Source: Corbis

Cosy: some politicians say universities are ¡®not living in the real world¡¯

Universities are viewed by many politicians as overstaffed and largely untouched by public spending reductions, a senior civil servant has warned.

Jeremy Clayton, director of knowledge and innovation strategy and international at the Department for Business, Innovation and Skills, said that higher education had also been criticised for having too many excessively paid employees and was seen as a sector ripe for cuts despite having achieved efficiency savings worth ?1 billion over the past three years.

¡°I have heard politicians from across the political spectrum say that universities are feather-bedded, worse than bankers and just not living in the real world,¡± Mr Clayton told a Universities UK event on efficiency on 25 March.

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Universities needed to redouble their efforts to find savings to combat this damaging perception ¨C otherwise they could suffer large cuts in a post-election spending review, he said.

¡°Unless we take this [efficiency] agenda seriously, this perception can become a reality in terms of government policy,¡± he said.

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It was also a mistake for some to claim that the efficiency agenda was ¡°running out of road¡± given the substantial slimming-down achieved, particularly in the science and research budget.

However, Sir Ian Diamond, principal and vice-chancellor of the University of Aberdeen, warned that it may be difficult to ask universities to find more savings in research than those already requested.

According to the latest Universities UK review on efficiency led by Sir Ian, which was published in February, institutions had achieved efficiencies related to research totalling nearly ?200 million in the past three years and were on track to deliver a further ?133 million of savings in 2014-15.

¡°I am not sure how much further the efficiencies can come in,¡± Sir Ian told the UUK conference.

Universities were already given less funding than the full cost of the research they undertook, so ¡°we will have to find money from somewhere else¡± if further savings on research were required, he said.

That point was echoed by Bob Rabone, chief financial officer at the University of Sheffield, who said that universities received 35 per cent less than the actual cost of conducting research.

¡°For every pound for research that comes in, we spend almost half as much again,¡± said Mr Rabone.

That deficit on research had increased considerably since 2010, which meant that research was in effect subsidised by more profitable parts of university activity, such as teaching international students, which generated a 27 per cent surplus, he said.

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Despite his scepticism over finding extra research savings, Sir Ian said that his report had identified scope for efficiencies in other areas, including estates, asset sharing and personnel. But his recommendations to find savings in staff costs, which make up about 55 per cent of total expenditure, were ¡°not about cutting rewards¡±, he said.

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While universities had to ¡°show restraint in pay¡±, they also needed to ¡°recruit and retain [staff] in a global market¡±, he said.

¡°We have to address issues of living wage, issues around zero-hours contracts and [have] non-exploitative contracts,¡± Sir Ian added.

jack.grove@tesglobal.com