Dear Heads of Department,
Following the Heads of Department (HoDs) Forum and news shared with staff via insite last week.
I hope that everyone has an appreciation of the scale of the financial challenge that we face. I am writing now with more detail on identifying and implementing savings to help us build a sustainable platform for our recovery. Every saving helps our overall recovery and will protect jobs for the future.
Before the start of the next financial year we need to have identified and implemented a savings programme that will secure a £50m reduction to University budget for 2020/21. Colleagues in the Finance Office will in parallel be working towards securing a £50m loan facility so that we achieve the overall cash improvement of £100m that I talked about at the HoDs Forum. We will share more details on the voluntary leavers’ scheme in the next week too.
Alongside institutional initiatives, work will now begin in earnest to identify savings opportunities within departments. This process will be managed through the usual financial planning reporting lines (e.g. ARC overseeing savings in academic departments) and departments will be contacted separately through these channels shortly. Central Finance link officers will work closely with your department to help you identify savings. Where appropriate budgets should be built from zero base to identify efficiencies.
In view of the imperative to start saving now, I would like to set out a few guiding principles so that Heads of Department, and all staff, feel empowered to take immediate action to preserve cash:
- We will continue with the ‘pausing’ of routine recruitment – even when posts are in plan. External recruitment will only be considered where there are genuine business critical needs related to income generation that cannot be met by redeployment or reprioritisation of workloads. There should be no expenditure incurred on temporary staff, agency staff or Unitemps unless this has been agreed as being business critical.
- Non-pay expenditure should only be incurred if it is business critical. So, for instance, we would not expect to see expenditure being incurred on the following:
- Travel, conference and subsistence – there should be significant scope for savings in view of ongoing restrictions on travel. Only business critical travel should be undertaken even after restrictions are lifted and virtual alternatives should always be considered.
- Equipment - except where required to replace essential kit that has failed or to enable new ways of working required by Covid-19. In the case of PCs, laptops and other IT devices, it is expected that only IT Services recommended products are bought and from approved suppliers.
- Bought-in consultancy services. Internal expertise should be used instead unless a case can be made that this is not available.
- Catering of any type (internal or bought-in) for meetings (of relevance as we return to campus)
- Other non-pay items that are not directly recoverable from sponsors should not be incurred unless business critical. These restrictions will remain in place until September at the earliest and are very likely to remain place for the whole of 20/21. In all cases where essential non-pay expenditure is required, only approved suppliers may be used and Purchase Orders must be raised and approved in advance of any commitment being made.
- Please note all capital expenditure is paused unless contractually committed and therefore you should not assume that previously agreed capital equipment or refurbishment is still included in the capital plan. A set of principles relating to University match funding on research bids alongside a new process has been developed and will be circulated to HoDs by w/c Monday 18 May.
- Financial Procedures are being amended to facilitate these changes and you should ensure you adhere to any changes to Financial Regulations and procedures.
The above list is not intended to be exhaustive and will require further finessing to meet specific departmental requirements. More bespoke savings plans will be discussed with you through your usual reporting lines for financial planning.
I hope that these initial comments help to set the tone and give Head of Departments some immediate areas to focus on. I reiterate: every saving helps our overall recovery and will protect jobs for the future.
Thank you for your support and co-operation.
Professor Stuart Croft