This guest blog from Dr Dely Lazarte Elliot and Professor Sajjad Hussain, from the Schools of Education and Engineering at University of Glasgow, looks at their research carried out as part of the SPICe Academic Fellowship Scheme. As with all guest blogs, what follows are the views of the author and not those of SPICe, or of the Scottish Parliament.
Scotland’s universities are facing a financial crisis. Systemic deficits, frozen tuition fees and rapidly increasing costs have prompted institutions to announce significant job cuts. At the UK-wide level, it has been alleged that up to 60,000 university positions could be at risk. This matter is not simply regarded as a sectoral problem confined to higher education as it may affect Scotland’s economic future, innovation capacity, and regional stability.
Universities are not peripheral to Scotland’s economy, rather they are ‘anchor institutions’ that can generate £28.3 billion in annual economic impact, support 34,000 jobs through research funding, and create employment multiplier effects that are capable of sustaining entire regional economies. For example, in Edinburgh, the university sector’s contribution is reckoned to be equivalent to ten Commonwealth Games. In Dundee, universities support 1 in 12 jobs in the city.
Given the importance of universities and the financial situation they face, our research investigated the implications of the tightening finances and related job losses in Scotland. We pursued two research strands: desk research via literature review and empirical research via individual interviews. Our review of the literature is comprehensive, drawing from a range of resources. Of more than 100 resources considered, 68 were cited in our report.
We also interviewed 12 individuals representing a wide spectrum of stakeholders from postgraduate students through to Vice-Chancellors from different universities and non-university organisations. The evidence gathered through literature and interviews suggests that this crucial issue is not temporary, and instead warrants an urgent, carefully considered response.
Our findings highlighted:
a) the multi-dimensional value of institutions – widely regarded as ‘anchor institutions’;
b) the arrival of the ‘perfect storm’ did not come as a surprise as there were numerous indicators and root causes that gradually led to the Higher Education (HE) sector’s financial predicament;
c) the consequences or the intertwined impact of job cuts; and
d) that while the literature points to a sustainable HE sector, the interviews offered deeper and alternative perspectives, e.g. how job cuts can be viewed either as a catalyst for a vicious cycle or as a strategic response.
In conducting this research, we observed that where a financial crisis might be a pressing concern for a specific university, it becomes of concern to staff members from other universities. This can be observed from an academic who said:
“We are colleagues … everybody that works in higher education. We all talk about these things all the time. It’s the main topic of conversation. …we all care and we’re all very, very aware of it….”
Senior academic, ancient university
Such sentiments are shared by many others who work for Scottish universities and not only from those severely affected by the crisis, e.g. University of Dundee announcing over 300 redundancies.
How did this situation come about for the HE sector, particularly coming from the position where universities were highly appreciated for their multi-dimensional value? Both the review of the literature and the interviews converged on the idea that universities serve Scotland in capacities that are beyond the immediate purpose of learning and teaching – recognising their role as ‘anchor institutions’.
This means that they operate as ‘builders’ of skills and entrepreneurship; ‘brokers’ connecting industry, policy and international partners; ‘beacons’ projecting reputation globally; and ‘bases’ of long-term stability that drive regional regeneration, cultural vitality and social cohesion.
One interviewee – in senior executive management within the university sector – described universities’ multi-dimensional value by stating that universities “bring much more than just the sum total of their output”.
Whereas research and teaching were universally acknowledged to be the core missions of academia, universities’ ‘third mission’, which the literature explains is orientated towards industry and society at large, is equally valued. This concept is aligned with the idea of being ‘anchor institutions’, particularly in relation to universities’ ‘civic and cultural contribution’ (see Figure 1).
Moreover, the literature suggests that not only do universities attract investment, and in turn, support economic growth, but the presence of universities also fosters long-term stability in the region while driving regeneration, cultural vitality and social cohesion. This reinforces how universities serve as builder, broker, beacon and base – and in turn, contribute to multiple aspects of public life. This then emphasises the qualitative difference that universities make, particularly in rural Scottish regions where there is an observable population decline and/or significant ageing issue.
Figure 1: Universities as ‘anchor institutions’
Against this backdrop, there were also assertions during our interviews with HE stakeholders – particularly from the senior management team and senior academics – suggesting that indicators were rife of the ‘perfect storm’ brewing on the horizon long before it appeared. As a result, the arrival of the storm did not come as a surprise. It was argued that it was not a matter of if, but when, the storm would finally arrive. The observed gradual fall in international student recruitment was seen as a focal contributory factor to this ‘financial storm’. The full picture is more complex, however. What strongly emerged from our study is that there were indeed a combination of factors that led to this predicament. The long list (see Figure 2) includes a frozen fees regime for domestic students; escalating costs that outpace income; reduction in public funding in real terms; over reliance on international students; and structural financial weaknesses of institutions.
Figure 2: Challenges faced by universities
On top of that, more than half of our study participants pointed to a critical issue emanating from a lack of good governance, leadership, strategic thinking and strategic financial management as a way of building financial resilience. And this is where we will now focus our attention.
In the Gillies Report, which investigated specifically the financial oversight and decision making in the case of the University of Dundee, effective leadership and governance were stressed. In this connection, a senior executive member within the university sector remarked:
“… Prof Gillies said that [the Scottish Code of Good Higher Education Governance (‘Scottish Code’)] was fit for purpose … albeit it wasn’t the Titan in the instance of Dundee … and so we’re not closed off to the idea that there could be further improvements. … The operating environment has become [more risky and challenging] in recent years, so effective leadership and effective governance [is crucial]. When times are stable, it is one thing, but when you’re responding to a declining environment, in which we are seeing financially across the sector, it doesn’t take much for the consequences of poor leadership or poor governance to have quite a significant impact.”
Senior executive member, non-university affiliation
In the quote above, the impact of leadership, governance and management of university finances is stressed. It prompts us to reflect more profoundly. What do leadership and governance look like in a stable financial environment? What do they look like during times of financial uncertainty? How are staff members and students affected – at the personal, academic, economic and wellbeing levels? The personal impact of strong or weak university governance can be gleaned from the remark of an academic who experienced a precarious academic career in 40 years of working for the same university.
“I’ve had almost had a career out of it, but it has … for 40 years been precarious. I have gone through several cycles of … redundancies.… [University of X] always had budgetary problems because of where it sits geographically, because of its size, it’s just not quite big enough to sustain vibrant research, but just big enough to keep it going. And so … it’s always going to be up-and-down … university governance … is a disaster area. It still is.”
Senior academic, ancient university
The recent announcement of the formation of the Future Framework steering group looking at the future sustainability of university funding is an opportunity to examine these issues with a view to finding long-term solutions for the sustainability of the sector. It is to be hoped that leadership, governance and management will be at the core, with attention given to the question: Should these remain constant and stable or should weathering the ‘financial storm’ call for a different type of leadership, governance or management?
Dr Dely Lazarte Elliot and Professor Sajjad Hussain, University of Glasgow
The full report ‘The Impact of Tightening Finances on Scotland’s Universities’ by Professor Sajjad Hussain and Dr Dely Lazarte Elliot for their SPICe Research Academic Fellowship Scheme is available in full on the SPICe Research Briefings website.