Bust to boom: Addressing the insurmountable challenge of funding cuts

5 April 2011

Chris Smith

Chris Smith

Former Head of Digital Transformation

The National Audit Office's (NAO) recent discovery that there will be an increase in the number of universities likely to go bust due to insufficient measures in place adds salt to the already severe wound left by the government funding cuts. Added to this is the mounting pressure faced by universities to charge students reasonable tuition fees while providing a world-class student experience - an insurmountable challenge one could say.

One point raised by the NAO was poor management, which will have significant repercussions as universities will have to take responsibility for their own finances. This was something recognised by Robert Gordon University, which overcame part of this problem by opting to outsource its IT services. While this might seem a little too much for a smaller university to undertake alone, by sharing its IT services with another university huge cost savings could be made without affecting the university's daily operations.

In fact, the shared services model is becoming more widespread in the public sector. Just recently, The New Local Government Network (NLGN) created a website to help authorities search for partners and let others know what services they can offer. Similar to the cuts faced by universities, NGLN experienced a 26% grant cut for local authorities in the Comprehensive Spending Review.

The choice of cutting courses and student places - which essentially bring in the revenue that can help improve reputation and the quality of services - is a tough one. In order to avoid going to the wall though, 'at-risk' universities must now find alternative approaches for streamlining costs.

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