Economies exercise

FAQs for staff

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FAQs last updated 13 May 2010

“Why are these savings needed?”

For Leeds, the cuts so far confirmed mean cumulative reductions in government funding of between £14-18 million a year by 2013. We are pretty confident, unfortunately, that more is in the pipeline of perhaps 6-7 per cent in each of three consecutive years (2011-13).

The Liberal Conservative coalition have made it clear they intend to pursue ‘accelerated’ action to cut the budget deficit and will make £6bn of spending cuts this year.. We need to start making savings from 2010-11, and for us that means we must secure savings of £35 million by the start of 2011-12.

HEFCE’s letter  to the sector in March confirmed our expectations about our funding position for the year August 2010-11 (see http://campus.leeds.ac.uk/newsincludes/newsitem6911.htm).

See a breakdown of predicted government cuts.

Read Campusweb news item re. Budget 2010

“What is the Economies Exercise?”

This is the name being given to the process that the University is undertaking to identify savings of £35 million a year from our total budget (of circa £500m) by 2011-12. The first stage of the exercise is underway and schools and services are being asked to come up with options for how they can save money. These initial ideas from faculties, schools and services were considered by Senate in February. The meeting of Senate in June will further receive update on options and their implications.


“Are the external funding pressures a handy excuse for making redundancies and cutting weakness out of the university to help us achieve a top 50 position?”

Achieving our strategic ambition of a top-50 place is emphatically not part of the rationale for the economies exercise.  We have embarked on the economies exercise only to ensure that the books remain in balance as income falls and costs rise.  By responding to the cuts in an intelligent, planned, timely and collegiate way, we stand the best chance of protecting the quality of what we do.


“Are other universities seeking to make savings?”

Other universities are making economies, some more publicly than others.  Sheffield has lost 320 jobs to reduce its deficit and has announced another round of redundancies, whilst Southampton, Belfast, Warwick, Liverpool, Edinburgh, Cardiff and Imperial have all been taking steps to reduce staff numbers and in some cases, concentrate only on core activities. Warwick is reducing its operating costs by 5% and Birmingham is ‘rebalancing’ it’s spending plans to cope with cuts in Government funding. Bristol and Kings are both planning job cuts this year and next year.

View further updates on University cuts across the sector.

“What is the University doing to stop the Government making these cuts?”

Senior members of the University have been involved in an enormous amount of lobbying – openly and also behind the scenes – not just of members of the current government, but also senior civil servants and opposition parties. 

The Vice-Chancellor (who chairs the Russell Group) and the Russell Group director-general Wendy Piatt co-authored a piece on the impact of the cuts. This was published by the Guardian in January ‘Universities: cuts will bring us to our knees’.  They argued that any further government cuts to higher education on top of the £915m already announced could, potentially, have a devastating effect.

This began a torrent of debate, speculation and comment in government and the media, including questions in the House of Commons, a Select Committee inquiry and two articles by Secretary of State for Business Peter Mandelson in the Guardian.   


“Wouldn’t an increase in tuition fees prevent the need for savings?”

No. The fees review isn’t going to report until after this year’s General Election.  The earliest year for which tuition fees could be increased is therefore 2012/13, so we would not receive any increase in fee in time to offset the reductions in other income.

In any case it’s by no means certain that increased fees will bring in much extra money; they may be offset by a reduction in our core teaching grant as well as the likely need in such circumstances to enhance the student bursary offer.


“Might there be compulsory redundancies?”

The University’s position, clearly and consistently reinforced by the Vice-Chancellor over the last five years, is that compulsory redundancies are a last resort and to be avoided if at all possible.  Although the University has never made any compulsory redundancies, it cannot promise that this will never happen.  No employer could give such a guarantee – in particular during such a period of financial turbulence.

A huge amount of ‘mitigation’ activity is taking place across the campus to avoid the need for redundancies, including the identification of non-staff savings, a virtual ‘freeze’ on recruitment and the University-wide voluntary leavers’ scheme.   The University and campus unions are also discussing a new process for organisational change which is intended to reinforce collegiality and the engagement of staff in any process of organisational change.


“When does the Voluntary Leavers’ Scheme end?”

The VLS closed on 31 March and we have received over 600 applications. Applicants will know the outcome by mid-May.


“How many jobs may need to be lost?”

