Boom or bust?

Capital spending by UK universities has had a bit of attention in the past couple of weeks. I thought I’d look behind the headlines.

What were the headlines? Well, firstly the Russell Group’s claim, reported in the Times Higher, that capital spending plans by their members would boost the economy by £44billion over the next five years. Secondly, HESA’s data release showing the sources of funding for capital spend, picked up by the Times Higher (with a serious case of chart-junk) and by Registrarism.

The picture painted by the media is striking: confident institutions investing for the good of all, and looking to their own resources to replace lost public money. And jolly good too.

My dim-and-distant social science training made me want to know more, so I looked at the HESA data itself to see what was going on, using the most recent four years’ data. HESA report in nominal terms (that is, the actual pounds spent), so I used the ONS GDP deflator to convert the HESA data to constant prices, using 2009-10 as the base year. This is what the data then looks like:

So the real story is a decline in capital spending, with perhaps the stirrings of a revival fuelled by internal funds. This does suggest that the increase in income due to higher undergraduate tuition fee income is enabling institutions to invest more. Or to put it another way, universities recognise that increasing student expectations driven by £9k fees make increased investment necessary.

What also strikes me is the amount of loan financing: from £475m in 2009-10 down to £305m in 2012-13. At a time when interest rates are at historically low levels. Does this show a lack of confidence in the future? It’ll be interesting to see what the 2013-14 data shows this time next year.

Don't tell him, Pike

A couple of wise souls I follow on Twitter observed last week that there was a lot of activity from HEFCE and on Higher Education generally:

@registrarism: There really are a lot of #HigherEd posts being pushed out today

@SophieBowen1: Are staff at HEFCE about to go on hols? Large number of reports out today ...

And it seems to be true. One recent HEFCE post that caught my eye – but not picked up by the twittersphere that I could tell – was Circular Letter 06/2016 – Supporting Public Accountability: presenting income and expenditure income to current students.

This is the outcome of some work done by HEFCE, BUFDG and the NUS on students’ desire to know more about what universities spend their money on, and a finding that

of 2,400 current students conducted by NUS Research Services ... there was significant interest in this type of information but that:

• Of the students who looked for this information, 40 per cent were unable to find it.

• Once the information was found, 44 per cent of students reported that the format it was presented in was difficult to understand.

Not a surprising finding – I have often wondered at the number of staff in universities who aren’t familiar with financial statements, so why should the students fare better?

The guidance is clear enough:

The research identified several priorities for improving the presentation of financial information for students:

• It needs to provide a useful but not overly complex level of detail.

• It needs to be accessible to students who may not have expertise in interpreting financial information.

• It needs to be up-to-date.

• It needs to be clearly signposted on institutional web-sites (which are where students look for it), with technical language clearly explained.

And the actions also admirably clear:

Institutions are asked to identify their solution by the end of October 2014, ready to publish information from their 2013-14 audited financial accounts by January 2015. 

It’s unquestionably a good thing that universities are encouraged to work with their students’ unions to agree an approach. But I found the examples interesting.

Four approaches were suggested:

• Actual numbers and a narrative
• A pie chart of expenditure, by category (no figures)
• A bar chart of expenditure
• An infographic

These range from minimal data but really clearly presented for accountability (that is, the actual numbers and narrative) through to confusing presentation (the infographic) but with a lot more detail and granularity in there. I’m not clever enough with pdf to export the contents to the blog post, but have a look and see what you think. To me, the guidance presents clarity and content as if there’s a trade-off between these two aims.

Why are students interested? Well, my guess is that it isn’t idle curiosity but all because students want to understand the value that they’re getting. A Sir Humphrey quote from Yes Minister is apposite here:

We should always tell the press freely and frankly anything that they could easily find out some other way

It’s all in the annual accounts anyway. My message to universities would be, work sincerely with your students’ unions, agree a format which makes sense, but don’t try to conceal anything with a fancy chart. Authenticity and transparency with your students will be better in the long run, even if you don’t like it now.