As this year’s freshers intake starts to arrive on campuses around the UK, increasing competition for student numbers is driving universities to make substantial future investment in teaching and student facilities, despite growing concerns about economic conditions, according to a Deloitte survey of finance directors
The firm’s annual survey of higher education finance directors gauged the views of 48 FDs of UK universities, representing one third of the UK higher education sector.
Most (89%) said there is an above normal, high or very high level of financial uncertainty facing their university and 57% say now is not a good time to be taking risks onto their balance sheets.
Over a third (36%) of FDs said they are less optimistic about the financial prospects of their university than 12 months ago. Meanwhile the proportion who expect operating costs – such as staff, pensions, student support services and maintenance - to increase has risen to 74%, up from 69% in 2013.
However, the majority of respondents expect to spend more this year, with 83% reporting plans to increase capital expenditure in the next year, up from 43% in 2013’s survey.
Julie Mercer, head of education consulting at Deloitte said: ‘The results of our latest survey suggest there is a “prudence paradox” affecting the higher education sector.
'Finance directors are wary of the financial environment and favour strong financial management over risk-taking. But, at the same time, ambition and investing for growth are both needed. As such, risk taking is a necessary strategy for universities.’