We will not know precisely how many jobs we need to lose until the government is clear about higher education funding for the coming years, but our current estimate is around 400. This is based on the government cuts already announced, plus the further cuts we fear will occur from 2011. We will explore every avenue to avoid job losses, including not replacing posts and a reduction in non-staff activities. We remain confident that the vast majority, if not all, of any necessary staff reductions will be voluntary.


“What’s the petition to the Visitor about?”

The Visitor is to consider a petition (from Dr John Illingworth) claiming that the University bypassed the body responsible for our academic mission, the Senate, in respect of restructuring in the Faculty of Biological Sciences and the School of Healthcare.  The visitor is Lord Mandelson, but it will be heard by Sir Roy Beldam, a retired judge.

The Petition calls for the economies exercise to be put on hold while the Visitor investigates the complaint; and the letter from the Visitor asks the University to 'take no further steps towards implementing the proposals.' The Privy Council Office have clarified that this means that, until it has been possible to reach a decision on the Petition, the restructuring proposals in Faculty of Biological Sciences should remain on hold.  This is ‘to ensure that the Visitor’s jurisdiction in relation to the petition is not prejudiced by the ongoing activities of the University and the Petitioner’.  It does not imply that the Visitor thinks the University has acted inappropriately:  no judgement has been made about the merits of the Petition.

As regards the Economies Exercise, the Privy Council Office has confirmed that we can continue to discuss, identify and evaluate options for change, provided that we do not implement any such options.

We do not expect the Visitor to reach a judgement before the end of March at the earliest.


“How is the review in the Faculty of Biological Sciences affected by the petition to the Visitor?”

The petition to the Visitor means that the process of implementing the faculty’s new academic plan is now 'on hold’.   This cannot proceed until the Visitor has reached a decision on the Petition and the earliest this might happen is the end of March, but it could be some months away.


“Has the University broken its own regulations by failing to involve Senate in the future of Biological Sciences?”

The academic plan and strategy to secure a sustainable future for Biological Sciences was approved overwhelmingly by Senate on November 25, 2009.  .


“Will there be compulsory redundancies in the Faculty of Biological Sciences”

In the Faculty of Biological Sciences, whose review pre-dates the Economies Exercise, the University will explore all other options for FBS staff at risk, including redeployment and retraining, before any move towards compulsory redundancies.  The University has committed that there will be no compulsory redundancy in FBS before January 2011 at the earliest. The faculty has already reduced staffing by 35 people voluntarily, through a combination of redeployment, early retirement and mobility incentive.


“Is there a freeze on recruitment?”

There is not a complete freeze on recruitment, but there is already a ‘severe chill’, and we expect to make very few appointments over the coming months.  This approach will make a significant contribution to the savings we have to make.  New posts associated with external income through restricted accounts will be filled.


“Will staff on fixed term contracts be treated the same as those on permanent contracts?”

Yes. Staff will be treated according to the terms of their contract.
Economies exercise decisions affecting staff whether they are fixed-term or permanent will be made in the same way and subject to the same scrutiny and process; we do not differentiate between groups of staff in that way.  As we start taking measures to make savings, the ‘equality impact’ process will also help us avoid discriminating unfairly against any group of staff, including those on contracts.

While we have made good progress in providing better job security and career development for contract staff in recent years – leading the sector in many respects – we have to recognise, however, that opportunities to have some contracts renewed will decrease as finances become tight. 

The University’s policy on fixed term contracts is available at:
http://www.hr.leeds.ac.uk/policies/UploadedFiles/Fixedtermcontractpolicy.doc


“What were the talks with UCU about?”

The University and UCU have agreed a new process of organisational change.


“What about staff represented by UNITE and Unison involved?”

The new ways of managing organisational change were discussed and agreed with Unite and UNISON.  The new Employment Security Review Group (ESRG) will be vital in the future in ensuring meaningful consultation with all three trade unions.


“How are we being consulted in the Economies Exercise?”

All schools and services have now had the opportunity to discuss their approach to the economies exercise and put forward their initial proposals. These submissions were reviewed by the Change Steering Group and an update was presented to Senate on 3 February. 

We have asked heads of schools to ensure that students are consulted as the exercise unfolds.

The economies exercise is a challenge and we fully understand that staff have concerns. We want to fully engage all staff over the issues we face, and their resolution. We will listen, share information and be open; and we will do this even where issues are difficult, and indeed, when jobs may be at risk


“How will the savings affect students?”

We want to reassure students that their education at Leeds is safe.  Learning and teaching and research excellence remain at the heart of what we do;  we are wholly committed to protecting them, and the student experience generally. All students will be able to continue the degree on which they embarked.

