Exclusive:Aberdeen University faces making another £10m in voluntary job cuts as £14m in savings forecast
Aberdeen University could be forced to make close to £14 million of further job cuts and savings as the historic institution fights to safeguard its future.
A total of £10m has been set aside for another round of voluntary severance and early retirements for staff, to help plug a predicted “financial gap” of £13.8m in 2025/26.
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Hide AdIt would follow moves towards a £12m reduction in staff costs and an £7.7m cut in operating expenditure over recent months.
A UCU union official said the news would “do nothing to avert the worries of staff” at the ancient institution, and urged bosses to rule out compulsory redundancies.
However, the university described the discussions as part of normal “scenario planning” and said further staff reductions were not part of “current planning expectations”.
Founded in 1495, the University of Aberdeen is the third oldest in Scotland and the fifth oldest university in the UK.
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Hide AdThe Scotsman revealed in May that the university had warned in its accounts that it could not guarantee it would be able to continue as a going concern for the next 12 months.
It warned of “external uncertainties” that “may cast significant doubt over the ability of the university and group to continue as a going concern”.
The university insisted at the time, and now, that it is on a “firm financial footing” after cutting costs by £18.5m, as part of a recovery plan that was agreed in February, as well as a restructuring of its debt.
However, it has now emerged that the university’s court discussed in June how significant further savings may be required.
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Hide AdA budget report said “progress has been good”, but warned “further financial pressures” had been identified.
These included fees from international postgraduate students being down by 25 per cent instead of the expected 15 per cent, adding a £2m pressure.
Funding from the Scottish Government was also “worse than previously assumed”. Papers discussed by the court show the outcome of the budget process meant there was £5.3m of remaining financial pressure to achieve the deficit forecast.
The university has been forecasting an underlying deficit of £12.5m in 2023/24, with a predicted deficit of £6.7m in 2024/25 and of £2.1m in 2025/26.
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Hide AdHowever, a report to the June meeting of its ruling court said: “Whilst projecting the financial position, particularly income, beyond 12 months, is challenging, on current projections there remains a further financial gap in 2025/26.
“Assuming the savings made in 2024/25 are recurring, as things stand a further £13.8m of additional income and/or savings will be required to achieve the specified deficit.
“This has been allocated as a £9.7m staff saving and £4.1m operating cost saving, if no further revenue growth beyond that in the current budget is achieved.
“As specified by the lenders, and to ensure compliance with the revised covenants, £10m cash has been set aside in the 2024/25 cash plan to fund a further ER/VS (early retirement, voluntary severance) scheme if required. This will be determined following the September 2024 intake.”
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Hide AdIt comes amid a recruitment freeze and as the university adjusts to the impact of losing a reported 150 staff in an ER/VS round this spring.
“The scale of staffing and operating savings already achieved means that schools are having to make significant adjustments to ensure that research, education and the student experience are protected,” the court papers said.
Mike Williamson, regional support official at the UCU union, said: “The news that university management are looking into making more cuts in the coming year will do nothing to avert the worries of staff at the university.
“The UCU branch successfully saw off plans for compulsory redundancies earlier this year. Given access to all the figures we remain committed to help the university find savings, but university management should be clear that compulsory redundancies need to be off the table.” Fresh pressures at Aberdeen University are the latest evidence of financial turmoil in the higher education sector, amid a fall in the number of international postgraduate students, costing in excess of £100m this year, and a £28.5m cut in Scottish Government funding to pay for the “free tuition” of Scottish undergraduates.
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Hide AdAberdeen University had faced a backlash last year over plans to axe modern languages courses and related jobs. More than 18,000 people signed a petition rejecting the proposals, with a planned strike by staff only averted after compulsory redundancies were dropped.
Neighbouring Robert Gordon University is also running a voluntary severance scheme, as it bids to try to save £18m, while a dispute has erupted behind the scenes at the University of the Highlands and Islands, as its colleges face amalgamation as part of a restructuring exercise.
The report to Aberdeen University’s court discussed further options for operating spend reductions across the digital, people, and estates directorates, as well as discussions over a new over-arching structure, including bringing together student services and support.
There was also said to be a drive to maximise income from commercialisation opportunities, and a need to look at sharing professional services resources across schools, both in terms of office administration and technical support.
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Hide AdA restructuring of catering functions is discussed in the papers, while student accommodation could be “optimised”.
A spokesperson for the University of Aberdeen said: “Financial recovery planning has reduced the university’s costs by £18.5m putting it on a firm financial footing.
“As part of the budgeting process, good practice dictates a range of scenario planning to reflect the uncertainty prevalent in the sector.
“Part of this scenario planning involves making provision for the continuing challenges ahead, including the potential for further voluntary schemes, but this is not part of our current planning expectations.”
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