HOW TO LOSE £30 MILLION: THE UEA CRISIS EXPLAINED

By a frustrated member of UEA staff

The University of East Anglia is in crisis. £30 million or more in deficit. Hundreds of jobs under threat. Zero of the leaders who got us here willing to take accountability. It is not an exaggeration to say that this is an existential threat to the future of one of Norfolk’s most important institutions.

“Very difficult challenges”

On January 17th, all university staff received an email signed by then Vice-Chancellor David Richardson, the institution’s most senior executive, which outlined “the very difficult financial challenges UEA faces”. It described a budget deficit of £23m for 2023/2024, projected to rise to £37m within three years, and cited missed student recruitment targets, increased student drop-out rates and rising energy costs as the main culprits. Heads of departments and services were asked to prepare for budget cuts of at least 10-20%, and Richardson was “sorry to say” that he could not rule out the possibility of making compulsory redundancies to help achieve savings. In a euphemism that would become key to the university’s messaging around this issue, he designated these changes as part of ‘the acceleration of the Strategic Review programme (SRP)’, a wide-ranging plan for changes across the university that was launched in 2022.

The timing of this announcement was clumsy, to put it mildly. Earlier in the day some staff had heard the news piecemeal in departmental meetings and instructed to keep it hushed up, while other departments were due to have their equivalent meetings the next day. The email only went out when it did because “a local news outlet plans to run a story this evening and [we] wanted to ensure you heard the update from the University first”. Alongside shock at the magnitude of the deficit and concern for their job prospects, the conversations among staff I was party to over the following days centred around the cowardice of an executive team who were delegating the delivery of the news to lower-level managers in an attempt to disperse responsibility. That failure to take accountability was a sign of things to come.

How did we get here?

But before we continue with the tale, let’s flash back for some context. How did we really get to this point? Part of the answer can be found in the minutes of UEA Council, the governing body of the university, responsible for monitoring and holding accountable the Executive Team (ET) who lead the day-to-day business of UEA. 

the conversations among staff I was party to over the following days centred around the cowardice of an executive team who were delegating the delivery of the news to lower-level managers in an attempt to disperse responsibility. That failure to take accountability was a sign of things to come.

In the Council meeting of June 2022, Council noted that “the university was not in crisis emerging from the pandemic” and confidently confirmed that, while there were “risks in the underlying assumptions”, the ET’s financial plan was “robust and sustainable”. By October, some concerning figures were being reported to Council: Chair Sally Howes noted that recruitment targets had not been met for the third year in a row, at a total cost of £79m, with the shortfall in new students for 2022 accounting for a £12.1m reduction of expected income for 2022/23. However, the outlook is framed as optimistic in the minutes, based on the comparatively minor news that the outturn deficit for 2020/21 was £5.5m less than expected. The only action taken to address these revelations was assigning Director of Finance Jason Brown to rewrite his long-term financial plans, for review by the January Council meeting. In November, Council was brought news that the £12.1m shortfall for 2022/23 had been “mitigated by removal of costs from the business”, without detail of what ‘mitigation’ meant in this context; meanwhile, Brown’s rewrite of the long-term plans was pushed back to “March-May 2023”.

Each of these meetings featured a report from the Vice-Chancellor, but as the minutes show he neglected to make mention of the developing financial situation at any point in those reports. Minutes for Council meetings held since November have not yet been made available, but we can only assume that at some point between November and January something motivated the ET to stop treating a catastrophic deficit as if it were business as usual. Was the ET in fact aware of the situation sooner and keeping Council in the dark? Or was it only when Brown began his revision of the long-term plans that they realised what a mess they were in? These will be questions for the inquiry requested by Clive Lewis MP, if it goes ahead. In the meantime, the sources we have paint a picture of negligence, denial and poor planning on behalf of the ET.

These recent failures of management don’t tell the whole story. While reduced student numbers likely do present the most significant financial challenge for any university under post-2010 fees arrangements, UEA has its own specific challenges as well. The last decade of the university’s history is littered with failed or scrapped projects that have been quietly swept under the carpet by official communications, but are well remembered by the staff who witnessed them crash and burn.

