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Teesside University well-placed for planned cuts

Mar 10 2010 by Jez Davison, Evening Gazette

TEESSIDE University will face a £12m-a-year funding shortfall if previously announced public sector spending cuts are implemented.

But huge cash deposits and a focus on commercial activities would still leave it well-placed, vice-chancellor Graham Henderson said.

Last month English universities learned their budgets were to be slashed by £449m for 2010/11 - a move which came under fire from higher education chiefs who said they could not absorb reductions in teaching and learning resources.

The move prompted the Confederation of British Industry (CBI) to say universities should consider mergers or working with the private sector to cut costs.

Mr Henderson said universities could be self-sustaining if they were run in the same way as private businesses.

“We have £56m of cash in the bank and only 60% of our annual income is derived from public sources,” he said. “We are seen as one of the financially strongest universities in the UK.”

He said he planned to reduce revenue independently on the public sector to 50% within three years, which would cushion the impact of cuts.

In 2009-2010 the university recorded a sixth successive record surplus - £11.4m or 8.4% of turnover of more than £140m - and saw Government income rise by 10.2%.

But with that income expected to fall in the next academic year, Mr Henderson is looking for a greater focus on commercial activities.

Already committed to major capital projects totalling £28m, the university intends to grow its student intake. In 2009-2010 student numbers were around 28,000 including 18,000 part-time students and more than 1,000 overseas learners.

Mr Henderson said lifting the cap on university tuition fees - a move backed by the CBI and the Association of Graduate Recruiters - could have a “major impact” on its recruitment plans.

“In principle it’s sound enough but it depends on how this will be funded. If the students are expected to get the money at commercial rates they might struggle.”