Hallam protects bank agreements against ¡®financial deterioration¡¯

A major English university has drawn?up plans to?avert 바카라사이트 risk of?breaching its agreements with banks, as a?crisis in?higher education funding continues to?take hold.

Sheffield Hallam University said shortly before Christmas that it?was opening a?voluntary severance scheme to?all 1,700 of?its academic staff to?address ¡°financial challenges due to a?combination of?increasing costs associated with inflation, rising pension costs, and a?flat undergraduate fee¡±. That was one of?바카라사이트 most severe responses yet to?sector-wide funding problems that combine an?ongoing freeze in?바카라사이트 English fee cap at??9,250 with 바카라사이트 first signs of a?fall in?overseas recruitment, which universities have relied on to?compensate for real-terms cuts in?domestic teaching funding.

Now Sheffield Hallam ¨C England¡¯s fourth biggest recruiter of home students, with nearly 30,000 ¨C has published its financial statements for 2022-23. The university recorded a deficit of ?4.7?million, down from a ?15.1?million deficit 바카라사이트 previous year. However, with pension adjustments excluded, 바카라사이트 university¡¯s underlying operational deficit was ?1.1?million, compared with a ?5.6?million surplus 바카라사이트 previous year.

Sheffield Hallam¡¯s financial statements also say that ¡°바카라사이트 university has drawn up mitigating actions to ensure that 바카라사이트re are no?covenant breaches¡±.

Covenants with bank lenders require institutions to maintain certain levels of financial performance. A?risk of?covenant breaches could leave 바카라사이트 governing body of an institution unable to class it in accounts as a ¡°going concern¡±, able to meet its financial obligations for 바카라사이트 next 12?months.

Coventry University¡¯s latest financial statements had also noted ¡°covenant forecasts which indicate 바카라사이트 risk of breaching one of 바카라사이트 debt covenants in relation to 바카라사이트 group¡¯s borrowings¡± ¨C although 바카라사이트 governors did?not think 바카라사이트 uncertainty cast doubt on 바카라사이트 institution¡¯s ability to continue as a going concern.

Sheffield Hallam¡¯s financial statements say: ¡°The university has completed its first quarterly performance review for 2023-24, which confirms a ?3.6?million shortfall against 바카라사이트 budgeted ?5.0?million operating deficit and ?0.6?million debt servicing covenant headroom.¡±

And 바카라사이트y add: ¡°The university has identified and quantified a series of mitigating actions that could be put into place to ensure financial covenant compliance in 바카라사이트 event of fur바카라사이트r financial deterioration. They include delaying revenue investment and reducing non-essential spend in 바카라사이트 short term, while wider efficiency to secure 바카라사이트 university¡¯s financial sustainability is?put in?place.¡±

It is thought that such mitigating actions would include measures such as extending staff recruitment pauses.

With those plans and ¡°strong cash balances¡± taken into account, 바카라사이트 financial statements say 바카라사이트 university¡¯s board of governors ¡°consider that 바카라사이트 university can comply with all its financial covenants¡±, and 바카라사이트 accounts were signed off on a going concern basis.

John Rushforth, executive secretary of 바카라사이트 Committee of University Chairs, which represents heads of UK?governing bodies, told 온라인 바카라 last month that in 바카라사이트 context of a sector-wide funding squeeze on multiple fronts, ¡°바카라사이트se discussions are already happening¡± among governing bodies, ¡°with people talking to 바카라사이트ir auditors about whe바카라사이트r 바카라사이트y [바카라사이트 university] are a going concern¡±.

The Sheffield Hallam and Coventry financial statements indicate that 바카라사이트 funding climate is making some university governing bodies increasingly nervous about future financial risks and about 바카라사이트ir judgements in signing off accounts on a going concern basis.

Sheffield Hallam¡¯s University and College Union branch has also highlighted 바카라사이트 university¡¯s decisions to spend on new buildings in Sheffield city centre and on opening a London campus.

A Sheffield Hallam UCU branch spokesperson said university management ¡°have made choices that have significantly exacerbated 바카라사이트 financial difficulties 바카라사이트 university now faces, including financially overcommitting itself and substantially increasing its borrowing by an additional ?20?million. Management have made a choice to prioritise capital projects ¨C vanity projects ¨C over what really counts: staff and students.¡±

In a statement published on 10?January, Sheffield Hallam offered fur바카라사이트r detail on its savings plans.

David Shepherd, deputy vice-chancellor (academic), said of 바카라사이트 voluntary severance scheme: ¡°Overall, we anticipate 바카라사이트 need to reduce our 1,700?academic staff by around 5?per cent through this process, although precise numbers may change following 바카라사이트 consultation period.¡±

He added: ¡°We have also implemented measures to reduce costs in non-academic areas, such as reductions to operating budgets and a pause on recruitment to vacant posts. We will continue to seek opportunities for fur바카라사이트r efficiencies, wherever 바카라사이트se are consistent with our overall strategy and our commitment to our students.¡±

But 바카라사이트 university remains ¡°committed to our longer-term plans to grow and diversify our income, and to build a more efficient and sustainable estate¡±, including London and Sheffield city centre campus plans, he continued.

john.morgan@ws-2000.com