Professor Vivien Jones, Pro-Vice-Chancellor for Learning and Teaching, when asked what the £35m savings would mean for our current students has said:

“Very little I hope. And that’s why I’m particularly keen to reassure students that any rumours they hear suggesting that the cuts are going to affect them fundamentally are actually quite misleading. We are committed absolutely to the quality of student education so although we’re moving into a very difficult financial climate, our priority is going to be to maintain the quality of education and the quality of care that we give to our students as it always has been, and when we have to make difficult prioritisation decisions because we’re making cuts, students will always be right at the forefront of our minds.


“Will non-staff costs be targeted?”

Yes.  We want to reduce non-staff costs as much as possible in order to be able to protect jobs. Faculties, schools and services have all been working to identify non-staff savings. Head of Procurement Tim Brannon has already identified potential yearly savings of over  £1 million in furniture, stationery and printing.  


“Will all investments be stopped?”

No. We hope to protect a margin for some strategic investment to provide for learning and teaching and research developments. For example, we want to maintain the transformation fund to support new areas of interdisciplinary research.  It is important that we grow research income – and indeed other sources of income.


“Will we make changes to our plans for new buildings and refurbishments?”

Building work already under way will continue. Projects yet to start have been reviewed in light of the new financial circumstances.

Money allocated to us by HEFCE for buildings must be used for that specific purpose or it would have to be returned. We cannot spend funds for capital projects on salaries, nor can we borrow money for ‘recurrent’ expenditure (ie, salaries).


“What’s Senate’s role in all of this?”

The Senate is the academic authority of the University. Its role is set out here http://www.leeds.ac.uk/calendar/senate.htm#membership

Detailed progress reports on the economies exercise will be brought to the Senate, so that it  can review and advise on the academic implications of proposals that emerge.

The Senate on 3 February received an update on the economies exercise options from faculties, schools and services. of the meetings of Senate in June and July  will consider the proposals brought forward by schools and faculties through this year’s planning exercise.


“ When will we have more certainty about our financial position?

The grant letter from HEFCE on 18 March 2010 set our funding for 2010-11, and confirmed that we can expect a share of the cuts announced by the Secretary of State Business, Innovation and Skills on 22 December and  of the £449m funding reductions announced by HEFCE on 2 February (see http://campus.leeds.ac.uk/newsincludes/newsitem6911.htm).  

Any extraordinary summer budget introduced by a new government) will define the funding envelope for the announcement in March 2011, but it may also lead to an in-year further reduction in grants.

We may also receive further clarification through the comprehensive spending review in the autumn.

“What about our strategy - are we abandoning it?”

Absolutely not – quite the reverse. Our strategy and values – and the way in which we worked together to articulate them – have provided us with a sense of purpose, shared objectives and a renewed pride and self-confidence.  They continue to provide the framework for our endeavours and our continuing success.  There is no doubt that we would be in a much worse position today had we not adopted a clear direction four years ago, so it makes no sense at all to renounce our collective focus and commitment in the face of adversity.  See the Vice-Chancellor’s leader column, http://reporter.leeds.ac.uk/544/leader.htm


“I’ve heard that there were some big errors in the 2008 financial plan.  Isn’t that the real reason why we’re having to make cuts?”

No.  It is true that there were some errors in the 2008 financial plan. They meant that our forecasts were over optimistic by about £20 million per annum over the period to 2013.  But the errors are not the reason why we need to make cuts.  Even if the forecasts had been 100 percent accurate (and no forecasts ever are) we would still need to be seeking savings of this order.  In fact, had the forecasting error not occurred, it’s likely that we would have embarked on the economies exercise some months ago.

We have not lost any cash; the errors did not cost us any money; and the University’s actual financial position has not been affected.  What has changed is that we now have a sharper understanding of our likely financial position over the next few years.


“How is it strategic to ask all parts of the University to make similar savings, regardless of how efficient and productive they are?”

All schools derive part of their income from HEFCE grant and all schools therefore need to consider their academic strategies on the basis of a drop in income.

Although all services have been asked to draw up their own proposals for making economies, we shall also be looking at the services more broadly, to explore the potential for delivering services on a more strategic basis.


“Will the number of faculties be reduced?”

There is no central University pressure on faculties to merge – though obviously any particular proposals brought forward at the initiative of the faculties concerned themselves would be discussed openly.



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