The biomass plant slated to provide enough ‘green’ energy to run campus, closed in 2014 after five years of patchy power and millions spent. The Generation Park project, which promised a futuristic new district in the heart of Norwich built around yet another biomass plant with questionable green credentials, left to moulder on the drawing board in 2016 with UEA and other backers on the hook for tens of millions invested. The controversial new teaching building Sky House, scrapped with the advent of COVID-19, but not before significant spending on planning and architects’ fees. The new timetabling system introduced in 2021, which collapsed almost immediately, leading to weeks of scheduling chaos on campus. And those are just the ones that made it into the public sphere. Rumours abound of other embarrassments that have been kept quiet, such as an ill-advised plan to build campuses in African countries and create a stream of indentured international students, or an atrocious deal struck at the height of 2022’s fuel price spikes that has locked UEA into paying high energy rates even as prices have started to come down.

We cannot blame the university’s current leadership for all of these doomed projects – although current Chief Resource Officer Ian Callaghan has held senior planning and finance roles since 2007, most of his ET colleagues are much newer to the university. However, many non-executive staff identify that opportunities for them to participate in governance have been steadily declining over the past two decades. Instead, increasingly unaccountable executives have been authorised to steer the ship as they please.

Recent developments

Events at UEA since the announcement of January 17th have been dramatic, to say the least. The ET met with representatives of the three campus trade unions, UCU, Unison and Unite, on Jan 23rd. This meeting was immediately followed by an unprecedented joint meeting for staff called by all three unions, at which they made their position clear: the deficit announcement, the refusal to rule out job cuts, and the disrespect shown in the communication of these, were a betrayal of any faith staff still held in the institution. Union leaders rightly demanded resignations from the ET, and each union has since initiated procedures for taking industrial action over this dispute. Unfortunately, draconian union laws mean that these processes are long, and mandates for industrial action are not likely to be secured before June at the earliest.

As it turned out, there was one resignation forthcoming – on February 27th, in a cloyingly complimentary all-staff message, Council Chair Howes announced that Richardson was making a break for it. In his own statement, Richardson humbly admitted to his failures of oversight and begged for the UEA’s community’s forgiveness. Just kidding. There was no apology, no explanation – the only reference to the current crisis was an allusion to “a variety of further challenges”. In fact, he didn’t even provide a reason for his resignation. Whether he received the kind of golden handshake that departing executives of other universities have been granted in the past will be a question for future FOI requests. What we do know is that his total annual compensation at time of departure was in the region of £340k. On March 27th, it was announced that David McGuire will be joining UEA in May as interim Vice-Chancellor, a role he has held at multiple other universities, while a longer-term replacement for Richardson is expected to be chosen in 2024.

In his own statement, Richardson humbly admitted to his failures of oversight and begged for the UEA’s community’s forgiveness. Just kidding. There was no apology, no explanation – the only reference to the current crisis was an allusion to “a variety of further challenges”.

Before and after Richardson’s departure, communication around the situation from the ET has been continually inadequate. An emergency voluntary severance scheme was launched in early February, but the ET failed to provide any firm detail on its cost reduction plans despite a promise to do so before the scheme’s deadline at the end of that month. Instead, they announced that figures from UCAS for the 2023 application process suggested that recruitment targets would be missed yet again, leading them to the deficit figure of £30m. They also confirmed that that money would need to be found by September of this year. That is the timescale they have forced upon staff, going from the first rumblings of financial trouble to potential mass job cuts in less than nine months.

Meanwhile, the campus union branches were reporting to their members that the ET was failing to engage with them over these developments in the ways that they are mandated to by official agreements and policy. Requests for insight into the institution’s finances have been met with one-page documents of abstracted figures. At one point, faced with the prospect of giving unions specific answers about cost-saving plans that might give grounds for industrial action, the ET instead took the absurd position of claiming that they had no plans at all to meet the target of saving £30m by September. At the time of writing we are still waiting for official confirmation of plans for where and how savings will be made across the institution – these are expected by the end of April, unless there are yet further delays. In spite of this official silence, staff in different departments are reporting that they are receiving wildly varying figures from higher ups in covert communications that the ET refuses to admit to.

This is not to say that the executive have been completely idle. In March they announced two policies that amount to a de facto pay cut for almost all university staff: deferring the annual pay award that all universities are obliged to provide, and scrapping its commitment to pay all staff no less than the real living wage. The university’s lowest paid employees now receive the government’s national living wage of £10.42/hr, widely recognised as not being adequate to the name. The real living wage sits at £10.90/hr, meaning these staff face a real-terms pay cut of almost 5%. Meanwhile, there have been no commitments from the executive team to make any significant reduction to the six-figure salaries many of them receive, despite the precedent they set by taking a (temporary) 10% pay cut at the height of the pandemic.

