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Growth versus Productivity/Efficiency
Presented by Andrew Neal
15th January 2009
INCOME AND EXPENDITURE2008/09 2013/14 Comment
Income £'000 £'000
Funding Council Grants 47,616 54,296 Low inflation. Proportion declining.
Academic Fees 43,774 63,674 Home static, overseas increasing
Research Grants and Contracts 26,168 34,844 Growth ca. 6.6% pa
Other Operating Income 44,144 53,534 Growth ca. 4.5% pa
Endowment Income and Interest Receivable 4,122 3,371
Total Income 165,824 209,719
Expenditure
Staff Costs (Recurrent) 98,330 116,554 Staff costs within target range
Staff Costs (Restructuring) 150 150
Depreciation 9,732 15,964 Based on capital programme
Other Operating Expenses 48,485 64,608 Rebalancing from staff costs
Interest Payable 3,359 3,124
Total Expenditure 160,056 200,400
Revaluation reserve transfer 685 685
Historical Cost Surplus/(Deficit) 6,453 10,004 Move to 5% surplus
4% 5%
Compound Annual Growth Rates (2008/09 to 2013/14)
0
1
2
3
4
5
6
7
8
%
Funding Council Grants Academic Fees Research Grants andContracts
Other Operating Income
Compound Annual Growth Rates (2008/09 to 2013/14)
0
2
4
6
8
10
12
%
Academic Fees Home Academic Fees Overseas
5 year total income growth
0
10
20
30
40
50
60
70
80
%
Yo
rk
Ex
ete
r
St
An
dre
ws
Qu
ee
n M
ary
La
nc
as
ter
Ea
st
An
glia
Ba
th
Du
rha
m
Lo
ug
hb
oro
ug
h
Su
ss
ex
Es
se
x
Re
ad
ing
Le
ice
ste
r
Su
rre
y
5 year growth – HEFCE Income
0
2
4
6
8
10
12
%
Qu
ee
n M
ary
Ea
st A
ng
lia
Yo
rk
Exe
ter
Le
ice
ste
r
Ba
th
St A
nd
rew
s
Re
ad
ing
Ess
ex
Su
sse
x
Lo
ug
hb
oro
ug
h
Su
rre
y
La
nca
ste
r
Du
rha
m
HEFCE Income as % of turnover
0
5
10
15
20
25
30
35
40
%
Su
ss
ex
Qu
ue
n M
ary
Ex
ete
r
Ba
th
Re
ad
ing
Du
rha
m
Ea
st
An
glia
Le
ice
ste
r
Lo
ug
hb
oro
ug
h
St
An
dre
ws
Es
se
x
La
nc
as
ter
Yo
rk
Su
rre
y
5 year growth – Research Income
0
2
4
6
8
10
12
14
16
%
Exe
ter
Qu
ee
n M
ary
St A
nd
rew
s
Yo
rk
Du
rha
m
La
nca
ste
r
Ba
th
Su
rre
y
Su
sse
x
Lo
ug
hb
oro
ug
h
Ea
st A
ng
lia
Ess
ex
Re
ad
ing
Le
ice
ste
r
Research Income as % of turnover
0
5
10
15
20
25
%
Qu
ee
n M
ary
St
An
dre
ws
Yo
rk
Le
ice
ste
r
Du
rha
m
Su
ss
ex
Ba
th
Lo
ug
hb
oro
ug
h
Ea
st
An
glia
La
nc
as
ter
Re
ad
ing
Es
se
x
Ex
ete
r
5 year growth – Home/EU Income
0
2
4
6
8
10
12
14
16
%
Qu
ee
n M
ary
Lo
ug
hb
oro
ug
h
Ex
ete
r
Yo
rk
Re
ad
ing
Ea
st
An
glia
La
nc
as
ter
Ba
th
Du
rha
m
Su
ss
ex
Es
se
x
Le
ice
ste
r
St
An
dre
ws
Su
rre
y
Home/EU Fees Income as % of turnover
0
2
4
6
8
10
12
14
%
Ex
ete
r
Lo
ug
hb
oro
ug
h
Su
ss
ex
Du
rha
m
Re
ad
ing
La
nc
as
ter
Es
se
x
Ea
st
An
glia
Ba
th
Qu
ee
n M
ary
Le
ice
ste
r
Yo
rk
Su
rre
y
St
An
dre
ws
5 year growth – Overseas Income
0
5
10
15
20
25
%
Lo
ug
hb
oro
ug
h
Du
rha
m
St
An
dre
ws
Yo
rk
Ba
th
Qu
ee
n M
ary
Re
ad
ing
La
nc
as
ter
Ex
ete
r
Ea
st
An
glia
Es
se
x
Su
ss
ex
Su
rre
y
Le
ice
ste
r
Overseas Income as % of turnover
0
2
4
6
8
10
12
14
16
%
Es
se
x
St
An
dre
ws
Ba
th
Le
ice
ste
r
Qu
ee
n M
ary
Lo
ug
hb
oro
ug
h
Su
rre
y
La
nc
as
ter
Su
ss
ex
Re
ad
ing
Yo
rk
Du
rha
m
Ea
st
An
glia
Ex
ete
r
5 year growth – Other Operating Income
0
2
4
6
8
10
12
14
%
Ea
st
An
glia
La
nc
as
ter
St
An
dre
ws
Wa
rwic
k
Su
rre
y
Yo
rk
Du
rha
m
Lo
ug
hb
oro
ug
h
Ex
ete
r
Es
se
x
Ba
th
Le
ice
ste
r
Re
ad
ing
Su
ss
ex
Qu
