the most highly skilled and employable in the market, receiving a rounded, global education that enables them to boost our economy and help tackle the grand challenges facing global society.

There are many ways in which our strategic approach can help build on our current success.

Whether it is by investing in UCL’s estate and facilities, thinking about the ways in which we can effectively integrate our research with our student education, repositioning ourselves through our collaborations in London and overseas, or by embedding our global citizenship agenda and culture of enterprise and entrepreneurship within every programme of study, this is a period of opportunity when we can all help shape the future of this great university.

If you are yet to visit the UCL 2034 website, I urge you to take a look and submit your contributions before the final version of the strategy is presented to UCL Council next term.

Balancing the books

As we consider UCL’s future, it is important that we also reflect on the wider issues across the higher education landscape.

David Willetts MP, Minister of State for Universities and Science, has now confirmed that there will be no inflationary increase in home/EU tuition fees for 2015/16. This is the second consecutive year that fees have been maintained at £9,000 per annum, which means that, due to inflation, we are, in effect, experiencing a real-terms cut in our funding.

Moreover, our costs are not stationary. We’ve awarded a one per cent pay increase year on year for the past three years and with incremental drift this amounts to an annual increase in our salary costs of approximately three per cent per annum across the institution. That may not sound like much, but it adds up to £17 million per annum.

Non-staff costs are also subject to inflationary increases and research costs generally increase at a higher rate than headline inflation.

In the absence of an inflation-linked rise in student income, our finances are thus constantly being squeezed. We are currently coping with these pressures by increasing efficiency and care over our expenditure, but the reality is that this lack of an inflationary uplift in our home/EU student income is already beginning to bite quite hard.

Abolishing the student number cap

The government has also confirmed its plans to abolish the cap on student numbers, creating an additional 30,000 undergraduate places nationwide. The potential ramifications of this move are far- reaching.

An overall increase in student numbers necessitates a related increase in long-term public funding. However, with the introduction of higher tuition fees, HEFCE actually began to reduce its teaching grant associated with each student place.

Indeed, this week, I received confirmation of UCL’s share of the HEFCE grant for 2014/15 and our teaching funding has fallen to less than £42 million from the £48 million we received in 2013/14.

This loss is partially offset by an increase in our share of the research funding pot (from approximately £115.9 million to just over £117 million), but nevertheless, UCL’s overall HEFCE funding has been reduced by more than £5 million compared to last year.

The funding of these new national 30,000 undergraduate places is relatively opaque. Although it appears that student loan and support costs have been funded by the Treasury, it is clear that HEFCE has received no increase in funding for these students.

So, in effect, the unit of resource for each individual student will have been diluted (assuming that some of the 30,000 students will be studying subjects that still attract HEFCE support in band A or B). This compounds the effect of there being no inflationary element to the £9,000 fee and creates additional financial pressure.

Not surprisingly, my view is that any additional funding for higher education would have been better used to fund more properly existing student numbers through HEFCE, particularly in band B.

Student loan black hole

Before I move on to better news, I should point out the growing concerns over the resource accounting and budgeting (RAB) charge – the level of student debt that the government must write-off each year.

Graduates currently pay nine per cent of earnings above £21,000 in student loan repayments. If they don’t earn enough to repay in full, the loan is written off after 30 years.

The Department of Business, Innovation and Skills estimates that the RAB charge has risen to 45% of the £10 billion in student loan payments each year. One reason for this is that the average graduate’s starting income fell in the order of 10% during the recession.

The additional 30,000 students nationwide will further increase the pressure on this system and, against this backdrop, I have asked Mr Willetts to guarantee that funds will not be diverted from the science and research budget in order to make up any shortfall.

After asking the question, I experienced the Minister’s ire (not for the first time!), but I feel it is important that we receive these assurances. With Russell Group universities contributing an estimated £30 billion a year to the UK economy, it is essential for the future of our country that research funding is protected long term.

The Budget

Budget

Despite the challenging financial climate, there was also some good news in last week’s Budget, with the Chancellor of the Exchequer earmarking some significant new funding for science.

The most prominent commitment was a pledge of £42 million over the next five years for the Alan Turing Big Data Institute.

Universities wishing to host the institute have been invited to compete for the funding and in his speech, George Osborne referred to the fact that he would like to see: “Britain lead the way again in the use of big data and algorithm research”. I expect us to submit a high-quality bid in due course.

Big data has been prioritised by the government and labelled as one of the “eight great technologies of the future… (with) the potential to transform public and private sector organisations; drive research and development; increase productivity and innovation; and enable market-changing products and services”.

This is an important area of research for UCL and we are already building an enviable track record across a range of ‘big data’ initiatives, from medical bioinformatics to energy-use mapping and climate modeling. Next month's UCL Big Data Symposium provides an opportunity to showcase the important role of big data analytics in a broad range of sectors.

In addition to the Alan Turing Big Data Institute, the Chancellor also announced extra funding (£5 million in 2014–15 and £20 million in 2015–16) for new ‘Catapults’ – technology and innovation centres where UK business, universities, science and engineering combine to transform ideas into new products and services to boost economic growth.

Doctoral training

Finally there was the particularly welcome news of £106 million over five years to fund approximately 20 additional Centres for Doctoral Training (CDTs), providing a further boost to technology and innovation in the UK.

After the announcement, Professor David Bogle, Head of the UCL Graduate School, wrote an interesting summary of UCL’s role in the development of a number of CDTs.

In it, he points out that we have had considerable success when bidding for CDT funding and says that they enable us to “train creative, critical, autonomous, intellectual risk-takers who push back the boundaries of frontier research and take their research skills into society”.

This is precisely the kind of impact that we want to see a UCL education deliver and additional funding for more CDTs can only be good news.

Easter approaches

We are clearly living through challenging times as the competition for funding increases. The best response that we can provide is to ensure that we deliver excellence in everything we do. I should say that even against this challenging backdrop, the UCL community is doing a remarkable job.

I would like to thank you all for your hard work over the past term and particularly for engaging so positively with the development of the UCL 2034 strategy. If you are taking leave at the end of term, I wish you a relaxing Easter break.

Provost’s View will be back in the summer term.

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