The scale of the threat

So what exactly will happen if this scramble to save £30m is unsuccessful? The main concern is that UEA will breach its loan covenants – that is to say, fail to meet the conditions of repayment on major loans it has taken from the banks (and possibly from private finance as well). As well as likely restricting its ability to secure future loans, this would also trigger the intervention of the Office for Students (OfS).

The OfS is the supposedly-independent regulator of the higher education sector, set up in 2018 in a merger of previous regulatory bodies. From its inception, there have been questions over whether the OfS is truly independent from government. A January report commissioned by the OfS itself told of a “widely held belief that the OfS operated too closely to government”. Just last month, the House of Lords Industry and Regulators Committee launched an inquiry into the body, for which “independence from and relationship with the Government” will be a key focus. Many HE insiders and commentators see the OfS as a key part of the long-term Conservative project to marketise the higher education sector.

The OfS has a long-standing commitment to the principle that it will not bail out failing higher education providers – a principle very much in line with the broader government aim of rendering universities functionally identical to private companies. However, what it actually does when an institution shows signs of financial precarity is intentionally kept from public view, so as not to “increase the likelihood of a disorderly closure”. Case studies released by the OfS this week give some insight into what it has done in such cases in recent years. Most details are kept vague and anonymous, but one of the studies makes clear that the regulator has no qualms about compelling institutions to sell off their assets in order to meet its requirements for financial sustainability.

The UEA Council minutes for last November note that the annual “student and finance return” was due for submission in December. Given the absence of UEA Council meetings since that submission deadline, and the clear preference of the OfS to keep its investigations behind closed doors wherever possible, it could already be the case that UEA is under consideration for ‘formal monitoring’ by the body. In an open letter dated 28th February, academics and other staff warned that mass redundancies would see the university de-emphasising research in favour of ‘cash cow’ teaching-intensive faculties, decimating much of the work that makes UEA an important player in the academic world and the local economy. If loan covenants are breached and we see OfS intervene with requirements of asset sales, those fears could become reality alarmingly quickly.

Staff and students fight back

That open letter was initially put together by professors from the Humanities faculty, which is generally thought among academic staff to be the one most at risk of cuts. Professors from other faculties joined in with this work, and were able to secure a meeting on 28th March with Council Chair Howes and Christine Bovis-Cnossen, the former Provost turned Acting Vice-Chancellor who was the subject of a vote of no confidence from staff in her previous role at Thompson Rivers University in Canada. The two Professors chosen to attend reported that, while Howes and Bovis-Cnossen seemed genuinely keen to hear their concerns and criticisms, they were determined to deflect scrutiny of their plans regarding redundancies.

Conscious of the short timeline forced upon us and the need to take imminent action to resist job cuts, a group of staff, students and other locals have formed the SaveUEA campaign group.

The campus trade unions remain as firmly opposed to the ET’s attitudes and actions as they did in January, and all three are working towards the official declaration of local disputes, with major industrial action likely to follow. However, the failure of the ET to meet agreed requirements for co-operation, alongside the aforementioned restrictive trade union legislation, mean that these disputes are not likely to get fully off the ground until well into the summer break.

Conscious of the short timeline forced upon us and the need to take imminent action to resist job cuts, a group of staff, students and other locals have formed the SaveUEA campaign group. Working independently of trade unions and of the lobbying engaged in by Professors, SaveUEA canvassed UEA Council members as they arrived for their meeting on 17th April, and will be continuing to work with the wider Norfolk community to call for zero redundancies, the restoration of the real living wage, and a salary cap of £100k across the institution.

It’s going to be a tense summer for UEA staff, students, and the many others who work in connection to Norfolk’s largest education institution. I still believe that we can prevent redundancies, restore wages and establish a new model for functional governance at UEA – but we’re going to need all the help we can get.

Follow SaveUEA here and contact them to get involved with the campaign. If you’re a member of UEA staff but not in a trade union, you can join UCU, Unison or Unite. If you know anyone connected with UEA, do reach out to them – they may be looking for ways to channel their frustration!

Featured image credit: N Chadwick

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