Monday, 3 August 2015

Staff costs

I’m looking at the issues around managing costs in higher education at the moment (look out for a post in the next few days about why not all vacant posts can be replaced). My starting point has been to look at the data, and in particular the high level data on staff costs.

HJ calculation from HESA data
The chart – which I have calculated using HESA data – shows the proportion of universities’ total income which is spent on staff.  (See my post from October 2014 which explains what this means and why it matters). There is data for the four home nations plus UK-wide data, covering the period from 1994-95 to 2013-14, being the most recent HESA data set available.

The chart tells a story of good financial times in the early years of the Labour government in the late 90’s; and closer management of spend following the introduction of top-up fees in 2006.

Of the four national patterns, England accounts for by far the largest share of the overall income, so it’s no surprise that the total UK and the England lines follow each other closely. In turn, Scotland appears over time to track England more closely. The data for Northern Ireland looks peaky, but don’t forget that it’s a very small sector (only four institutions, of which two are very small), so individual institutional strategy will have a disproportionate impact. Wales looks to be going against the grain – increasing the proportion of income spent on staff compared to the other nations.

With devolved funding this can happen – this may reflect differences in funding for capital, for instance, rather than deliberate policy by Welsh universities to grow staff spend. But HEFCW in Llanishen might be interested to find out why, before the Assembly Finance Committee in Cardiff Bay asks the same question.


  1. Very interesting graph. Has the staff cost in England reached a plateau, or will rise as the income may fall?

    1. Thank you, Sujit. I suspect that VC's will try to keep staff costs down - it enables investment in other things. So if income falls, staff costs will too.