ee
n M
ary
Other Operating Income as % of turnover
La
nc
as
ter
Wa
rwic
k
Su
rre
y
Yo
rk
Le
ice
ste
r
Re
ad
ing
Ex
ete
r
Lo
ug
hb
oro
ug
h
Du
rha
m
Ea
st
An
glia
Es
se
x
Su
ss
ex
Ba
th
St
An
dre
ws
Qu
ee
n M
ary
0
5
10
15
20
25
30
35
%
Percentages
CompaniesTradingResidencesGrant releaseContracts
Composition of Other Operating Income
Average fee (price) increases compared with turnover (volume) growth 2005/06 to 2008/09
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 14,000
16,000
18,000
20,000
22,000
24,000
Overseas UG Higher - US$ equivalent
USD Equivalent Feb
USD Equivalent Oct
Years
US
$
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 12,000
14,000
16,000
18,000
20,000
Overseas UG Lower - US$ equivalent
USD Equivalent Feb
USD Equivalent Oct
Years
US
$
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2,500
3,000
3,500
4,000
4,500
Lancaster University - Analysis of Home PGT fees PT charged and comparison with HEFCE assumed fee
HEFCE
Lancaster equiv (per FTE)
Years
£
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2,500
3,000
3,500
4,000
4,500
Lancaster University - Analysis of Home PGT fees FT charged and comparison with HEFCE assumed fee
HEFCE
Lancaster
Years
£
Compound Annual Growth Rates (2008/09 to 2013/14)
-2
0
2
4
6
8
10
12
%
Staff Costs(Recurrent)
Depreciation Other OperatingExpenses
Interest Payable
2003/4 2004/5 2005/6 2006/7 2007/80
2
4
6
8
10
12
14
AdditionsUnderlying
Increases in payroll costs
Staff Balance
Academic Staff - total 31%
- (exc T & R only) 20%
Clerical (& related) 21%
(Faculties 11 -24%)
Annual Payroll Pressure Prior to Pay Awards(2008/09 to 2013/14)
0
0.5
1
1.5
2
2.5
3
3.5
%
Incremental Drift Promotions Pay andPensions
Total
Annual Payroll Pressure with 2.5% Pay Award
-3
-2
-1
0
1
2
3
4
%
Incrementaldrift
Promotions Pensions Total CAGR inforecasts
Pay awards Impliedefficiency
Annual Payroll Pressure with 8% Pay Award
-10
-8
-6
-4
-2
0
2
4
6
8
%
Incrementaldrift
Promotions Pensions Total CAGR inforecasts
Pay awards Impliedefficiency
4.45
4.95
5.45
5.95
6.45
6.95
7.45
7.95
8.45
8.95
9.45
9.95
10.4
5
10.9
5
11.4
5
11.9
5
12.4
5 -
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Saving to achieve 4% surplus
Savings pressure £'000 (orig)Savings pressure £'000 (revised)
Percentage increase (depending on Aug 09 pay award)
£'0
00
Process issues
Our processes have developed in an ad-hoc way
Many tasks are done by people who are not adequately supported or trained.
Growth means we can’t manage this by informal networks anymore
A lot of time is wasted looking for information
Many departments are too small to do all the things they are expected to do
Why is this important?
Growth in research and teaching needs to be supported by appropriate processes and infrastructure
Too much resource is being wasted Not a problem for the finance department If we don’t change things academic
development will be constrained
People management - an underpinning theme Performance Partnership Modern policies and procedures Effective processes and systems Management information Succession planning
Final thoughts Life is getting tougher We can’t change everything We are implementing the admin review Faculties have reviewed their own admin
structures Are we heading in the right direction?
