Exeter, Devon UK • May 24, 2024 • VOL XII

Exeter, Devon UK • [date-today] • VOL XII
Home News University enacts plan to deal with COVID-related financial losses

University enacts plan to deal with COVID-related financial losses

5 mins read
Written by

University enacts plan to deal with COVID-related financial losses

The University of Exeter has implemented two out of three phases in their plan to deal with financial losses as a result of the COVID-19 pandemic, Exeposé has learned.

Registrar Mike Shore-Nye revealed in a Project Restart meeting that the University has lost a total of £10.5 million due to the refunding of accommodation fees for first year students, and a loss of commercial income.

The Registrar explained that the University has invoked Phases 1 and 2 of their financial plan to mitigate potentially devastating consequences. These phases have focused on non-pay savings, which include postponing new capital investments and cost suppression.

Their implementation has prevented the University from entering their revolving credit facility; a £50 million financial buffer. The result is savings of £30 million, reducing the forecasted deficit to £13.3 million. This contrasts with the two previous financial years which reported a surplus.

Additionally the University has agreed with Trade Unions a series of measures to try and mitigate the financial risks, and avoid compulsory redundancies. These include changes to increments, and a voluntary reducing hours scheme which will commence in the autumn term. 

A loss of all international student income has been projected at £103 million.

In 2020/21, the University’s pay and non-pay savings will deliver an extra £51 million. Therefore, including the potential Government support grant of £11 million, Phase 2 still leaves a gap of at least £41 million. However, the details of the Government scheme are still being finalised, and the University has stated their need to thoroughly examine the details to assess their suitability at that stage.

The University has also planned for a third phase, which would be invoked in a worst-case scenario. A loss of all international student income has been projected at £103 million. With the Government support grant providing a maximum £11 million grant, there would still be a budget gap of £92 million.

Even if Phase 3 is not invoked, the University has outlined the continuation of the ‘prudent budget approach’. This is in line with their inability to make any additional financial commitments until early 2021, but a pause in financial commitments could last until next autumn as part of the University’s strategy.

The uncertainty over student recruitment this year and the possibility of a second wave of COVID cases means we need to do all we can to reduce costs further to reduce financial risks.

University of Exeter spokesperson

A University of Exeter spokesperson said: “Due to our prudent financial management and the efforts of staff to find savings and efficiencies over recent years, we have so far been able to weather the financial storm better than many universities. 

“However, the uncertainty over student recruitment this year and the possibility of a second wave of COVID cases means we need to do all we can to reduce costs further to reduce financial risks. We have been in constructive discussions about reducing costs with our campus Trade Unions since May and have recently agreed on a set of proposals. We are seeking as far as possible to avoid compulsory redundancies.”

The University plans to continue to develop Project Enhance to mitigate the risk of a second spike and future lockdowns in the next academic year.

You may also like

Subscribe to our newsletter

Sign Up for Our Newsletter