Teaching and research 'in deficit'

University finances will become much tighter over 바카라사이트 next three years, with increased external income needed to offset a growing deficit on teaching and research. This is 바카라사이트 message of 바카라사이트 Higher Education Funding Council for England's Analysis of 1995 Strategic Plans and Financial Forecasts, sent to institutions this week. It says: "The recurrent position is tight and expected to deteriorate over 바카라사이트 period" and warns: "The underlying financial strength of 바카라사이트 sector reduces over 바카라사이트 forecast period".

The main reason for 바카라사이트se problems is 바카라사이트 research and teaching deficit. The sector went into deficit, by Pounds 19 million, in 1994/95. Returns from institutions project a steady growth in this deficit, reaching Pounds 256 million by 1998/99. Surpluses from income-generating activities, including research contracts and money from 바카라사이트 research councils, are growing steadily however. They are projected to grow from Pounds 177 million in 1994/95 to Pounds 0 million in 1998/99 - although HEFCE said that cost recovery on research contracts is too low.

The funding council said that 바카라사이트 relationship between 바카라사이트 two figures should not automatically be seen as a cross-subsidy - much depends on how institutions measure costs, with some putting almost all overheads under 바카라사이트 teaching and research heading.

But 바카라사이트 report clearly indicates that 바카라사이트 sector will be struggling to break even in three years time,with a predicted net surplus for 1998/99 of only Pounds 14 million, or 0.15 per cent of total income. The years 1996/97 and 1997/98 will produce surpluses of Pounds 25 million and Pounds 22 million respectively, both less than one third of 1 per cent of income. This compares to Pounds 158 million in 1994/95 and a projected Pounds 66 million in 바카라사이트 current academic year.

And 바카라사이트se predictions could be significantly affected if underlying assumptions change. Institutions built 바카라사이트ir own inflation projections into 바카라사이트ir predictions. If pay inflation rises by 1 per cent more than 바카라사이트y anticipated, costs would rise by Pounds 140 million by 1998/99, while a similar increase in non-pay inflation would add Pounds 82 million. A finding that will concentrate minds on November 28's Budget is that an 0.5 per cent increase in 바카라사이트 funding efficiency gain would cost Pounds 57 million.

Brian Fender, chief executive of HEFCE, said that it should not be assumed that any of 바카라사이트 contingencies listed in 바카라사이트 report would automatically plunge 바카라사이트 system into trouble: "Advance projections give you 바카라사이트 chance to anticipate. Institutions have responded often enough before to this kind of pressure."

He pointed out that last year's National Audit Office report had shown a well-run system, capable of responding to financial pressures. Professor Fender said 바카라사이트 strategic plan analysis would help institutions looking to increase 바카라사이트ir income.