Efficiency in HE London June 2017
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1 Efficiency in HE London June 2017 Professor Sir Ian Diamond Vice-chancellor and Principal, University of Aberdeen Chair, Universities UK Efficiency Task Group
2 Overview Internal Push External Pull Huge Success But more to come More of the same and an evolving agenda
3 The importance of UK higher education» Our universities are a national asset» Our universities are efficient and effective organisations» Our universities play a critical role is supporting economic growth 3
4 Push: Some Challenges Increased pressures on teaching costs, including infrastructure + add pension and NI (UK wide around 200m)
5 Increased pressures on teaching costs Expenditure on staffing and infrastructure form the two largest costs of teaching, making up around 60% and 15% of costs respectively Cumulative real terms change in staff costs ( =base year) Total property costs at UK HEIs to Source UUK
6 Push: Some Challenges Increased pressures on teaching costs, including infrastructure Alongside cuts to capital grants Real terms decline in research funding from public sources
7 Real terms decline in research funding from public sources Change in core research funding for UK HEIs to Source UUK
8 Push: Some Challenges Increased pressures on teaching costs, including infrastructure Alongside cuts to capital grants Real terms decline in research funding from public sources; and uncertainty post 23/6/16 (but note extra 4.7bn) Uncertainty on fees Uncertainty on non-eu student numbers Uncertainty on EU student numbers In Scotland, erosion of income due to inflation-circa 100m since 2006/07 In Scotland, 2016/17 reduction of 3.5%-6.5% (3.5%); and 2017/18 further real cut And potential inflation led by decline in pound
9 Pull Factors: Discourse: Universities are awash with cash Source UUK
10 Reading List: Universities UK s work on efficiency
11 The Efficiency Exchange Visit us at 11
12 Approaches to enhancing efficiency Source: PwC, 2011 (unpublished report) 12
13 Sharing Services : Personal Reflections Is there a clear strategic reason to do this? Is the business plan sound? Does the business plan rely on one component? Cash v non cash Build in optimism bias 13
14 Effective procurement 2011 review set a challenging agenda for procurement Called for: Strategic leadership of procurement Better coordination among consortia Increased use of collaborative purchasing Support for enhancing institutional effectiveness 14
15 UUK II: Efficiency, effectiveness and value for money Minister for Universities and Science recommended a second phase of work Broad scope agreed, November 2013 UUK identified sector partners and established working groups in core areas To report findings and recommendations: February 2015
16 UUK report: headlines I HR: Pay costs controlled but need to attract and retain world-leading staff Estates: Space efficiency gains equate to 886m over ten years Improved data for benchmarking
17
18 USET workstreams: 4. Estates and Carbon Reduction» SAUDE: New KPIs on efficient use of estate and sustainability» Leading work in many sustainable technologies (e.g. Combined Heat and Power)» Absolute level of carbon emissions affected by expansion of research activity
19 UUK report: headlines II Research: Efficiency targets delivered, but questions over sustainability Institutions receiving a smaller proportion of fec on RCUK awards
20 Asset utilisation and sharing (1)» What do we mean by research assets?» Why is improving asset utilisation and sharing important?» What types of data are important?» Research management information» Research data 20
21 Asset utilisation and sharing (2) Institution Collaboration National 21
22 Asset utilisation and sharing (3) 22
23 Data as a strategic asset (1)» Huge range of data available to help improve performance» Data can help universities to be strategic in what they do and also in how they do it.» BUT: measuring alone does not bring benefits weighing the pig doesn t make it fatter» Data can help to identify a challenge, and to design a solution. Towards Universities a digital UK strategy The voice of universities 23
24 Data as a strategic asset (2)» So we have access to huge amounts of data how do we make sense of this?» Huge range of potential uses:» Benchmarking performance» Identifying and delivering cost savings» Improving our effectiveness» Accountability, quality, regulation» Making the case for higher education» Examples» Management information and the student experience» Enhancing the effectiveness of procurement to deliver cost savings» Asset sharing 24
25 Learning analytics and the student experience (2) Nottingham Trent University Source: From bricks to clicks (2016) 25
26 Learning analytics and the student experience (3) The Open University Source: From bricks to clicks (2016) 26
27 How to make best use of data for efficiency» Need a common language / vocabulary» Clear understanding of the purposes of the data collection» Clarity over objectives» Strategic and conceptual framework» Requires investment in skills, technology, people» Buy-in: requires all parties to understand the objectives, agree with the purpose and support the collection» Timeliness of data critical 27
28 Where next? Evidencing efficiency and value for money» Previous spending reviews had centrally mandated targets» Increasing focus on (a) openness and accountability and (b) value for money» 2015 UUK review called for a more coordinated approach to evidencing VFM» Need: buy-in from university leaders and governors and common approach 28
29 Where next? The wider landscape» Universities spend significant amounts on subscriptions to a wide range of bodies UUK launched a review of 10 of these, sector agencies» Sector agencies provide a range of functions and services to universities form an important part of the HE landscape» However, the landscape has developed over time to meet different needs and there have been significant changes to funding models» UUK review chaired by Sir David Bell - are the present set of agencies appropriate to the changing needs of the sector?» Objective is to ensure that agencies provide the services needed by institutions, in a form that is suitable focus on lowering overall costs, enhancing value, improving choice and flexibility» Also joint work with Elsevier 29
30 Epilogue» Universities have consistently adapted to challenging circumstances to deliver world-class HE and efficiency» Some of the challenges ahead are new and significant but this reinforces the need to ensure we continue to focus on efficiency, effectiveness and value for money aka productivity (see US)» There are many different approaches that can be used but the most important approach is an underlying commitment to continuous improvement» The role and potential for data to improve the effectiveness of institutions is significant but will require investment in skills and technology 30
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