Oxford faces 40% budget cuts

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College bursars across the University watched George Osborne’s announcement of the Comprehensive Spending Review intently yesterday. It confirmed many of their worst fears.

With both teaching and research grants significantly cut from next year onwards, Oxford will struggle to balance its books if it cannot find additional sources of income fast.

40 percent of public funding for universities has been removed by Osborne – a cut of £2.9 billion across the sector which is “likely to wipe out any benefit to Oxford that might otherwise come from the recent Browne Review proposal”, a university spokesperson said.

Oxford now waits to discover what proportion of the cuts it will bear. College bursars and educational experts have discussed some of the options University officials will be considering over the next few days with The Oxford Student.

Raising fees

In theory, the conclusions of last week’s Browne Review should solve many of the University’s problems. With the cap on tuition fees entirely removed, they would be able to charge students much more than the current £3,000 limit, making up for lost revenue from the government.

David Palfreyman, New College’s Bursar and Director of the Oxford Centre for Higher Education, puts it neatly: “On the teaching side it would appear that if Browne and the teaching cuts are phased properly…we can charge the kiddywinks £6,000 and claw back the money we lose.”

The reality of the transition from state to private funding is unlikely to be quite so smooth, though.

Firstly, it is not at all guaranteed that the Browne Review will survive Parliamentary scrutiny, especially as all Lib Dem MPs pledged to vote against any increases in fees before the election.

If Oxford’s income is hit by swingeing government cuts that cannot be offset by a substantial rise in fees, the University will suffer dramatic falls in income. Or, as Palfreyman has it, “if Browne doesn’t come to pass but cuts do, we’re completely buggered”.

Even if the cap were to rise, bursars complain that they would be taxed on any income over £7,000, meaning that the University would not reap the full reward of increased fees. Under Browne’s proposals a rise in fees to £7,000 would only replace cuts in government funding – maintaining the existing ‘funding gap’ estimated at £8,000 per Oxford undergraduate.

Corporate funding

Either way, it is likely that the University will seek increased revenues elsewhere: both from donations from alumni and rich benefactors and increased corporate sponsorship.

Alan Smithers, Professor of Education at Buckingham University, said: “Science employers depend very much on graduates. So that may mean repaying student loans or direct funding of universities in certain key areas. The pharmaceutical industry or petrochemical industry may be so reliant on research income that they will fund chairs and sponsor these departments.”

Similarly, the University will look to boost their coffers by appealing to alumni for more donations.

The challenge in this area is that these avenues have all been explored by Oxford in the past, and dramatically increasing the income they raise overnight will prove problematic.

Oxford has been running the ‘Oxford Thinking’ donor campaign for more than two years and has yet to reach its £1.25 billion target. Figures obtained under the Freedom of Information Act show that donations fell as the recession began to bite.

Going private

Oxford’s administrators also have the option to press the nuclear button and take the University private. With dwindling revenues from government, this option is no longer only favoured by a small coterie of right-wing academics. In fact, The Sunday Times reported last weekend that Cambridge University is also considering this option.

Palfreyman thinks the “famous five” of Oxford, Cambridge, UCL, ICL and Manchester will be reluctantly considering this option.

The Browne Review has made privatisation more likely, because although it cuts the amount of public subsidy available to universities, it increases the burden of bureaucracy.

As Palfreyman has it: “There are an awful lot of extra strings attached through the Browne Review – we’re getting less and less public money but you’re jumping through more hoops to get that. The hoops range from widening participation and access…to little things shoved in the small print such as all new academic staff having to do ‘Janet and John’ learn how to be a good teacher course, which is a complete distraction from getting on with research.”

The college lottery

Whichever options Oxford chooses to boost its revenues, simultaneous cuts to bring spending down are likely. These will hit different colleges in different ways, meaning that colleges with smaller endowments are more likely to cut services that will directly affect students.

“The treasury clobbers Oxford which filters the cuts through to colleges. If you’re St Smug’s, sitting on a £250million endowment – like St John’s – you can absorb anything. But if you’re St Jude’s, on a £20million endowment, peddling hard on the conference trade to keep afloat, hacking off anything will be extremely difficult,” says Palfreyman.

Cuts have already begun to bite at some colleges. At New, students have noticed a fall in the number of scouts, while scouts have stopped cleaning some rooms altogether at Univ. At Corpus, college officials used the spending cuts to justify their attempt to hike college rents by nine percent last term.

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