I am writing to share with you some thoughts on the substantial financial challenges, present and future, that we face as a university. The UK economy may now be limping out of recession, but recovery has its own costs and they are being felt strongly in the public purse. Exactly what this will mean for us in Oxford in the coming months and years is still not entirely clear but, as I trust this letter demonstrates, it is not going to be easy.
We know that £4.6 million of public funding has already been withdrawn from two student programmes, one for further study (ELQ), the other for overseas scholarships (ORSAS). Meanwhile, recent reductions to teaching funds total nearly £1.2 million. We also know now that a further £5.2 million is being cut from teaching money, channelled through an allocation for old and historic buildings. That adds up to about £11 million. In addition, a significant question mark is currently hanging over nearly £3.5 million of funding for our award-winning museums and collections.
Those are the existing or potential cuts in public funding that relate specifically to Oxford. But that is only part of the story. Latest estimates indicate that the sector as a whole is facing cuts totalling nearly £450m, compared to previous projections, for next year alone — with more to follow in the next two years. We don’t know yet what our ‘share’ may be, but obviously there will be one — and even allowing for the prospect of increased research funding, it is likely to add significantly to the funding hole already described.
In the face of these challenges we need to do two things: our best to mitigate the impact of cuts, and all we can to maximise other sources of funding available to us. On the first of these, one aspect is of course to contain costs, and all parts of the administrative and academic services and collections have produced options for ten percent economies over three years. In addition, both the capital moratorium first imposed in October 2008, and the protocol constraining staff recruitment, remain fully in place.
At the same time, a group appointed by Council, the Strategic Plan Review Implementation Group, whose members come from across the collegiate University, has been examining ways of reconciling our strategic academic objectives with the funding challenges we face. Not all of these challenges are directly related to the spending cuts described above; we are also having to contend with the unexpected outcomes of last year’s Research Assessment Exercise. The group’s recommendations include a review of teaching provision, a ring-fenced endowment fund for joint teaching posts, funding for colleges, deficit support for Humanities and MPLS, and adjustments to some teaching bands.
So far as the second challenge of maximising all of our income streams is concerned, it is heartening to report that the Campaign for the University of Oxford continues to do well in what are obviously difficult circumstances and now totals over £780 million. This is important for all sorts of reasons; it shows the confidence that others have in us and it demonstrates that we are not fixated or paralysed by the fluctuations of the public purse. In addition, our endowment performance has been much stronger than most of our global peers.
In the background to all this, of course, is the Independent Review of Higher Education Funding and Student Finance, chaired by Lord Browne. To date it has focussed on what has happened since the introduction of tuition fees.
Next comes the second, and crucial, phase on what the future should look like. The review’s answer to that won’t be revealed until after the general election. The media focus is predictably with the fee level. But focussing on the level of fees in isolation would be a serious mistake. The remit of the review is rather broader, and it is to be hoped that it takes a long hard look at the wider context and the overall funding model. We have encouraged it to do so and we will, I am sure, be emphasising that point in a subsequent submission.
What is worth saying now though, in the light of recent developments, is that any eventual increase in fee income has to be set in the context of the funding cuts that have already been made, or that are still looming; and, as already has been noted, the gap which fees are meant to help plug is widening. How, in the longer term, is that gap to be closed and a firmer foundation established for the future? That is where, for universities like ours, creative thinking most needs to be applied.
Uncertainty can be unsettling but, if harnessed, it can also be stimulating. The sheer quality of the work our University does is beyond doubt, and Oxford’s best argument for support remains the outstanding talents and achievements of its teachers, researchers, and students. These underpin a global reputation with few equals. It is not just in our own interest, but in the national and indeed global interest, that such excellence is sustained. That is certainly my goal. I am confident it is one we share and one that, despite some very real challenges, we can and will achieve.